Wage Garnishment

A wage garnishment is legal procedure by which the IRS seizes a taxpayer’s income directly from the taxpayer’s employer. Wage garnishments occur only against W-2 wage earners and are continuous in effect. Therefore the IRS does not have to re-issue a wage levy in order garnish every paycheck of an employee. wage garnishment usually takes up to 85% of an employee’s paycheck. Self employed people (who earn 1099s) can also be levied, however the IRS is required to re-issue a levy notice prior to every single payment of income for self employed people.

How can an IRS wage garnishment be STOPPED?

IRS wage garnishments can literally lead to life and death situations for taxpayers. The IRS can seize so much money out of a taxpayer’s paycheck that a taxpayer may not be able to pay for housing, food, transportation and medication. As such, stopping an IRS wage garnishment is almost always a top priority. In stopping a wage garnishment, there short term fixes and there are long term fixes. In the short term, a taxpayer can have a wage levy stopped by promising to pay the IRS in full with borrowed funds from family, friends or other legitimate sources. Another short term fix can occur when a taxpayer is placed on an installment arrangement with the IRS. The long term solutions for resolving a wage levy include completing missing tax returns, submitting an offer in compromise, enforcing statutes of limitations on the IRS, and filing for bankruptcy. Different types of tax problems will require different types of solutions in resolving a wage garnishment.

How does the IRS wage garnishment process work?

The IRS will not surprise a taxpayer with a wage garnishment. Initially, a taxpayer will receive a notice of past due taxes along with a request for immediate payment. If this notice is ignored and unaswered, a taxpayer will eventually receive a “Final Notice of Intent to Levy”. Usually, after 30 days of the final notice the IRS will issue Form 688-W to a taxpayer’s employer and the garnishment of wages begins. Taxpayers are afforded some exemptions for dependents on Form 668-W, but the allowance is so small that effect of the wage garnishment is still devastating on a taxpayer’s personal financial situation.

What If I Want to Appeal an IRS wage levy or wage garnishment?

A “Final Notice of Intent to Levy” can be appealed within 30 days. Good cause for the appeal is required and some examples are set forth below:

  1. You paid your taxes in full and they made a mistake;
  2. You are in bankruptcy and an injunction or automatic stay was issued;
  3. The statute of limitations on collecting the taxes applies;
  4. You submitted an Offer In Compromise and have not received an approval or denial decision yet;
  5. You are already in an IRS Installment Agreement upon which you have not defaulted;
  6. You have filed all of your tax returns and have unreasonably been denied an installment arrangement.

What Should You Do If You Are Facing or Experiencing an IRS Wage Garnishment?

Upon receiving a notice asking you to pay your back taxes, or a note of “intent to levy”, you should immediately begin to consider all your options and contact the IRS. If you are unsure of how to pay the IRS get in touch with a tax lawyer. It is better to have an experienced person on your side than it is to ignore the requests and wait for the worst to come. Even if you are currently experiencing an IRS wage levy now, contact a tax attorney so they can resolve your situation quickly and efficiently.

Introduction

Every individual in the United States is expected to pay their taxes so that government can provide various public services and benefits. If one neglects to pay their taxes, serious consequences ensue. In spite of this generally well-known idea, several individuals still refuse to pay their taxes each year. After several warnings to these individuals, the government will take action to recover unpaid taxes. One thing that the government will do is issue a wage garnishment. A wage garnishment is a serious matter and must be taken care of quickly in order to avoid further penalties.

Basically, a wage garnishment allows the government to take money from an individual’s paycheck. This means that money will automatically be taken away from future paychecks if an individual has a wage garnishment. A wage garnishment does not go away unless the individual takes action to address unpaid taxes. It will continue to deduct money from every paycheck until either the balance is paid off or the individual makes other arrangements. Therefore, a wage garnishment can be incredibly burdensome to those who are behind in paying taxes.

A wage garnishment has several negative consequences, so it is best to get rid of it as soon as possible. Removing a wage garnishment, however, is not always easy. In fact, it can be quite difficult to convince the government to remove a wage garnishment. This article will review the basic ways to get rid of a wage garnishment. However, some situations require solutions that are much more complex in order to get rid of a wage garnishment.

