Wage Garnishment Guides

Tax Resolution Services Handling Tax Wage Garnishment

What to do when the IRS invades your paychecks

If you owe money on your income taxes and fail to pay, the IRS may garnish your wages.  A garnishment is an arrangement with your employer where a certain percentage, up to 25% of your income, is deducted from your paycheck before you receive it and sent directly to the IRS.  In addition to your salary, the garnishment may also be applied to any bonuses, commissions, retirement, or pension earnings you receive.

When does the IRS apply a wage garnish?

Typically, a wage garnishment is the step following a tax lien. Once it’s been determined that money is owed, the IRS sends a notice demanding payment.  If the notice is ignored or payment is refused, the debtor is sent a 30-day notice that a garnishment, also called a tax levy will be instituted.

The majority of employers cooperate with applying a wage garnishment, since employers are held responsible for unpaid garnishes, rather than the wage earner.

What can I do if my wages are garnished?

The good news is that the IRS doesn’t like to use garnishment as a method of collecting back taxes.  It’s an expensive process for them—but it’s also the most effective way to draw attention to the money that’s owed.  After all, most people won’t overlook missing a quarter of their paychecks.

There are several ways you can avoid or end a wage garnishment from the IRS:

  • Pay the amount owed. While this is the most obvious method, most people who have their wages garnished can’t afford to do this (which is often the reason the garnishment came about in the first place). 
  • File for an offer in compromise, which is an agreement with the IRS to pay a fraction of the amount owed, similar to the arrangements some collection companies will offer to credit card debt holders.  This can be done when you receive a 30-day notice of an impending wage garnishment.  However, the IRS is typically reluctant to grant an offer in compromise, and it’s best to work with a tax professional on this.
  • Arrange a payment plan. This is the method the IRS prefers, and if you don’t have a history of defaulting on payment plan agreements, it’s relatively simple to set up.  Once you’ve entered a payment agreement, the IRS will release the wage garnishment.
  • Prove financial hardship.  If a wage garnishment severely impacts your ability to pay necessary bills, you may be able to get a temporary halt on collection through garnishment until your income level rises.

If your wages are being garnished, or you’ve received notice of garnishment, the best move is contact a tax professional to discuss your options and help you make arrangements with the IRS.  Though wage garnishment is a difficult situation, it’s also a temporary one that can be navigated—and corrected—with the right guidance.

For assistance with any tax problems, including a wage garnishment, call 888-411-LEVY (5389) and speak to someone from our A+ BBB Rated Staff.  You can also fill out the form to the right and someone from our staff will contact you shortly.

Remember, “You want a LEVY on your side, not one against you.”

Contact Levy & Associates for Dependable Tax Audit Services

Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.

There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.