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Tax levies: Large print giveth, small print taketh away

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in Office Management,Payroll Management

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.

Liability lessons

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)

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{ 1 comment… read it below or add one }

Jeffery Sanders February 5, 2013 at 9:14 pm

This is true, IRS levies can be confusing and very stressful. However, it might be possible to release the IRS levy depending on the circumstances. The IRS levy on wages will be automatically released if a taxpayer enters into an Installment Agreement. The important thing here is not to agree to make higher payments that you can afford. Review your financial situation carefully or consult a tax dept specialist to prepare a payment plan proposal on your behalf. Sometimes tax levy can be released even if there is repayment agreement in place. For more information how to deal with the IRS levy, visit us at


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