Overview of the IRS Wage Garnishment Process
The Internal Revenue Service (IRS) possesses the legal authority to “garnish” (i.e. legally seize) your income to satisfy any outstanding federal tax debt. The IRS can garnish hourly wages, salary, commissions, and even bonuses.
The IRS generally does not garnish wages unilaterally. The federal agency will first send you a written notice that sets out the amounts that you owe, including the tax, penalties, and interest. This notice should also provide you with a due date by which you must pay the balances in full. Assuming that you do not pay the balance in full, you later will receive another notice, entitled “Final Notice of Intent to Levy,” Once thirty days have passed from the time you have received the final notice, and you still have failed to pay the balance due, the IRS can proceed with garnishing your income.
The IRS will then contact your employer directly and direct them to send a portion of your income to the IRS. Your employer is legally obligated to comply with the IRS.
How Much Can the IRS Take From Your Wages?
Many people are surprised to discover the extent to which the IRS can garnish your wages. The IRS has the authority to take 70 percent or more of your income, depending on the amount of taxes owed. Yes, you read that correctly – the IRS can take 70 percent of your wages in the blink of an eye.
The federal tax code contains a table with a corresponding number of exemptions you can seek to claim for tax purposes. This table also provides the amount that is generally needed for an individual and their family to pay for basic level expenses.
How to Stop an IRS Wage Garnishment
There are different actions you can take to avoid or stop an IRS wage garnishment. The key is to get back into good standing with the IRS. This typically requires either paying your balance in full or entering into a tax payment plan.
If you enter into an approved installment agreement to pay your tax debt in full over a series of monthly payment installments, this will cease any attempted wage garnishment by the IRS. With the help of an experienced and knowledgeable tax attorney, they can negotiate on your behalf to set up a monthly payment plan that is reasonable and affordable.
Another option that your tax attorney may discuss with you is making an “offer in compromise” to the IRS. This entails settling your tax debt with the IRS for less than the total amount that you actually owe. Though, it is important to note that this type of program is not available to everyone and depends largely on your income level. It is in your best interest to consult and discuss your viable options with an experienced tax consultant that can help clarify all pertinent information.
Have Questions? Speak to an Experienced IRS Wage Garnishment Lawyer Today
The tax attorneys and consultants at Anderson Bradshaw Tax understand how stressful and overwhelming it can be to receive a tax debt notice from the IRS and confronting the prospect of having your wages garnished. Our team of legal professionals are accustomed to negotiating with the IRS and can work to set up payment plans that both satisfy the IRS, and keep you from financial ruin. Contact our office today to schedule a free 30-minute case review or call 877.550.3911 to speak to someone now.