| Wage Garnishment is a common way for the IRS to | | | | Partial Payment Installment Agreement Option |
| collect unpaid taxes. This forced recovery mechanism | | | | This method is similar to the prior option, but the tax |
| imposed by the State or Federal tax collectors can be | | | | payer does not pay off the entire amount owed in |
| a major nuisance for individuals. Wage garnishment | | | | taxes. Under this method the tax payer goes under |
| doesn't take into consideration that some months you | | | | financial review every two years and this could |
| will need more money than others, it just takes what in | | | | increase the payment owed by the tax payer or the |
| can until all taxes are recovered. Understanding how | | | | agreement could be terminated if the tax payers |
| this works and understanding other options available | | | | condition improves. |
| can help you prevent or get a tax wage garnishment | | | | Submitting an Offer in Compromise (OIC) |
| lifted. There are also companies available that | | | | This method is available for tax payers who have |
| specialize in this type of situation and can work with | | | | exhausted the previous two options and are not able |
| you to get a more manageable outcome. | | | | to make the payment in full or the payments in |
| How IRS Wage Garnishment Works | | | | installments. An OIC allows tax payers to settle their |
| Wage Garnishment is type of tax levy, and is one | | | | tax debts for less than the full amount. This option will |
| way in which the IRS (Internal Revenue Service) or | | | | only work if it is in the best interest of both the |
| State Tax Collection Agency attempts to recover | | | | taxpayer and the government and promotes voluntary |
| back taxes or taxes you owe by garnishing your | | | | compliance with all future payments and filings. Tax |
| salary or wages. In other words, they will deduct a | | | | debt on an individual can be compromised if doubt |
| percentage of your paycheck each month for taxes | | | | exists that the tax is correct, there is doubt as to |
| and it can be a significant. The IRS or State Collection | | | | collectibility or collection of the tax would create a |
| Agency can garnish your wages without a court order. | | | | financial hardship or would be unfair and inequitable. |
| Federal law states that a consumer can exempt up to | | | | Bankruptcy |
| 75% of disposable weekly earnings or 30 times the | | | | Bankruptcy can seriously hurt a person's credit making |
| minimum wage which is currently $7.25 (whichever is | | | | it very difficult for an individual to obtain any kind of |
| greater). In other words, the government cannot take | | | | financing in the future and should only be used if all |
| more than 25% of your weekly after-tax income or | | | | other options are exhausted. When Bankruptcy is filed |
| 30 times the minimum wage. State tax collectors can | | | | tax debts may be eligible for discharge under Chapter |
| also garnish your wages. Each state has different | | | | 7 or Chapter 13. |
| laws with wage garnishment but typically wage | | | | Currently not Collectible |
| garnishment can result in 25% of your net income | | | | When analysis of the IRS indicates that the tax payer |
| being garnished. Normally the individual will receive an | | | | is unable and has no ability to pay their tax payments |
| "Intent to Levy" CP Notice which is demanding | | | | the tax payments maybe waved. After this all |
| payment for taxes and threatening the taxpayer that if | | | | subsequent refunds are withheld and subsequent |
| unpaid or unresolved that a levy will follow. | | | | actions may cause recurring collectibility determinations |
| If this notice is ignored a final notice is normally sent 30 | | | | at later dates. When that tax payer is determined to |
| days before the garnishment begins. Sometimes this is | | | | be Currently Not Collectible the IRS will not currently |
| not the case, they can still garnish your wages even if | | | | pursue collection. |
| you do not physically receive a notice, especially if you | | | | How To Get a Wage Garnishment Released |
| have moved and the IRS doesn't have the most | | | | If you believe that the amount you are left with is |
| current address. This garnishment will continue until the | | | | insufficient for basic necessities like food & shelter |
| entire amount that is owed is paid back or there is | | | | you are very likely to be able to get a wage |
| another agreement that is made to pay these | | | | garnishment lifted. The best place to start is to call the |
| amounts back. | | | | IRS and try to set up an appointment and try to work |
| How to Prevent IRS Wage Garnishment | | | | out a different agreement with them. It may be difficult |
| Obviously, the best way to prevent a wage | | | | dealing with the IRS directly, they will always push for |
| garnishment is to stay current on your taxes; however | | | | you to pay the total amount owed no matter what |
| this is not always easy. If you receive a notice of levy | | | | your circumstances, but there are ways around this. |
| from the IRS, contact the IRS as soon as possible. | | | | There are many companies out there that specialize in |
| The best thing to do is to set up an appointment with | | | | these situations and know what is required to get a |
| them to discuss other options. Most of the time a | | | | wage levy or IRS wage garnishment released within |
| wage garnishment or wage levy can be a much | | | | 5-7 business days. |
| harsher financial burden than the other options that are | | | | Good tax resolution firms will give you a tax analysis |
| available. There are many options out there than wage | | | | with no obligation so you can find out what your |
| garnishment. A few of the most common options are | | | | feasible options are and what service fees would be. |
| the following: | | | | A diverse tax firm with deep experience can give you |
| Setting up an Installment Agreement with the IRS | | | | the quickest results and best outcome with not only |
| The IRS understands that some individuals cannot pay | | | | releasing the wage levy but also in coming to a |
| the entire amount owed and they are willing to work | | | | resolution with the IRS. It is always best to use a tax |
| with individuals to set up payment plans to ensure that | | | | firm with a diverse set of tax professionals (CPAs, tax |
| they will collect the money owed by the tax payer. | | | | attorneys, former IRS agents, Enrolled Agents) as |
| These installment agreements allow for the tax payer | | | | some professionals are better with one type of tax |
| to pay the entire amount of tax in smaller, more | | | | problem over others. |
| manageable payments over a period of time. | | | | |