IRS wage garnishment help
See how we can help with an IRS Wage Garnishment
If the IRS is taking part of your paycheck, it will keep doing it every payday until something changes. Here’s how a garnishment works, how much the IRS can take, and how we get it released.
- How it works
- Your employer sends part of every paycheck straight to the IRS
- How long it lasts
- Until the balance is paid, an arrangement is in place, or the IRS releases it
- What you keep
- An exempt amount based on your filing status and dependents
- Bonuses
- Can be taken in full once your exempt amount for that pay period is used
Talk to us about your garnishment
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The short answer
What Is a Wage Garnishment?
In one paragraph
An IRS wage garnishment, officially a wage levy, is an order that makes your employer send part of every paycheck to the IRS. It continues each pay period until the balance is paid, an arrangement with the IRS ends it, or the IRS releases it. Part of your pay is exempt, based on your filing status and dependents.
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.
Why it happens
Reasons It Happens
What you don’t want to do is leave an IRS debt unpaid for too long. 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 work out a resolution with the IRS or pay the debt in full to stop an IRS garnishment. Otherwise, if you ignore the IRS they can file a tax lien against you or your business.
The notices that come before a garnishment
Before the IRS can levy your pay, it has to send you a bill, you have to leave it unpaid, and it has to mail a final notice of intent to levy that explains your right to a hearing at least 30 days before the levy. It also has to tell you in advance that it may contact third parties, such as your employer.
- Tax billNotice and demand for payment
- RemindersBalance due letters
- Intent to levyWarning that collection is coming
- Final notice30 days and hearing rights
- Form 668-WLevy sent to your employer. Garnishment starts.
If you're still inside the 30 days on a final notice, we can request a Collection Due Process hearing for you. A timely request generally puts the levy on hold while an independent Appeals officer reviews your case. If the IRS has frozen a bank account instead, see our IRS levy help.
How much the IRS takes
How much of your paycheck the IRS can take
A federal wage levy doesn't take a fixed percentage. Your employer uses IRS Publication 1494 to work out an exempt amount for each pay period. You keep that amount, and everything above it goes to the IRS. The exempt amount is based on the standard deduction for your filing status plus an amount for each dependent you're allowed to claim.
Illustration only. The split depends on your pay, filing status and dependents.
Depending on your pay, the IRS share can be a large part of each check, which is why we treat a garnishment as urgent. Court-ordered child support that was in place before the levy reached your employer is protected from the levy.
Benefits and retirement income
Can the IRS garnish Social Security, pensions or SSI?
Social Security
Yes, partly. The IRS can take up to 15% of each payment through the Federal Payment Levy Program. Here's more on how the Social Security levy works.
Pensions and retirement
Yes. Pension payments and retirement accounts can be levied. Read whether the IRS can garnish your pension.
SSI
Supplemental Security Income is exempt from IRS levy under the tax code. See SSI and unpaid taxes.
Disability
Social Security disability benefits fall under the same 15% rule. If the levy leaves you short on basic costs, we ask for a hardship release. More on owing taxes with a disability.
Your options
How Do You Stop an IRS Garnishment?
There are several ways to stop a wage garnishment. Generally speaking, you must face the issue head-on and get the tax debt resolved as soon as possible.
Paying the Tax Debt in Full
Effect on the garnishmentThe IRS must release the levy once the balance is paid.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, we can look at other tax debt relief resolutions that will help you stop IRS garnishment.
An Installment Agreement
Effect on the garnishmentThe IRS must release the levy once a plan is in place that doesn’t allow it to continue.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 time. Balances of $50,000 or less often qualify for an IRS simple payment plan, which the IRS says gives most people up to 10 years to pay, and the IRS must release a wage levy once a plan is in place that doesn’t allow it to continue. 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.
An Offer in Compromise
Effect on the garnishmentThe IRS can’t start a new levy while the offer is pending.Another option and way to stop an IRS garnishment is 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. We work 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.
Hardship Status
Effect on the garnishmentThe IRS must release a levy that causes an economic hardship.If you can’t afford to pay off your debt then we can request hardship status for you. 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 “Currently Not Collectible” status 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 periodically check and confirm that you still qualify for this program as time goes on.
Bankruptcy
Effect on the garnishmentThe automatic stay generally stops IRS collection, including the garnishment, while the case is open.In some cases, declaring bankruptcy can be the right way to stop an IRS garnishment, and we’ll tell you if it’s worth discussing with a bankruptcy attorney. 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. If the court determines your debts will be forgiven then the IRS won’t be able to garnish your wages.
