Page 247 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
change occurred after receipt of the tax levy notice. However, if the
company becomes unionized subsequent to the tax levy date, and Molly
is required to pay union dues as a condition of her employment, then
the tax levy will be reduced by the amount of her dues. Finally, if her

medical insurance deduction increases, the tax levy will also be reduced
by this amount.
Once a Form 668-W is received, the company is obligated to begin
withholding the mandated amount of taxes from an employee’s next
paycheck, even if the applicable wages were earned prior to receipt of
the form. The company should forward the withheld amount to the
IRS, with the employee’s name and Social Security number noted on

the check.
If the employee leaves the company while this tax levy is still being
deducted, the employer must notify the IRS of this event, and if possible
forward the name and address of the new employer to the IRS. If the
employee continues to work for the company, the IRS will inform the
company when to stop making these deductions on a Form 668-D.
If an employer for any reason does not withhold and forward to the
IRS the periodic garnishments required by Form 668-W, the company
will be held liable for the amounts that it should have withheld,in addi-

tion to incurring a stiff penalty.

Loan Repayments
Employees may either have loans payable to the company, or the com-
pany may have obtained loans on their behalf. For example, a corporate
officer may have been extended a loan in order to move to a different

company location and purchase a larger house. Alternatively, a company
may have a computer purchasing arrangement with a local bank,where-
by employees buy computers for their personal use and the company both
guarantees payment to the bank and collects periodic payments from

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