How To Stop A Wage Garnishment

All About Wage Garnishments and How to Stop or Prevent Them

What Is A Wage Garnishment?

In a wage garnishment, an employer is required to withhold a portion of an employee’s pay for the payment of a debt. The employer must send these funds directly to the institution to which the employee owes the debt.

Why Does The IRS Issue Wage Garnishments?

The U.S. Tax Code allows the IRS to garnish a portion of a taxpayer’s wages for the payment of a tax debt. The IRS can garnish wages, salary commission, and even federal benefits. A wage garnishment is a type of IRS levy.

IRS Wage Garnishment Calculation

The IRS determines the amount exempt from levy according to the employee’s filing status, the number of exemptions they take and how often they are paid. For example, a single filer with one exemption who is paid biweekly keeps only $396.15 of their pay check. The rest is sent to the IRS.

IRS Wage Garnishments Are Ongoing

Unlike other collection actions, wage garnishments are ongoing. This means that the wage garnishment remains in place until the tax debt is satisfied or until the taxpayer makes payment arrangements with the IRS.

How to Stop an IRS Wage Garnishment

In order to stop or prevent a wage garnishment, you must either pay the back taxes that are owed in full, or reach an agreement with the IRS to pay the taxes over time. The following are ways to stop or avoid a wage garnishment:

Contact the IRS

After receiving a notice from the IRS about a tax debt, take steps to resolve the issue. Contact the IRS at the phone number given on the notice, or, if your tax issue is not something you feel equipped to handle on your own, contact a licensed tax professional for help. Immediate action is the best way to avoid garnishment.

Ask for an Installment Agreement

Typically, once a taxpayer makes good faith efforts to resolve their tax debt, such as requesting an installment agreement, a tax professional can work with the IRS to have the garnishment lifted. Setting up and remaining current on an installment agreement is one way to stop a wage garnishment.

Filing An Offer in Compromise

When you submit an application for an Offer in Compromise (OIC), the IRS will stop all collection actions. The IRS has strict qualification factors for OICs and few that apply actually qualify. If the IRS believes that an offer was submitted merely as a delay tactic, they will reinstate the garnishment.

Change Job or Employers

While a person should never change jobs just to avoid a wage garnishment, it is true that wage garnishments do not follow the taxpayer when they change employers. It is upon the IRS to locate the new employer and issue a new garnishment. Though this is a way to avoid the garnishment, it is not a permanent solution to the problem.

File Bankruptcy

Declaring bankruptcy is another way to end a garnishment, since the IRS cannot pursue collection actions against a taxpayer in bankruptcy. Taxpayers should be aware that not all tax debts can be discharged in a bankruptcy. Once the taxpayer emerges from bankruptcy, the IRS is free to pursue collection actions.

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www.taxdefensenetwork.com

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