Professional Tax Relief Help
Effect on the garnishmentWe deal with the IRS and request the release for you.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 relief team who understands the choices you’re weighing. We are here to help you resolve your tax debt and keep the IRS out of your life. Schedule an appointment today by phone or email.
Working with Anthem
How we handle your garnishment
We find out exactly where your case stands
We file a power of attorney, pull your IRS account transcripts, and confirm the balance, the tax years involved, which notices went out, and whether any hearing rights are still open.
We contact the IRS for you
With a power of attorney on file, the IRS works through us. We tell them we're working on a resolution and get the right request on record.
We build your financial case
We put together your income, expenses and assets the way the IRS measures them, using its Collection Financial Standards, so the payment the IRS asks for is one you can keep up with.
We get the levy released
Once the arrangement is in place, we request the release. The IRS sends your employer a release of levy, the withholding stops, and we stay on the case to keep it that way.
Who works your case
Garnishment cases are collection cases, and our team includes tax relief specialists who know that process from the inside. Billy Fauller, EA, was an IRS Revenue Officer from 2009 to 2017 and now represents taxpayers in collection cases and IRS negotiations. Tina Lyon, EA, has worked hardship determinations, offers in compromise, Appeals proceedings and Revenue Officer matters.
Released garnishments are one of the results clients write about on BBB, Trustpilot and Google. You can read Anthem Tax Services reviews and watch client stories before you call.
Find out what it will take to get your paycheck back.
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Why a garnishment can take more than you expect
When the levy reaches your employer, you'll be handed a Statement of Dependents and Filing Status. It has to be returned within three days. If it isn't, your exempt amount is figured as if you're married filing separately with no dependents, which is the smallest exempt amount there is. When you call us, it's one of the first things we check.
Other income changes the math too. If you have a second job or other income, the IRS can apply your exemptions to that income instead and levy up to 100% of the pay from one employer. And because bonuses and commissions count as wages, a bonus paid after your exempt amount is used can go to the IRS in full.
A levy release doesn't erase the debt. The IRS says that without an arrangement for the balance, a levy can be issued again, so every release we request comes with a plan for what you owe.
Keep reading
Additional Wage Garnishment Resources
Questions
IRS wage garnishment questions
How do I stop an IRS wage garnishment?
The usual way out is a levy release tied to a payment plan or a hardship finding. We file a power of attorney, pull your IRS records, contact the IRS for you, and request the release once the right arrangement is on record. The IRS then sends your employer a release, and the withholding stops.
How much of my paycheck can the IRS take?
Everything above an exempt amount. That amount comes from IRS Publication 1494 and is based on your filing status, the standard deduction and the number of dependents you claim. Your employer works it out each pay period and sends the rest to the IRS. Depending on your pay, that can be a large part of each check.
How long does an IRS wage garnishment last?
A wage levy is continuous. It stays in place every pay period until the balance is paid, you have an arrangement with the IRS that ends it, or the IRS releases it. It doesn't expire on its own, which is why getting a release in place is the first thing we work on.
Can the IRS take my Social Security?
Yes, part of it. Through the Federal Payment Levy Program, the IRS can take up to 15% of each Social Security payment. Supplemental Security Income (SSI) is exempt from IRS levy. If the levy leaves you unable to cover basic living costs, we ask the IRS to release it for economic hardship.
Can the IRS garnish my income if I'm self-employed?
There's no paycheck to garnish, but the IRS can levy money that other people owe you. Its list of property it can levy includes accounts receivable and commissions, so payments from your clients can be taken, along with bank accounts. We handle these cases the same way: we get an arrangement in place and ask the IRS to release the levy.
Sources
Sources
- IRS: Information about wage levies
- IRS: How do I get a levy released?
- IRS: What is a levy?
- IRS: Federal Payment Levy Program
- IRS: Payment plans and installment agreements
- IRS: Simple payment plans for individuals and businesses
- IRS: Understanding your CP91 notice (Social Security levy)
- 26 U.S.C. 6334, property exempt from levy (SSI and child support)
- 26 U.S.C. 6331, levy rules while an offer or payment plan is pending
- 26 U.S.C. 6330, Collection Due Process hearings
- 11 U.S.C. 362, the bankruptcy automatic stay
- IRS Publication 1494, Table for Figuring Amount Exempt From Levy on Wages
- IRS Publication 1660, Collection Appeal Rights
Free consultation
Want your paycheck back? Talk to us today.
Tell us what's being taken and when it started. We'll contact the IRS and work on getting the garnishment released.