In more complex situations, it is best to contact a qualified tax attorney to fit the specific needs of an individual. A wage garnishment can happen to a variety of different people in many kinds of situations. The solutions listed below can only go so far. If an individual chooses to consult with a lawyer, they can definitely make significant progress towards removing a wage garnishment. Without a tax lawyer, it is much more difficult to remove a wage garnishment. It is still possible, but the process is not as quick or easy.

In order to explain the extent of the negative effects a wage garnishment can have on an individual, it is helpful to compare a wage garnishment to a leech. A wage garnishment is not very different from a leech. It attaches to paychecks and feeds on it in order to satisfy its needs. Fortunately, just like a leech, a wage garnishment can be removed from one’s life using several different methods. This must be done quickly and efficiently in order to prevent further damage. If left alone for too long, a wage garnishment can negatively impact an individual’s overall financial status. This must be dealt with rapidly.

The Basics

Process Behind a Wage Garnishment

In order to have a wage garnishment, one must consistently ignore their taxes for an extended period of time. A wage garnishment does not pop up just because an individual did not pay their taxes for a month. A wage garnishment only comes after several warnings from the IRS have been issued. These warnings generally come in the mail, and they give all details regarding back taxes that are owed. If the IRS feels that an individual has willingly neglected their taxes as well as their warnings, they will issue warnings that are generally worded in a much harsher tone. Eventually, the government will begin to take action on personal property that is owned by the taxpayer. This is to recover the payment that was expected from the taxpayer.

An individual will be assessed several penalties and fines prior to receiving a wage garnishment. By the time a wage garnishment is issued, it is not only the original tax amount that is being collected. On top of the back tax, a wage garnishment accounts for penalties and interest assessed on the original amount. Fines and penalties quickly rack up and contribute to the total amount owed to the government. This amount is much greater than what it would have been if the individual had paid taxes on time.

After penalties, the government will notify an individual of a tax lien. A tax lien claims property but does not take action on collecting it. It simply notifies the individual of what the government is about to do. A tax lien may list part of an individual’s paycheck as collateral for paying back taxes. This notification precedes a wage garnishment. A tax levy comes after a tax lien. A tax levy allows the government to take action on what is claimed by a tax lien. If wages were previously listed as part of the things that the government can collect, then the wage garnishment will be in effect as soon as the tax levy has been issued. This means that a portion of the taxpayer’s next paycheck now belongs to the government.

Function of Wage Garnishment

A wage garnishment is a kind of tax levy in respect to its function. It forces an individual to give up part of their paycheck in order to pay the government for back taxes. An individual will receive several warnings before the IRS can take action on a wage garnishment. Once a wage garnishment has been placed, it is relatively permanent. The IRS will continue to collect money from a paycheck until back taxes have been paid. Fortunately for taxpayers, options are available to make the government remove a wage garnishment. These options will be discussed later in the article.

A wage garnishment essentially forces an individual to do what they should have been doing all along: use part of the paycheck to pay for taxes. Therefore, in order to prevent a wage garnishment, it is reasonable to use wages to quickly pay for taxes that are owed. Even if an individual is in a tight spot financially, they should opt to pay on their own out of their own free will before the government forces them to with the wage garnishment. It is better to choose a certain method that allows for more freedom than it is to be forced to comply with certain standards.

Getting Rid of the Wage Garnishment

To get rid of a wage garnishment, there are several things that can be done. First of all, if there is anything of value that is not already listed in a lien or levy, an individual can pay the government for the remaining balance. Perhaps this means taking money from a savings account in order to get rid of a wage garnishment. Perhaps there is valuable personal property that the government has not attempted to claim yet.

The government may settle for an installment plan in the place of a wage garnishment if it is for a reasonable amount. An installment plan allows the individual to choose payment dates and amounts. This is usually one of the more reasonable solutions to the problem of having a wage garnishment. Installment plans must account for everything preceding the wage garnishment. All taxes, penalties, and interests must be paid.

