Wage Garnishment Help

At this point you have probably been the victim of a wage garnishment from the IRS and need help immediately.  In this post we’ll review what a wage garnishment means, how to stop IRS wage garnishment, and other important details you need to know.

What is a Wage Garnishment?

A wage garnishment is a form of seizure (Levy) of your assets by the IRS to resolve an outstanding tax debt you owe.  A levy is something the government is legally allowed to do – they are serious about collecting any and all taxes owed.  Before starting a wage garnishment, it takes the IRS several months to notify a delinquent taxpayer about their past due tax debt.  One of the notifications is a Notice of Federal Tax Lien.

To seize your wages, the IRS will typically send YOUR EMPLOYER a document called the Notice of Intent to Levy.  This gives your employer one full pay period (example: 2 weeks) before they are required to pay a portion of your wages, salary or other income directly to the IRS.  The Internal Revenue Service will continue to garnish your wages until your tax debt, including penalties and interest, are paid in full.

How to Stop IRS Wage Garnishment

It is usually possible to get a wage garnishment released or modified – effectively stopping the government from collecting the levy from your wages.  However, if the IRS agrees to a release or modification, it may not happen instantly and may involve some negotiation with IRS representatives.  Their offices are open from 8am to 8pm Monday through Friday but with the combination of cuts from sequestration and the delays from government bureaucracy you may be on hold for several hours before reaching the right person.

This is probably the time for you to seek a trustworthy tax professional to help you negotiate with the IRS and get your wage garnishment released.  Releasing a garnishment is usually the first step in the process to resolve your tax problems with the IRS.  If you can’t pay your tax debt in full or if you can’t accept the terms of a payment plan, you will still have a tax debt looming over your head – which affects family members, your home, and/or a business you own.  You may need help from an expert who can assist you with tax preparation for back taxes, ongoing IRS negotiations, IRS penalty abatement, Offer In Compromise Formula, and other unique solutions you may qualify for.  There are some big advantages to having an expert, depending on your unique case.

*If you decide to work with a tax professional, make sure you are working with a Federally Authorized Representative throughout the process because they are the only ones who can represent you on your behalf to the IRS.  You can also read up on more articles in our Tax Resolution Services section to learn about how to avoid scams and more.

Negotiating with the IRS on Your Own Is Hard

In dealing with the IRS, remember that every case is handled differently and no two cases are the same.  If you choose to take on the IRS on your own, remember that the IRS has pre-conditions you will have to meet. Questions are likely to include:  Why did you owe the tax? Never underestimate the importance of this question, or your answer.   How much is the tax debt? What type of tax?  Have all other required tax returns been filed, and paid in full? Is there an economic hardship? What are the alternatives to the garnishment for the IRS to collect the tax? There is a real possibly that the IRS is going to demand a fully completed Collection Information Statement revealing total household income and copies of certain current bills, proof of income, and bank statements.

If you negotiate with the IRS on your own behalf, you will be on the phone with the Automated Collection System [ ACS ] staff.  If the negotiation cannot be concluded  to the satisfaction of that person in the ACS or their supervisor, then when you call back, you are most likely going to have to work with a different person.  A good portion of what was previously discussed may have to be fully discussed again.  ACS also has limits on how many sheets of material they will allow you to fax to them.    If ACS wants the documents mailed to them, a significant delay will occur before the issues are resolved.  It is a lot of work!

Other Important Wage Garnishment Details You Need to Know

  1. Because the Internal Revenue Service has many steps to complete before a levy, the IRS is not going to be as friendly AFTER they begin a wage garnishment.
  2. The IRS will send you a Final Notice of Intent to Levy 30 days prior to beginning a levy
  3. The IRS does NOT issue you a Notice of Levy on wages , bank accounts, or accounts receivable to notify you that the garnishment has begun

Protections You’re Entitled to Regarding an IRS Levy

You do have some protections from the government, even if they are seizing your wages.  This does not mean that a wage garnishment is not a serious issue that you should resolve ASAP.  According to the Department of Labor, Title III can protect you from getting fired:

Title III prohibits an employer from discharging an employee because his or her earnings have been subject to garnishment for any one debt, regardless of the number of levies made or proceedings brought to collect it. Title III does not, however, protect an employee from discharge if the employee’s earnings have been subject to garnishment for a second or subsequent debt.

 

This article was partly based on contributions by Geoffrey Bauer, Registered Investment Advisor (RIA) and former tax professional.  He is based in Denver, CO.


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