Tax Problems
IRS Wage Garnishment
Wage garnishment is a collection action used by the IRS to satisfy an outstanding tax debt balance and can leave a person with little money to live on. If you already live paycheck to paycheck, an IRS wage garnishment could be devastating — but there are options available to stop it.
Key Insights
What Is an IRS Wage Garnishment?
When you owe severely delinquent back taxes and do not resolve your debt with the IRS, the agency may collect from you through your wages. Also known as an IRS wage levy, a wage garnishment forces your employer to withhold a specific amount of your paycheck that the IRS takes to address your tax debt. This portion of your wages will be withheld each pay period until the tax balance is paid in full or a resolution is made.
How Much Can the IRS Garnish?
The IRS can garnish a significant portion of your wages. Following the IRS exemption table, the garnishment amount is determined based on your disposable income, pay period, filing status (Single, Married Filing Jointly, Head of Household, etc.), and the number of dependents claimed on your tax return. The remaining portion of your paycheck is applied toward your outstanding tax balance. In some cases, the garnishment can create severe financial hardship, making it challenging to afford essential living expenses.
How to Stop an IRS Wage Garnishment
Pay Your Tax Debt in Full
The fastest way to remove a tax garnishment is to pay the full amount owed. Once your tax bill is addressed, the IRS will remove the garnishment immediately.
Enter an Installment Agreement With the IRS
A structured repayment plan with the IRS allows you to make manageable monthly payments toward your tax debt instead of paying it all at once. In many cases, setting up an installment agreement can lead to the release or reduction of the wage garnishment.
Submit an Offer in Compromise (OIC)
An Offer in Compromise is a settlement in which the IRS accepts a lower amount than what is owed based on the taxpayer's inability to pay the full balance. It can significantly reduce tax liability, but is challenging to qualify for and requires documented proof of financial hardship. Consulting with a tax professional to understand the qualification requirements is highly recommended.
Demonstrate Economic Hardship
If the garnishment creates an economic hardship that prevents you from meeting basic living expenses, you may be able to request a levy release. The IRS will evaluate your income and necessary expenses to determine if the hardship qualifies.
Frequently Asked Questions
Stop Your IRS Wage Garnishment Today
Allowing a wage levy to continue will harm your overall financial stability. Call us or schedule a free consultation to explore your options.
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