You may be someone who has debts whether it’s related to a car payment, mortgage debt, or credit card debt. It’s ultimately your obligation to pay these off and do so on time. While it can be challenging to keep up and not fun to have to pay these debts down, there are consequences for failing to pay your debt. Soon you may find yourself receiving a wage garnishment.

Find out more about what wage garnishment is, why it happens, and learn more about how do you stop an IRS garnishment.

couple reviewing tax records

What is Wage Garnishment?

The first matter to address is what is wage garnishment and why you should care about it. What happens is that you may end up owing the IRS money at some point. One common method they use to collect your unpaid debt is called wage garnishment. It works by them seizing your wages to offset the debt amount. There are several reasons why your wages would be garnished including unpaid private creditors, unpaid child support, unpaid student loans, and unpaid local, state, and federal taxes.

Owe Back Taxes? We Can Help

Reasons it Happens

What you don’t want to do is leave an IRS debt unpaid for too long. The reason being is that once you do, the IRS can and will forcibly remove the funds to pay back the debt via wage garnishment. It’s considered a levy action by the federal government where they can use their powers to lawfully collect any unpaid tax debt. It differs from other collection agencies in that there is no federal court ruling required to begin this process and start collection actions.

You won’t be caught off guard if this happens to you. Instead, you’ll be given plenty of notice and warning that the IRS wants you to pay your tax debts and what will happen if you don’t. You must either appeal for a payment negotiation or respond with full repayment of the debt to not have them come after you and to stop an IRS garnishment. Otherwise, if you ignore the IRS they can file a tax lien against you or your business.

How Do You Stop an IRS Garnishment?

The good news is that there are ways and options on how to stop wage garnishment. Generally speaking, you must face the issue head-on and get the tax debt resolved as soon as possible.

  • Pay Off the Tax Debt in Full: One option you have is to pay off the tax debt completely. It will not only include the debt amount but also the interest and any penalties that you’ve incurred during the time your debt remained unpaid. However, this may not be feasible if you don’t have access to funds to pay it off entirely. Therefore, you may want to look into some other tax debt relief resolutions that will help you stop IRS garnishment.
  • Set up an Installment Agreement: You may want to use a tax-relief program if you aren’t able to pay off your debts in full. What this means is that you can slowly pay off your tax debts in installments or small payments over the course of up to three years. You are then agreeing to make these payments each month and to do so on time. While there will still be penalties and fees present, the cost of the fees will decrease as you pay down your debts.
  • Negotiate with the IRS: Another option and way to stop an IRS garnishment are to negotiate with the IRS to pay less than what you owe. One of the programs the IRS offers is called an Offer In Compromise. You’re essentially working to negotiate with the IRS here so that you can settle your debt and also pay less than the actual total amount that you owe.
  • Declare Hardship: If you can’t afford to pay off your debt then you may want to claim tax hardship as a taxpayer. You may qualify for this hardship if paying off your debt means you can’t cover your basic needs. You’ll then be put on the “Currently Not Collectible” so the IRS can’t come after you and try to collect your debt. Keep in mind that this only buys you time and your debt will still remain. Penalties and interest will continue to add up and the IRS will continuously check and confirm that you still qualify for this program as time goes on.
  • Declare Bankruptcy: You might also want to consider declaring bankruptcy as you try to figure out a way to stop an IRS garnishment. In some cases, this can be the right solution. A “stay” will go into effect the minute you declare bankruptcy and it will prevent the garnishing of your wages. A bankruptcy court will review your debt and determine if the debt you owe the IRS will be discharged. This is not a viable solution if your debt is associated with child support. However, in other instances, if the court determines your debts will be forgiven then the IRS won’t be able to garnish your wages.
  •  Seek Professional Help: Finally, you can stop an IRS garnishment by getting professional help for your situation. It is never a good idea to approach complex financial decisions without sound advice from a tax resolution team who understands the choices you’re weighing therefore we are here to assist you when it comes to tax debt relief and keeping the IRS out of your life. If you need help filing taxes or are behind on taxes our team of tax professionals can assist you with getting your taxes in order and can help get you back on your feet. Schedule an appointment today by phone or email

When you are going through tax issues, it’s natural to worry about whether you are going to lose your home. Your home is your biggest asset and it can be stressful to feel like you’re going to have to give it to the IRS. 

The process of dealing with the IRS if you are unfamiliar can be rather difficult and complex, but if you have the right advice, it’s not so scary. In this article, we’re going to talk about whether the IRS can and will levy a primary residence if there is a debt owed by you. Let’s read on and take a look at what can happen and how you can stop it from happening to you.

women reading notice from the IRS

Can they take your home?

The answer off the top? Yes, they can take your home. However, it’s important that you note that as a taxpayer you have many more options to resolve your tax debt than you think so the important thing is not to panic. If your tax returns show that you owe money to the IRS this means that you have a tax debt. 

Owe Back Taxes? We Can Help

If you continue not paying your taxes, enforced collection is the usual step that the IRS will take. The IRS can take your personal property during enforced collections and they do this using a tax levy. This levy can allow the IRS to take your wages as well as money sitting in a bank account and your home. The thing to remember the most is that this is highly unlikely to happen. Homes are actually only ever seized in around 300/330,000,000 issues!

When you have a tax debt it’s not going to be the taxes that could lose your home, it’ll be the unpaid levies involved. They will take the money from your paycheck automatically or from your account, and this can cause missed repayments on your mortgage. That’s mostly where the issues lie.

The IRS would prefer a lien

Did you know that the IRS would much rather put a lien on your home instead of a levy? A tax lien is a claim put against the house by the IRS and it protects the interest in the property. This means that when it’s sold, the IRS will be paid the amount of the lien. A tax lien is much easier to use to recover unpaid taxes from the sale of a house.

The tax debt is usually paid when a house is sold, but it’s not the only way that a tax lien can be removed. The IRS has a process and it enables taxpayers to make this particular request. The IRS does, however, have to make their lien secondary to a newer, refinanced mortgage. 

How are IRS tax levies used? 

Tax levies are used to garnish wages and other personal property not protected by the Internal Revenue Code (IRC) § 6334. The only protected assets are child support and unemployment benefits among others. Liquid assets are usually seized first and your home would be at the bottom of the list.

There are certain requirements that must be met before the IRS can seize your home and these include:

  • You have to owe more than $5,000 in tax debt
  • There has to be a signed order from a federal court judge – or a magistrate

Even with these two met requirements, if only one spouse owes the IRS, the other can stop the seizure. If the IRS moves forward to size the home, the notice has to be issued and posted at the front of the home. Usually, you’ll find these notices on the front door of the house.

What happens after a home seizure?

After your house has been seized, your home will be auctioned by the IRS. It’ll be sold for fair market value and the auction will be posted on a bulletin board at the local IRS office or even the nearest federal courthouse. Even when it’s sold, it doesn’t mean that you have to move out right away or anything. There is time to plan the next steps and you even have the right to buy your home back. This is known as the right of redemption.

Can you stop it from happening?

As a taxpayer, you have the rights of collection due process. These are rights that require the IRS to follow a certain procedure. There will be a hearing and it’s here that you can try to convince revenue officers that the house wouldn’t cover the mortgage or the cost of the sale.