Can the IRS Garnish My Wages for Taxes?

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.

What Are My Options for Paying Back Taxes?

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:

• Setting up a payment plan. With an installment payment plan, you make a payment plan offer, which, if accepted by the IRS, will stop all further collection action as long as you make the payments.
• Making a settlement offer called an "Offer in Compromise."

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.

What Are My Rights When the IRS Is Collecting Taxes?

You have certain rights as a taxpayer when the IRS is collecting taxes, including the right to:

• be informed about how to comply with tax laws
• get quality service from the IRS
• pay what you owe and not more
• challenge the IRS
• appeal an IRS decision
• know the maximum amount of time you have to challenge the IRS
• have privacy (the IRS can't be more intrusive than necessary)
• receive confidentiality in your dealings with the IRS
• be represented by a lawyer or other authorized representative, and
• to a fair and just tax system.

You can read more about your rights as a taxpayer on the IRS website.

What Is a Wage Garnishment?

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.

Types of Debt That Might Be Subject to Wage Garnishment

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:

• child support and alimony
• unpaid federal and state income taxes
• federal student loans, and
• court judgments against you.

Can the IRS Garnish My Wages for Back Taxes?

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.

Can the IRS Garnish My Wages Without Notice?

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.

What Are the Consequences of Not Paying Back Taxes?

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.

What Are the Different Ways the IRS Can Garnish Your Wages and Assets?

The IRS might seize your assets, place liens on your property, take future tax refunds, or garnish your wages.

How Much Will the IRS Garnish From My 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.

What Are the Different Factors the IRS Considers When Determining How Much to Garnish?

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.

What Can I Do If the IRS Is Garnishing My Wages?

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.

How Can I Stop the IRS From Garnishing My Wages?

You have several options for stopping a wage garnishment. Some of these options include:

• Paying the debt in full.
• Arranging a payment plan.
• Filing an offer in compromise.
• Filing for bankruptcy.
• Proving a financial or economic hardship.
• Proving the IRS made a mistake or violated the law.

What Are the Exemptions for IRS Wage Garnishment?

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.

What Resources Are Available to Help Me If the IRS Garnishes My Wages?

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.

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Getting More Information

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.