If an individual thinks that they should not be given a wage garnishment due to a personal hardship or emergency, they can always submit an offer in compromise. In some cases, an offer in compromise can “forgive” a small portion of back taxes.  The IRS may consider the hardship and remove the wage garnishment. The hardship must be substantial enough for the IRS to agree that a certain portion of the taxes is inappropriate. If an offer in compromise is favorable, the IRS may remove the wage garnishment and reduce the amount of taxes owed. This removal of the wage garnishment will only be done of the IRS is convinced that the individual is dedicated to paying whatever amount of back taxes is eventually expected of them.

The Specifics

Now that the article has reviewed the basic elements of a wage garnishment, it will now go over several specific aspects of it. These elements are critical to a more complete understanding of a wage garnishment. If one wishes to be educated in a manner that goes beyond the article, they must consult with a qualified tax attorney. A properly educated tax attorney with enough experience knows everything there is to know about a wage garnishment. The questions answered below can only go so far. Professional legal advice can go a very long way in getting rid of a wage garnishment.

Portions and Term

A wage garnishment performed on a taxpayer who is paid under the regulations of a W-2 can be held as long as the government deems fit. This means that the government does not have to renew a wage garnishment done for a W-2. This kind of wage garnishment will consistently withhold a certain part of an individual’s paycheck. The most that the government can take away using a wage garnishment is usually 85 percent of the individual’s paycheck.

If an individual is self-employed, or if they fall under the regulations of a 1099, they may still have a wage garnishment. However, in these circumstances, a wage garnishment must be renewed. Every time the government determines that a wage garnishment must be continued, it must once again go through the process that brought about the wage garnishment to begin with. Do not misunderstand this process: the government will still continue the wage garnishment if such action is deemed necessary. Only the process is slightly different.

If a wage garnishment removes 85 percent of income, an individual is left with only 15 percent. This is not very much to live off of, but it is the result of repeatedly ignoring taxes. If an individual believes that the government is unfairly taxing them, there are several options for appealing the wage garnishment. This will be discussed later in the article. Such cases must receive the utmost attention. If an individual has such a severe wage garnishment for too long, they may find themselves unable to pay for food and shelter. This is a serious problem that must be avoided at all costs.

Speculation

Some individuals may be speculating how close they are to receiving a wage garnishment. If one has not received many notices in the mail, they are probably far from a wage garnishment. However, if there are taxes to be paid, such individuals should still take care of them.

If an individual has already gotten a few “past due” notices, this means they are stepping closer and closer to a wage garnishment. Some of these notices may actually state the time frame of the individual in relation to tax levies and tax liens. This is definitely helpful for those who are nervous about receiving a wage garnishment.

Before any wage garnishment is issued, an individual will receive one final notice that alerts them to their tax burden. This is called a “Final Notice of Intent to Levy”. It may include a wage garnishment. This is especially true if previous tax liens have mentioned wages as a potential method of collection.

Some individuals do not have to worry about a wage garnishment. If a taxpayer receives a tax lien (or tax levy), this does not automatically mean that they will also get a wage garnishment. The government often pursues valuable personal property first, as this provides funds much quicker. Usually, a wage garnishment is issued only after the government has considered all other personal items. A wage garnishment typically means that the individual has nothing left to offer.

Stopping a Wage Garnishment

A wage garnishment can, indeed, be stopped if the individual involved pays close attention to what needs to be done to satisfy the government. There are short-term plans and long-term plans to stopping a wage garnishment. Obviously, an individual should make progress on a short-term plan if at all possible. In this article, a “short-term plan” refers to quickly finding a solution to remove a wage garnishment. These plans are most beneficial initially because they immediately satisfy the IRS. However, such plans can backfire if the individual ends up having no money further down the road. If an individual can stay consistent with the plan, however, then the wage garnishment can be removed quickly.

A long-term plan deals with taking a step back and considering every option. This generally takes a lot more work, but it can give an individual more understanding of what must be done. A long-term plan involves more research but it opens up options for taking care of a wage garnishment. In some cases, due to actions taken by the long-term plans discussed below, an individual may actually be “forgiven” for a portion of their taxes. Once again, it is imperative that a tax lawyer is contacted in order to receive the best advice about what to do with a wage garnishment.

