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What Happens When You Face Wage Garnishment From The IRS?

The Internal Revenue Service (IRS), can garnish an individual's wages if he or she has a tax debt that has not been settled, similar to a creditor. However, the IRS is unique from creditors because it can garnish an individual's wages before receiving a judgment. In addition, the IRS also has the power to garnish more funds than other creditors. