The IRS has legal access to several types of levies.

Firstly, the IRS conducts a full and thorough assessment of the taxpayer’s assets. Afterwards, the revenue agent determines which levy is the easiest collection process. This varies according to each taxpayer’s individual resources. Wage garnishments and bank levies are chiefly among the most common methods of tax levy.

A wage garnishment is also known as a wage levy. Accordingly, the IRS uses this method to obtain regular payments from the taxpayer’s paychecks. They contact his or her employer with a notice directing them to withhold a specific amount from their employee’s paycheck. Then, the IRS applies the withheld wages to the employee's past tax debt.

Wage garnishments continue until the debt is paid in full, regardless of employment changes. Should the taxpayer start a new job while the garnishment is in effect, the IRS sends a notice to the new employer. A wage garnishment can be stopped or reduced in some cases if the taxpayer makes other suitable payment arrangements.

How a Wage Garnishment Works When You Have More than One Job

The IRS has some limitations when garnishing wages. For example, they won't take your whole paycheck and leave you with nothing for basic living expenses. In fact, the employer will give you a form to fill out. It asks for some information pertaining to your filing for the current year, such as your filing status and number of dependents.

You must fill this form out and return it to your employer within three days. Generally, the IRS will only have your employer withhold an amount in excess of what you need for your basic living expenses. While that may include food and rent, it doesn't include your gym membership or Netflix subscription. In other words, what the IRS is likely to leave you with will only cover minimal expenses.

Furthermore, all sources of income are combined for these garnishment limitations. For instance, if you work two jobs to cover your monthly expenses, then both paychecks may be garnished. It's also possible that the IRS will only garnish one paycheck and not the other.

To obtain back tax payments via bank levy, the IRS sends a notice to the bank directing it to freeze funds in your account. The freeze remains on the taxpayer’s bank account for 21 days. Consequently, this gives the taxpayer an opportunity to address the levy before the IRS applies the funds to his or her back tax balance. If the bank account balance isn’t enough to pay the debt in full, then the levy will remain in effect until it's eliminated.

Note: A bank levy may be lifted in extraordinary circumstances. For more information, contact a reputable tax relief professional.