How to Stop an IRS Wage Garnishment
Delinquent taxpayers, whether accidentally or intentionally, have to deal with unpaid back taxes sooner or later. It is better to deal with it at the soonest time possible as the Internal Revenue Service (IRS) will go after the taxpayers' wages just to get what they owe the government. In this case, the IRS can impose a wage garnishment.
So you ask: What is wage garnishment?
Simply put, wage garnishment refers to a part of a person's salary or earning that is intentionally withheld by his employer. The employer then remits the withheld amount to the IRS to pay off a back tax debt. Aside from the IRS, courts and federal agencies can also issue wage garnishments on salaries, wages, bonuses, commissions, and even retirement benefits or pension earnings.
How does wage garnishment work?
First, a taxpayer who owes the IRS will be sent a notice and demand for payment. If the taxpayer does not pay the tax debt stated in the notice or he just ignores the notice entirely, the IRS will send a final notice. This final notice is sent 30 before wage garnishment takes effect, meaning the taxpayer still has some time to pay off his debt. Second, the IRS serves the final notice in person at the home or office of the taxpayer. It is important to know that the taxpayer does not need to receive the notice for the wage garnishment to be legal, as there are many taxpayers who change their address and the IRS knows only their last known address. Third, a notice is also sent to the taxpayer's employer. In this notice, the employer is instructed to withhold some amount of the taxpayer's salary and remit it to the IRS. Employers are not allowed to refuse wage garnishment. Fourth, the wage garnishment continues until the total tax debt has been paid in full by the taxpayer.
How can a taxpayer stop wage garnishment?
The first step to stop wage garnishment is for the erring taxpayer to contact the IRS immediately upon receipt of a letter of Intent to Levy or Notice of Levy. Doing so will save the taxpayer from the difficulty of dealing with the IRS and the humiliation of having one's wages withheld by one's employer.
The second step is to hire the services of a tax professional. A person expert in the field of taxation can serve as the taxpayer's liaison officer as the taxpayer may not be well-versed in the language of taxation. The tax specialist can deal with contacting the IRS and negotiating to put a stop to wage garnishment. The third step involves the tax specialist and the taxpayer coming up with a payment plan or an offer in compromise to settle the debt. For this step, the taxpayer's creativity can come into play just to raise enough money to take the debt down to zero balance. The taxpayer can hold garage sales, bake sales, sell white elephants, or do anything legal that might bring in the needed cash to fully pay the tax debt. However, if the taxpayer really cannot come up with the amount, he may go into an installment agreement with the IRS. In an installment agreement, the taxpayer agrees to pay off the tax debt on a monthly basis. Another way to pay off the debt is by filing an offer in compromise which allows taxpayers to pay the IRS less than the full amount that he owes. However, not all who file an offer in compromise get approved.
However, the surest way of preventing an IRS wage garnishment is the easiest thing to do: paying your taxes in full and on time each year.