Short Term Plans

An individual can stop a wage garnishment by reaching an agreement with the IRS regarding payment. Some individuals resort to borrowing money. This solution is very restricted, however. Due to the tax levy (and resulting wage garnishment), a taxpayer’s credit at this point is very low. They will probably not be able to borrow money from a bank or other financial institution.

Family and friends who are willing to lend money may prove to be incredible help when it comes to getting rid of a wage garnishment. If an individual knows anyone who can “spot” them the money, then they will make progress toward removing the wage garnishment. In order to do so, however, they must find an individual willing to take a risk by lending them money.

Another short-term solution to a wage garnishment is to go to the IRS and set up an installment plan. This is essentially the same as a wage garnishment, but it gives much more control to the taxpayer. The taxpayer can make the arrangements for how much will be taken out of their paycheck (or other payment method). This is a great alternative to a wage garnishment, which forces the taxpayer to pay a specific amount. There is no freedom to be found in dealing with a wage garnishment.

Long Term Plans

There are several types of long term plans to help solve the problem of wage garnishment. The taxpayer must be ready to do adequate research to retrieve information that will be most helpful to them. Long-term plans are very helpful to individuals who believe they can make an appeal that they were taxed too much. This can greatly increase the chances of convincing the IRS to remove the wage garnishment.

One thing that could have led to the wage garnishment is the fact that the taxpayer did not file all of their tax returns. This should be the first step to resolving an issue with a wage garnishment. A taxpayer must go back and make sure that all tax returns have been completed for the years that are in question (the years that the back taxes come from). Only then can the individual proceed to tackle a wage garnishment: with complete knowledge of their history.

If there are tax returns that have not been filed, several problems ensue. First, there are usually fines and penalties that come from an unfiled tax return. More important, however, is the fact that tax returns give the government more information regarding the financial status of an individual. For example, if there are deductions that need to be applied, the government has no way of truly knowing so unless a return has been filed. A wage garnishment may only exist due to the negligence of tax returns. This must be the first step to getting rid of a wage garnishment, as it may reveal some important information that might reduce the amount the individual must pay.

Another option to get rid of a wage garnishment is to turn in an offer in compromise. A detailed description of an offer in compromise can be found on this site under the tab labeled “tax services” at the top of the page. Basically, an offer in compromise makes an appeal to reduce the amount of back taxes owed. This may mean that the government will remove the wage garnishment. However, there are several qualifications that one must have in order to submit an offer in compromise. It is not for everyone.

An offer in compromise is one of many ways to get rid of a wage garnishment. One must consult a tax lawyer to get a clear picture of what option is best for them. There are several other long-term options other than the ones listed above. Many of them are very complex and require direct consultation with a qualified individual. For example, one may also consider declaring bankruptcy in order to increase the chances of having the wage garnishment removed. This must be done in such a manner that provides the most benefit to the taxpayer. If it is not a good option, there are several other choices that can be made to get rid of a wage garnishment. Once again, a tax lawyer can provide incredible service to benefit those who have a tax levy or a wage garnishment.

Appealing a Wage Garnishment

An individual may determine that it is appropriate to appeal a wage garnishment if they believe they have a legitimate reason. However, the government has very specific conditions for listening to an appeal. An appeal for a wage garnishment must have compelling information that would cause the government to change its mind. If successful, an appeal for a garnishment will reduce the burden that is brought about by paying back taxes.

This article will be discussing how to appeal a wage garnishment after it has already been issued. However, it is very important to note that an individual does not have to wait for a wage garnishment in order to make an appeal. If a taxpayer believes they have substantial basis for an appeal that has not been brought to the attention of the government, they must make that their priority. This can, and should, be done before the wage garnishment has been issued.

Considering the Final Notice

The following will discuss what an individual must do after the final notice regarding the wage garnishment has been issued. The individual must, of course, observe this “final notice”. Take note that usually the final notice has to do with all levies in general rather than just the wage garnishment. The final notice contains instructions for those individuals who are dealing with wage garnishment and other tax levy issues. (For more information on what is included in this final notice, go to the “tax “services” tab and click on “tax levy”.) One of the items included is an application for an appeal.

