IRS wage garnishment is one of the most serious consequences of unpaid taxes as it can quickly escalate if not addressed. Understanding how much the IRS can garnish and more importantly, how you can stop it, is vital for anyone facing financial hardship.
What is IRS Wage Garnishment?
IRS wage garnishment is a legal process that permits the IRS to deduct a certain amount of money directly from your paychecks to cover for unpaid taxes. This is a method the IRS uses to collect money from individuals who owe taxes or who have unpaid tax debts. According to an article by Gordon Law, the IRS does not need to get a court permission before your wages can be garnished as they have the authority to take this action after notifying you to resolve the debt.
How much can the IRS garnish
The IRS is authorized to garnish a portion of your wages to cover for your unpaid tax. However, it must leave you with enough income to cover your basic living expenses. The exact amount they can garnish from your paycheck varies. Here are factors that determines the exact amount that can be ganished from you:
- Income: The IRS calculates your disposable income by subtracting your mandatory expenses such as taxes, social security and medicare from your total income.
- Exemptions: Certain exemptions are allowed depending on your filing status, that is, if married, single, head of household and the number of dependents you have.
- Wage garnishment table: The wage garnishment table is used by the IRS to determine how much of your disposable income can be garnished.
- State laws: The IRS operates under federal law, However, some states may have additional protection that may limit the amount garnished by the IRS. Regardless, in most states federal law may be considered before state law thus allowing the IRS to garnish your paycheck.
How to stop IRS wage garnishment:
To stop the wage garnishment, there are several steps you can take and that includes:
- Pay your tax debt: You need to pay your tax debt in full to stop the garnishment of your paycheck. Once you pay off your tax debt, your employer will be notified and a portion of your paycheck will no longer be withheld from you.
- Set up Installment agreement: Installment agreement will allow you to pay your tax debt over time, that is installmentally, possibly within a month. Once you enter into this kind of agreement, they will stop the wage garnishment on your paycheck as long as you comply with the agreement.
- Request to compromise: An offer to compromise is an agreement which allows you to settle your tax for less than the full amount you owe. If accepted, you can set up a payment plan to settle your debt and the IRS will stop the wage garnishment in your account.
- Innocent spouse relief: If the tax debt is as a result of the actions of a spouse or ex-spouse and you were not aware of it, you may be considered for innocent spouse relief.
- Apply for currently not collectible status: If you can prove that you are experiencing financial hardship at the moment then you can qualify for currently not collectible status. When you are granted this status, the IRS will temporarily stop wage garnishment on your paycheck. This request will be granted if on evaluation of your income, it is discovered that your income is not enough to cover your basic expenses. However, know that even when your account is temporarily not garnished, your interest continues to accrue during this period.
- Request a collection due process (CDP) hearing: You can do this within 30 days of being notified of your wage garnishment. The hearing will give you an opportunity to present your case for review to determine if the wage garnishment on your paycheck should be allowed. Requesting a CDP temporarily stops the garnishment until the hearing is complete.
- Appeal: You can also appeal the garnishment if you believe the wage garnishment is not fair or you have grounds to dispute the amount. This process allows you to present accurate evidence and argue your case and if successful, the garnishment will stop.
- Legal assistance: It is advisable to seek legal assistance if you are unfamiliar with tax laws and procedures. Your attorney will assist you in navigating every step, exploring all options at your disposal to your best interest.
