If you have received a Notice of Levy from the IRS of an employee's wages or for monies owed to a creditor, you have obligations as well as rights. First, remember that the Notice of Levy is not for taxes that you owe, but rather is for taxes that may be owed by the person levied upon. Under Federal and State Law, a wage execution cannot be cause for terminating an employee.
What Has to be Paid to The IRS?
The employee completes part four of the form indicating their marital status and exemptions. As the employer, you calculate the amount to be withheld from the employee's wages and turned over to the Internal Revenue Service.
Frequently, new and lower paid employees quit employment upon the wage execution because there is little incentive for them to work with a significant portion of money being paid to the Internal Revenue Service. Therefore, you should encourage them to seek advice of a tax attorney to resolve their tax problems.