Unpaid taxes can lead to serious consequences, including wage garnishment. Our Baltimore County, MD tax lawyer knows that the IRS has the authority to take a portion of a taxpayer’s paycheck to recover unpaid tax debt. There are many misconceptions, so it is crucial you speak with someone who understands when and how the IRS can garnish your wages. This process, known as a wage levy, can create financial strain and make it difficult to cover basic expenses. Knowing when and how the IRS can garnish wages can help taxpayers take action before their income is affected. We have 40+ years of legal experience, so don’t hesitate to call us now.
How The IRS Initiates Wage Garnishment
The IRS does not immediately garnish wages when a taxpayer falls behind on taxes. Before taking action, they send multiple notices demanding payment. The process generally includes:
- A Notice and Demand for Payment. This is the first step, informing the taxpayer of the amount owed.
- A Final Notice of Intent to Levy. If the tax debt remains unpaid, the IRS sends this notice at least 30 days before garnishment begins. It may also include a right to a hearing.
- A Wage Levy. If no action is taken, the IRS notifies the taxpayer’s employer to withhold a portion of their wages and send it directly to the government.
How Much Can The IRS Take From A Paycheck?
Unlike other types of wage garnishment, the IRS does not follow standard state limits on how much income can be withheld. Instead, the IRS determines the exempt amount based on the taxpayer’s filing status and the number of dependents they claim. The remainder of the paycheck can be garnished until the debt is paid or other arrangements are made.
Ways To Stop Or Avoid Wage Garnishment
There are several options to prevent or stop the IRS from garnishing wages:
- Paying the Balance. If possible, paying the full amount owed will immediately stop further collection efforts.
- Setting Up an Installment Agreement. The IRS may allow taxpayers to make monthly payments, preventing further enforcement actions.
- Submitting an Offer in Compromise. In some cases, the IRS may accept a reduced amount to settle the debt.
- Requesting Currently Not Collectible Status. If a taxpayer can show financial hardship, the IRS may temporarily suspend collection efforts.
- Filing an Appeal. If the taxpayer disagrees with the levy, they have the right to challenge it before the IRS proceeds with garnishment.
What To Do If The IRS Has Already Started Garnishing Wages
Once the IRS begins garnishing wages, it can be difficult to reverse without taking action. Contacting the IRS directly to discuss repayment options is often the best first step. If the tax debt is incorrect or if the garnishment creates significant hardship, legal options may be available to reduce or stop the levy.
Finding The Right Help
Tax disputes and other issues can be difficult to work with on your own. Ignoring tax debt can lead to serious financial consequences, but there are ways to protect income and work toward a resolution. At Crepeau Mourges, we help clients explore their options and take steps to prevent or stop wage garnishment. We offer 24/7 live call answering, so reach out when you are ready or contact us today to discuss how we can help.
