The aftermath of the Great Recession may very well be read in an increase in the number of tax levies on wages, as employees scrimped on their taxes to pay for other things. The IRS isn’t sympathetic, and that’s bad news for you. Tax levies, with their different withholding and remittance rules and paperwork requirements are an inconvenience for already overworked Payroll departments.
Employees who have shorted the IRS may not be too happy about having to pony up on the back end through tax levies. A couple of recent cases reaffirm that you aren’t liable for withholding under a tax levy.
A federal appellate court ruled that an employer wasn’t liable to an employee for honoring a tax levy. Among the employee’s more colorful allegations against his employer were that it breached its fiduciary duty, committed fraud and negligence, intentionally inflicted emotional distress and tortuously interfered with cont...(register to read more)