Reasons for Appeal

There are many reasons to appeal a wage garnishment (or a tax levy). For one thing, the government’s record of taxes may have been inaccurate. The government is mostly correct but it is far from perfect. One should not believe that they have to pay the taxes just because the government says so. An individual must always go back and make sure that their records of taxes due can be reconciled with the government. If this has not been done thoroughly, there is really no way to get around a wage garnishment.

As discussed earlier in the article, in order to get rid of a wage garnishment, it is critical to review all tax returns for the years that are in question. In fact, the government actually expects individuals to go back and correct their unfiled tax returns. There are fines and penalties that deal with unfiled tax returns that only add to the burden of a wage garnishment. There is no good reason to leave a tax return unfiled.

If an individual believes they have found a discrepancy in the tax burden expected by the government, they have every reason to appeal the wage garnishment. Such discrepancies can be uncovered by filing old tax returns. If an individual finds something in the tax return that the government needs to know about, they may use that as the grounds for their appeal.

The government does not think too favorably on those who have unfiled returns. However, if the appeal reasonably explains the difference between the government’s expectations and the taxpayer’s calculations, the IRS may adjust the amount of taxes that are due. This may, in turn, lead to the removal of a wage garnishment. However, the amount of the discrepancy must be substantial enough to support such a move. One must also take into account that the government may indeed be on track with the amount that would have been reported on the tax return.

Although it would be rather late to bring it up to the IRS, it is possible that an individual paid all taxes and the government made an error. This would mean that the wage garnishment had been improperly issued. This circumstance normally deals with tax payments that had been made recently. Earlier cases of full tax payment would have probably been noticed before the wage garnishment was issued. If one believes that for some reason their payment has not been put on record, they may appeal the wage garnishment.

If an individual chose to submit an offer in compromise, they may use that as basis to appeal the wage garnishment. This can only be done if the offer in compromise has not yet been processed. The IRS will typically wait before acting on a wage garnishment if there is a pending offer in compromise. The offer in compromise may end up proving that the wage garnishment should never have existed in the first place.

Once the offer in compromise is processed and the taxpayer has an answer, the status of the wage garnishment may or may not change. If the offer in compromise was rejected, then the wage garnishment may stay. If the offer in compromise was approved, however, the individual may not have to deal with the wage garnishment. There are some rare cases, however, where a wage garnishment persists even after an offer in compromise has been approved. Such complex cases require the assistance of a qualified tax attorney.

One more reason to appeal a wage garnishment deals with installment payments. One of the ways to deal with back taxes and prevent a wage garnishment is to go to the IRS and arrange an installment payment. This installment payment allows for an individual to determine how much they pay and when they pay it (within the bounds of the IRS). If an individual has stayed consistent with installment payments, they may have good reason to appeal the wage garnishment.

The IRS is really concerned with whether or not the taxes are being dealt with. Therefore, even though back taxes persist to allow a wage garnishment, the IRS will consider removing it if they can see that the individual is capable of paying on their own. On the other hand, if one has defaulted on their installment payment, then the IRS has every right to demand collection through wage garnishment. However, if the individual has been responsibly paying through installments, the appeal should be approved.

One may also appeal a wage garnishment if they believe that the IRS has not fully considered their effort. If one finally decides to go back and file their tax returns, then the government will look favorably on them. This must, of course, be accompanied by active payment for back taxes. Normally, this is satisfied by proper installment payments.

As mentioned above, it is best to try and set up installment payments in order to remove a wage garnishment and give more control to the taxpayer. If an individual believes that they have been denied the option of installment payments for the wrong reason, they may use that to appeal the wage garnishment. It is much better to have the installment plan than a tax levy or wage garnishment. Therefore, an individual must use this option if available. If it is not available, then the individual should strongly consider an appeal for both the installment plan and the wage garnishment.

There are several other reasons for an appeal. If the IRS determines that the appeal is legitimate, it may remove the wage garnishment and give control to the taxpayer. This is why an appeal can be a very useful tool. For some individuals, the results of an appeal can have a major impact on their lives.

