The Internal Revenue Service (IRS) can garnish your wages if you owe a tax debt. Unlike most other creditors, however, the IRS can garnish your wages without first getting a judgment, and the amount it can take is usually more than regular creditors.
Fortunately, the IRS has many options so that you can avoid wage garnishment and you'll get notification before your wages are garnished.
Many people can't pay the full tax amount they owe all at once and need to explore additional opportunities to settle up with the IRS. These options include:
Filing for bankruptcy might offer you relief. However, it's important to understand that taxes are rarely discharged in a Chapter 7 case (although it can happen) and that you'll have to repay your entire tax debt in a Chapter 13 bankruptcy. If income tax is your only debt, before you consider bankruptcy, determine whether you can use one of the IRS's many debt relief plans.
If you do nothing, then the IRS will initiate its collection process.
You have certain rights as a taxpayer when the IRS is collecting taxes, including the right to:
You can read more about your rights as a taxpayer on the IRS website.
A "wage garnishment" (also called a "wage attachment") is a court or government agency order requiring your employer to withhold a specific amount from your wages and send it to a creditor. How much of your wages may be garnished depends on the type of debt, as well as federal and state garnishment limits.
Generally, any of your creditors might be able to garnish your wages. Some creditors must first get a judgment and court order before garnishing wages. Other creditors don't need a court order.
The most common types of debt that may be garnished from your wages include:
The IRS can garnish your wages but won't start the garnishment without giving you notice and an opportunity to make payment arrangements. However, unlike most other creditors, it doesn't have to first sue you and get a judgment to start the garnishment process.
To begin the process, the IRS must send you a written notice stating the amount you owe. The notice must itemize all of the charges (tax, penalties, and interest) and give you a date by which you must pay the balance in full.
If you don't comply with the demand for payment within the stated time, the IRS will then explore how it may most effectively force you to pay the tax.
The IRS might seize your assets, place liens on your property, take future tax refunds, or garnish your wages.
State and federal law limits the amount most creditors can take from your wages. The tax code, however, limits what the IRS is required to leave.
The IRS will take as much as it can and leave you with an amount that the tax code says is necessary for you to pay for basic living necessities. The amount you can keep corresponds to the number of exemptions you claim for tax purposes.
Refer to this IRS table to see how much of your wages are protected.
The IRS traditionally offers a wide array of options to deal with tax debt. It will usually only use wage garnishment as a last resort when you've ignored all other attempts to address the debt.
You have several options for stopping a wage garnishment. Some of these options include:
The amount you can exempt from wage garnishment depends on your financial and tax situation. The IRS sends a wage garnishment notice to your employer, who must give you a copy. The notice includes an exemption claim form, which you can complete and return.
Talk to a lawyer to learn more about your particular circumstances.
To get help with an IRS wage garnishment, consider talking to a tax professional or a lawyer experienced in tax law. A tax professional or attorney can analyze your situation, determine an appropriate action plan, and advocate on your behalf.
If you can't afford to hire a tax professional or lawyer, a Low Income Taxpayer Clinic might provide you free or low-cost assistance. These clinics help low-income individuals who have disputes with the IRS.
The IRS website provides information for those dealing with wage garnishment, including wage garnishment procedures, your rights as a taxpayer, and potential options for resolving a tax debt. You can also contact the IRS or a local Taxpayer Assistance Center for help.
Find out who can garnish your wages.
Learn the difference between a garnishment and a levy.
You can get more information on IRS collection procedures and paying your tax bill from the IRS website. To get information specific to your situation, consider contacting a local attorney.