If you have not paid back taxes that you owe or have failed to satisfy a federal debt, the Internal Revenue Service has the ability to garnish your wages. IRS wage garnishment is binding, and your employer must comply.
If you already know that you owe the IRS back taxes, then you know you need to act quickly to avoid garnishment. The IRS has the potential to garnish your wages, levy or seize your property to get what it is owed. The most common levy is to garnish your wages each week, but you’ll be informed before this occurs.
Once the IRS assesses your taxes, you’ll receive a notice and a demand asking you to pay what you owe. Failing to pay after this notice is what gets some people into trouble, as it can lead to receiving an Intent to Levy and a notice of a court hearing.
Don’t let this court hearing go without your input. You should speak with your attorney immediately if you receive the notice regarding a hearing and levy. You have time to try to resolve the situation outside court, for instance, by choosing to pay back what you owe on a payment plan.
What happens if the IRS moves forward with a wage garnishment order?
If the IRS chooses to move forward with wage garnishment, your employer has to allow it. A portion of your wages will be sent to the IRS each paycheck to help pay down your tax bill. The IRS is not limited when it comes to how much it takes, so it could take most or all of your paycheck if it felt the need. This is one thing that your attorney can help prevent if you attend the hearing. Even if garnishment is necessary or warranted, you shouldn’t work for no pay, since that can cause other issues such as falling behind on rent or utilities.
Can you stop wage garnishments once they start?
It is possible, but the options are limited. First, you should see if the IRS can agree to a repayment plan. If so, they may stop the garnishments and allow you to pay monthly. You may also be able to stop wage garnishment if you can prove that the IRS did not give you enough notice of the proceedings, if you declare bankruptcy or if you can show that the time the IRS was allowed to take to recover the tax expired before the garnishment was filed.