Wage Garnishment From the IRS: What You Need to Know

Having your wages garnished can make you feel awful and defeated. Wage garnishment occurs when a creditor goes to court to have a portion of your wages automatically sent to them to repay a debt you owe. Wage garnishment does not typically happen until other collection efforts have been exhausted. If you owe the IRS, the agency does not have to involve the court at all but rather can have your wages garnished much more easily using its own process. Here are some things you need to know about wage garnishment by the IRS and ways to protect yourself:

How Much of Your Wages Can Be Garnished?

The IRS does not have a limit when it comes to how much of your money can be garnished from your wages. However, the agency does have a required amount of cash they must let you keep in order to provide for your regular expenses. According to federal tax laws, the IRS has a specific formula they must use to determine how much money they may take from your paycheck each pay period.

Can You Prevent Wage Garnishment From the IRS?

Yes, there are some things you can do to prevent or stop a wage garnishment from the IRS. The first thing you can do is to call the IRS and request an installment payment plan. You can make payments each month to the IRS to repay what you owe. You may also be able to offer a settlement in an amount slightly less than what is owed. If you go this route, you must do so in writing to prove the transaction is valid.

If you have the cash, you can simply pay the debt back in full, which is the simplest option. However, if you have a financial hardship, the debt may be declared uncollectable. This will release the garnishment order.

If you are considering bankruptcy as an option to rid yourself of the wage garnishment order, keep in mind that tax debt cannot be discharged. If the garnishment is your only reason for the bankruptcy, you may want to reconsider. Be sure to discuss this with your attorney before moving forward.

Should You Hire an Attorney?

If you receive a notice of wage garnishment from the IRS, you should contact an attorney to help you. He or she will discuss with you the different options you may have to deal with the garnishment. Your attorney can also help you broker deals with the IRS, such as a settlement or an installment plan. You may even learn some additional methods to get the wage garnishment released based on your particular financial circumstances.

Contact a wage garnishment law firm, such as Havner Law Firm, for a consultation.