The importance and value of the appeal provide yet another reason to consult with a qualified tax attorney who knows what they are doing. A tax attorney can help an individual consider all of their options, even those that they did not initially believe to be possible. It is important for all options to be considered so that a wage garnishment can be taken care of. A tax lawyer with a significant amount of experience knows everything about wage garnishment and appeals.

Even if an individual chooses one of the simpler reasons to appeal, it is still incredibly useful to discuss the situation with a tax lawyer. A tax lawyer knows how to make an appeal for a wage garnishment especially effective. One may know the general idea of what they need for an appeal, but only a tax attorney can properly guide the individual to a place where the appeal is most likely to go through. A tax lawyer consistently works to achieve maximum benefit for their clients.

Alternative Option to Dealing With A Wage Garnishment

Although it is strongly recommended to consult a tax lawyer, there are other options for those who wish to deal with a wage garnishment. A simple call to the IRS may solve many problems. Many people do not consider this to be an option since they believe the IRS will be strict and harsh. This is not always the case. If an individual contacts the IRS because they are seeking a reasonable way to pay for taxes, the IRS will help. For basic questions and answers, the IRS is a great resource for those dealing with wage garnishment.

On top of being able to contact the IRS, there is usually a lot of information that is sent with all of the notices regarding back taxes and potential wage garnishment. The IRS wants people to pay, so they make sure that they are informed. The Final Notice regarding a tax levy usually comes with a few items that describe options for those who wish to prevent it. However, these handouts are still very technical and may require the assistance of another individual. In order to ensure the riddance of a wage garnishment, one must be absolutely sure they know what they are doing. Sometimes, this involves contacting a lawyer to verify one’s own understanding.

Conclusion

A wage garnishment has a very negative impact on those who are behind on taxes. It means that the government can directly deduct tax payments from a paycheck. A wage garnishment must be taken care of quickly in order to prevent further action from the government. There are many ways to take care of, or otherwise prevent, a wage garnishment.

The more notices come in the mail, the closer an individual is to a tax levy or wage garnishment. A wage garnishment is usually one of the last things that the IRS performs, because it usually seeks more valuable personal property first. One can prevent a wage garnishment by making alternative arrangements to pay taxes, such as an installment plan. (More details about how to take care of back taxes can be found in the “tax services” tab under “back taxes”.)

Once a final notice to tax levy or a wage garnishment has been sent, there are still options available. The priority of the taxpayer should be to get rid of the wage garnishment, and they can do so by paying attention to the options provided by the IRS. One way to remove a wage garnishment is to file a legitimate appeal. If an individual can present valid evidence to the government that proves that a wage garnishment is inappropriate, the IRS will consider its removal.

Deciding on the specific appeal, and how to present it, is often a challenge. Therefore, it is extremely useful to ask for the help of a qualified tax attorney in order to remove a wage garnishment. A tax attorney does everything that they can to make sure a taxpayer benefits the most. A tax attorney can present innovative and convincing ways to ask the IRS to remove a wage garnishment. Tax lawyers know the ins and outs of tax law and have the experience necessary to assist a taxpayer in need.

A wage garnishment is like a leech. It locks itself onto the income of an individual and feeds on as much of it as it can get. If a wage garnishment is ignored for too long, it can destroy an individual’s finances. Eventually, this interferes with the most basic aspects of life such as food, shelter, and other needs. Life becomes especially difficult for those who suffer from having a wage garnishment with a high rate of collection. The individual who suffers can remove this “leech”, but it is much better to seek help from a professional “doctor”: a qualified tax attorney. A tax attorney can make everything better in regards to the burden of paying back taxes and dealing with the consequences of neglecting them.

Do not let a wage garnishment get in the way of daily needs and finances. If one gets involved with a tax levy or wage garnishment, they must take action in order to minimize their burden. Paying back taxes must become a priority. A wage garnishment is one of the many consequences for neglecting taxes. Individuals must get on track with taxes and work their way to a future where they are caught up with all previous tax payments. Only then will the leech of a wage garnishment or other tax-related consequence release its strong hold.

Need Help with Your Wage Garnishment Issue?

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