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How to prepare Form 668-W(c)(DO)

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About Form 668-W(c)(DO)

IRS Wage Levy Notice What about the IRS levy on your bank account? This can happen if the IRS is auditing your account for delinquent taxes. If the IRS garnishes your bank account for unpaid taxes or delinquent accounts such as credit cards or student loans, you must give it to the IRS as outlined in Chapter 7 of Publication 15, U.S. Code, Part 60, Subpart A, Bankruptcy and Estate Administration. The IRS also may ask to inspect your bank account to verify your identity and the information is stored on their system. The IRS wants to know where you keep your money and how your finances are structured. Be sure to let the IRS do that before accepting the offer. What if a state has a sales tax? The IRS may levy on goods or services when filing return or when an employee is liable for sales tax. You should check with your state to see if they levy, if the IRS will levy, and if employees are exempt or not. For more information on this practice go to the IRS website. Are state and local government employees exempt from the Federal Income Tax? No. According to 14 CFR § 301.77, “There are special rules for self-employment income of state, county, municipal employer(s), and local government employer(s).” The IRS tax code specifically exempts employees of governments for whom there is a bona fide personal relationship, even if the employee works for two or more governmental agencies. See Rev. Pro. 2008-38 (IRB No. 96-27). Are contractors exempt from Federal Tax? Yes. It is fair to classify any business not having a regular business relationship as a contractor. In general, the contractor is a person who, in addition to performing actual work under contract, undertakes substantial personal activities in a trade or undertaking for which the person receives remuneration from public funds. The contractor is not an independent contractor because the person, rather than the business, should have paid personal income taxes. In addition, a taxpayer can be a contractor for federal income tax purposes if the contractor does business in the United States solely with the same taxpayer for one year or more. For details on contractors get the Federal Tax Guide at the IRS website. What if you had a partner in a business that you carried on as a self-employed person? In that case you would have to pay FICA tax and would be considered a self-employed person.

What Is Form 668-W(c)(DO)?

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