While most Minnesotans would greet the prospect of being in the crosshairs of the Internal Revenue Service with little enthusiasm owing to the agency's extensive resources and willingness to deploy draconian collection measures, they may not harbor such trepidation when it comes to the Department of Revenue.
This, of course, is a mistake, as the Department of Revenue is similarly equipped with its own staff of determined professionals who are more than willing to deploy equally effective collection measures.
By way of example, consider the levy, which is an administrative tool used by the Department to collect tax debt and can be deployed in a variety of forms, including what is known as a wage levy.
What is a wage levy?
As implied by the name, a wage levy enables the Department to take a portion of a person's disposable wages, meaning the amount left over after taxes and other withholding, to cover a tax debt that is past due.
How much of a person's disposable wages can the Department take?
By law, the Department is authorized to take as much as 25 percent of disposable wages.
How does a wage levy actually work?
At least 30 days before issuing a wage levy, the Department will send a person a notice of debt requesting payment of the tax debt in full at their last known address.
If the necessary arrangements aren't made, a wage levy notice will be sent to an employer informing them that they must withhold a requested amount of the person's wages and remit payment to the Department.
Will entering into a payment agreement stop a wage levy?
No. Once the wage levy is issued by the Department, it cannot be undone by entering into a payment agreement.
We'll continue this discussion in a future post, exploring the circumstances in which a wage levy can be reduced or released.
If you have questions or concerns relating to back taxes or a tax debt, consider speaking with a skilled legal professional who can provide answers and pursue solutions.