IRS Garnishment And How To Stop It
IRS wage garnishment and wage levy is a process that taxpayers need to understand, especially if they do not agree with the IRS. Find out more here!
IRS Tax Garnishment
Liens and levies are common ways the IRS collects your tax debt; however, IRS wage garnishment is even more prevalent. Under federal law, the IRS has the right to seize your income and take away any federal tax debt you may owe, including commissions, wages, salary, or bonuses.
The IRS could garnish your wages even if they didn’t take you to court and receive a higher amount of your earnings than a private creditor might do. The IRS can typically garnish over 20% of your income due to your tax debts, but repayment plans are available.
The IRS cannot take your wages without written notice in advance, and you can dispute what you owe or prove that your tax debts aren’t accurate through the help of an IRS tax attorney.
Can You Stop an IRS Garnishment Once It Starts?
Several options are available to stop IRS wage garnishments, including changing employers, setting up an installment plan, offering in compromise, proving extreme financial hardship, or filing for bankruptcy. If you change your employer, the IRS will inevitably find out and reissue the wage garnishment. That being said, the most effective way is to appeal.
With the help of a tax professional, you can stop wage garnishment and reduce your monthly payments. Call Hutton Tax Solutions at (405) 643-4567 for a free consultation on your case and learn more about unpaid tax debt and wage garnishment.
IRS Garnishment Letter
Garnishing your wages will lead you to financial hardship, however, the IRS can’t do this without prior notice. You will receive a written notice before any garnishment action is taken. The notice must inform you about your unpaid taxes, the total taxes owed, and how much time you have before the pay period expires.
This is where you can stop an IRS wage garnishment by paying what you owe through a payment plan with the help of an IRS audit lawyer. You should contact tax attorneys to prevent wage garnishment proceedings if you believe the amount owed is incorrect. Your tax situation will become worse if you ignore the first letter of notice.
Can Bankruptcy Stop the IRS Wage Garnishment?
Filing for bankruptcy can offer some relief from the stress of an IRS wage garnishment. Since the automatic stay immediately goes into effect, that will stop all debt collection, including wage levies. However, assessing how much of your tax debt can be dischargeable is hard. If not paid through bankruptcy, the non-dischargeable tax debt will have to be paid after the bankruptcy procedure is over.
How IRS Wage Garnishment Works
The way in which wage garnishment works is simple. If your tax issues aren’t resolved by the deadline of the first notice, you will receive a second one, which is known as the Final Notice of Intent to Levy.
This is the last chance to avoid wage garnishment and have your bank accounts suffer. The final notice must be sent 30 days before wage garnishment through registered or certified mail. During the 30-day period after receiving this notice, you are also entitled to appeal. Unless you appeal the decision, the IRS will start garnishing your wages, resulting in economic hardship.
Wage garnishments are initiated when the IRS notifies your employer of your wage garnishment. To repay the IRS, your employer must take a designated portion of your paycheck.
How Can an IRS Garnishment Attorney in Edmond, OK, Help You Stop the Wage Garnishment?
Having your wages garnished can make you feel terrible and like there is no way out. However, a qualified professional can check whether the IRS made a procedural error in assessment or whether the time to collect the tax had expired before the IRS sent the notice.
It’s worth mentioning that the IRS will stop their attempt to garnish your wages if you agree to the installment plan or qualify for an Offer in compromise. A qualified attorney could help you negotiate favorable terms with the IRS. They can also assist you if you want to prove that wage garnishment will prevent you from caring for your family’s basic needs.
If you choose to file for bankruptcy or dispute what you owe by going through an appeal procedure, make sure you have an experienced attorney by your side. Winning an appeal process can also stop the IRS wage garnishment.
Appealing the IRS Decision
If there is an error in assessing your tax debt or there is another issue, you should contact the IRS and try to resolve the issue. If your tax bill isn’t resolved, you have the right to appeal their decision to garnish your wages.
Bear in mind that it is crucial you take action within 30 days of receiving the final levy notice that the IRS will garnish your wages.
According to the IRS, you have to submit Form 12153 to the IRS. If you lose the appeal, you can contest that decision within 30 days. But, since certain protocols have to be followed, it would be wise to hire tax pros or skilled tax attorneys. In addition, if you can’t afford to have your wages garnished, you can ask for a wage garnishment exemption or a levy release.
IRS Wage Garnishment Table
The IRS doesn’t have the right to take your entire paycheck. In Oklahoma, the garnishment amount is limited to 25% of your disposable earnings in a week, after mandatory deductions, or the amount that your disposable earnings exceed about 30 times the federal minimum hourly wage, under tax law 15 U.S. Code § 1673.
However, there are exceptions. For example, when it comes to bankruptcy and federal or state tax payments, or child support payments, garnishment of wages at a greater amount can occur. If the employee supports a current spouse or child who is not the subject of the support order, 50% of an employee’s wages can be garnished for child support. If an individual is not supporting a spouse or dependent child, 60% of their weekly disposable earnings can be garnished.
IRS Wage Garnishment Help
Stopping IRS levy and understanding your financial and tax situation better is accomplishable through an appeal. By working with a tax attorney, you will better understand federal tax lien and tax liability and stop the IRS wage garnishment. You shouldn’t avoid asking for help from tax professionals if you feel that your tax debts aren’t justified.
At Hutton Tax Solutions, we believe that the foundation of any successful appeal is an excellent attorney-client relationship. For a free consultation on your wage garnishment case, please contact us at (405) 339-7493.