Before the IRS garnishes your wages, you should receive a notice in the mail. The Notice of Intent to Levy should inform you of your right to request a hearing. It’s critical that you react quickly if you receive this notice because it is your last chance to stop the impending wage garnishment.
How Wage Garnishments Work
The IRS can’t seize all of your paycheck. You’ll be left with a portion of your pay based on your filing status and how many dependents you claim. The rest goes to the IRS.
If you receive a bonus from the same employer, the IRS can take 100% of the bonus. If you have income from other employers or sources, the IRS would need a separate wage garnishment to seize those funds.
The wage garnishment is continuous, meaning that your paychecks will be garnished every pay period until your tax debt is paid off or you negotiate another type of tax resolution.
Avoiding the Wage Garnishment
Whether your wages are already being garnished or if you’ve just received the levy notice, there are ways to avoid the wage levy. The most obvious is to pay your tax debt in full, but this could be difficult if you owe $50,000, $100,000, or more in back taxes, penalties, and interest.
An installment agreement is another good option. If you compare your monthly installment payment to how much the IRS seizes in a wage garnishment, you could end up paying much less each month. However, this will depend on your income, how much you owe, and other factors.
You can also submit an Offer in Compromise (OIC) to settle your tax debt. If your offer is accepted, the wage garnishment will be eliminated, and your tax debt will be settled as long as you pay the offer amount and meet other terms. Check with a tax attorney before you submit an OIC to make sure you qualify.
Finally, you can request Currently Not Collectible (CNC) status if the wage garnishment would cause a financial hardship. The IRS won’t levy your wages while your account is classified as CNC, but your tax debt will continue to accrue penalties and interest.
Contact a tax attorney if you’ve received a wage levy notice or if the IRS is currently garnishing your paychecks.
Get help with IRS wage garnishments by calling The Gartzman Law Firm at (770) 939-7710. We can listen to your concerns and help you find the best tax resolution strategy for your case.