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IRS Wage Garnishments Explained

Tax Lady Roni Deutch explains IRS wage garnishments and how taxpayers can get them released.

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What is an IRS Wage Garnishment?

Technically speaking, an IRS wage garnishment is a written notice the IRS sends to a taxpayer's employer that require the employer to withhold a significant amount from the taxpayer's paycheck and forward it directly to the IRS. The employer is legally obligated to follow the IRS' instructions, and can get hit with serious penalties if they do not.

Garnishments for Self-Employed Taxpayers

Do not make the mistake of thinking that just because you are self-employed that you will not have to worry about a wage garnishment. The IRS can levy your accounts receivable or unpaid contracts to collect your unpaid tax liabilities. Additionally, it is important to remember that a wage garnishment is only one of the IRS's collection activities. If they cannot garnish your income, then they will likely go after your bank account or personal property.

Notification of a Garnishment

When a taxpayer neglects to pay their full tax liability, the IRS will take certain steps to collect what they are owed. First of all, the IRS will send you a letter notifying you of past due taxes. They will usually demand that you pay within 30 days before taking collection activity. The IRS will then send you a final notice of their intent to levy. If you still do not respond after another 30 days, then the IRS can begin issuing wage garnishments and bank levies to collect your tax debts.

Garnishment Amount

The amount of money the IRS will require an employer to withhold will vary widely depending on the taxpayer's unique financial situation. Typically, the amount required to be withheld will be between 30 percent and 70 percent of the taxpayer's gross earnings. When calculating how much to garnish, the IRS will look at a number of factors, including the taxpayer's earnings, the frequency of when those earnings are received, the taxpayer's total tax debt, the taxpayer's total number of dependents, etc.

Releasing a Wage Garnishment

After the IRS issues a wage garnishment, it can be very difficult to get it released. Before the IRS will release the garnishment, you will need to resolve your tax debt. This can be accomplished by paying the IRS in full or negotiating a settlement such as an Offer in Compromise or an Installment Agreement. After the debt has been resolved and all tax returns have been filed, you can request that the IRS release the garnishment.

Your IRS Collection Rights

You have some rights when it comes to IRS wage garnishments. Your employer cannot legally terminate your employment because of a garnishment. If they do, then they will be subject to fines, and possibly criminal charges. You also have the right to negotiate with the IRS, either by yourself or by taking advantage of the Taxpayer Advocate Service. Finally, the IRS has a page on their website dedicated to taxpayer rights. You can check it out at IRS.gov.

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About Roni Deutch

Millions of people recognize tax attorney Roni Deutch as The Tax LadyŽ. She has been helping taxpayers nationwide resolve their tax liabilities for over 18 years. As an industry leader, she has saved her clients tens of millions of dollars and has helped thousands of families settle their back taxes.

 
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