TaxProfessionals.com
Posted by James Financial Services Inc

Avoid IRS Garnishment of Your Wages

Avoid IRS Garnishment of Your Wages

A payroll garnishment is one of the many ways the IRS can collect on your tax debt. Although levies and liens are also used, IRS wage garnishment is more common. So if you owe the IRS, it's important to know how wage garnishment works and what you can do to prevent it.


What is wage garnishment?

Under federal law, the IRS can seize your earnings to collect any federal tax debt you owe. This includes salary, wages, commissions, and bonuses.

The IRS can garnish your wages without suing you. And it may require a higher portion of your salary than a private lender. Generally, the IRS usually garnishes 70% or more of your income. They only leave about $375 for each of your salaries so that you can support yourself at home. But if you are self-employed, they can garnish all your income.


What is the Wage Garnishment Process?

Before the IRS can garnish your wages, the IRS must go through a legal process.

Written Notice

First, the IRS must send you an extended written notice before any collection action.

The notification will tell you the amount due. This includes penalties and interest in addition to the main tax payable. It will also give you a due date to pay your balance. This gives you the option to stop the IRS from garnishing your wages.

Second Notice

The IRS will issue a second notice if you do not pay the balance in full by the due date. This "Final Notice of Intent to Levy" must be sent by registered or certified mail 30 days before forfeiture.

6 Ways to Avoid IRS Wage Garnishment

If you received the first or last notice from the IRS, you have the option to prevent the IRS from garnishing your income. Here are six ways to solve your tax problems:

  • Appeal: By law, you have the right to appeal your IRS wage garnishment if you dispute what you owe. You must file an appeal within 30 days of receiving the "Final Notice of Intent to Levy."

  • Bankruptcy: Your tax debt can be paid in the event of bankruptcy. However, bankruptcy should be the last resort. It is difficult to know how much of your tax debt is available. The unavailable tax debt must be paid even after bankruptcy. The most you can expect is for the IRS wage to stop during bankruptcy. However, bankruptcy will damage your credit for a long time, preventing you from buying a car, house, or business.

  • Change of employment: The easiest thing to do is to change employers. However, this is a temporary fix, as the IRS will inevitably find you and your new employer. Once they find you, they will reissue the wage garnishment.

  • Financial difficulties exemption: The IRS can cancel your debt if you prove that paying it off will cause you serious financial hardship. But you must prove that wage garnishment or repayment will prevent you from meeting your basic family needs.

  • Installment Plan: The IRS will allow you to pay your balance over time if you create an installment plan with them. You will need to contact the IRS and prove that you cannot pay all your debts at once. Under the installment plan, you will be required to make monthly payments until your debt is fully paid off. If they accept the plan, the IRS will not stop their attempt to garnish your wages.

  • Offer in Compromise: If you cannot pay your debt due to financial hardship, the IRS may offer. This way, they will reduce the amount due. Eligibility for this selective program requires an application. But the good news is that the IRS garnishment will stop while your application is reviewed.


Final Word

The final notice will include a letter advising you of your right to appeal. You have the right to request an appeal within 30 days between final notification and the garnishment of your IRS wages. If you don't take action before the 30-day period ends, the IRS may begin to garnish your wages.

The IRS will ask the employer to send them a certain amount of salary directly. Your employer must start paying within a period after receiving the notification and continue until your debt is paid.


FOR MORE INFORMATION ON HOW JAMES FINANCIAL SERVICES, INC. CAN BEST HELP YOU WITH YOUR TAX FILING NEEDS, PLEASE CLICK THE BLUE TAB ON THIS PAGE.


THANKS FOR VISITING.

James Financial Services Inc
Contact Member