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IRS Garnishment: Rules & How to Stop Federal Tax Wage Garnishments
If you have failed to pay taxes you owe, the Internal Revenue Service will take aggressive action to recover the amount you owe. The IRS has more power than any other creditor in the United States, and they will use that power to get taxes people owe. If initial attempts to recover owed taxes are ignored, the IRS will begin wage garnishment. The IRS finds out who your employer is, contacts them and sets up a wage garnishment. Employers are required to take the money from your salary before you receive it. If an employer does not remove a portion of your wages to send to the IRS, then the employer is held liable for the amount they did not garnish. In addition to your salary, the IRS can garnish any other income coming to you, including commissions, bonuses, and sometimes retirement or pension funds.
How to Prevent an IRS Wage Garnishment
The IRS does not like to garnish wages. It's extremely costly for the IRS, but they know it works well to scare people into paying their taxes. Usually, people will contact the IRS to make payment arrangements as soon as they receive a notice that their wages are about to be garnished. If you receive a notice of wage garnishment – do not ignore it! Take action and contact the IRS or a tax professional to take steps in paying the taxes you owe. The IRS will not forget about the amount you owe and will proceed with a wage garnishment if you've received an intent to levy notice.
How Much Can the IRS Garnish?
The IRS will typically take 25% or more of your income once you've reached wage garnishment in the debt collection process. They don't care whether or not it leaves you with enough money to live on or pay your bills. The wage garnishment, or levy, as it is sometimes called, will remain in place until you've paid off your entire tax liability plus any interest and penalties that have accumulated. Sometimes, you may be able to come to another payment agreement but the IRS is more willing to work with individuals who make payment arrangements prior to a wage garnishment.
When Will the IRS Garnish Wages?
The IRS will take several steps to collect the taxes you owe before garnishing your wages:
- Your tax liability has been determined and you've been sent a notice demanding payment;
- You refused to pay the amount;
- You received a final notice of intent to levy;
Once you receive the final notice, the IRS will begin wage garnishment within 30 days to settle your tax liability.
How to Stop an IRS Wage Garnishment
If you did not take steps to prevent the IRS from garnishing your wages, you may still be able to stop it if you consult with a tax professional. Tax professionals can help you learn what options are available to you and how to settle your tax debt, sometimes in as little as 48 hours. They may be able to temporarily stop the levy until there is a different resolution in place.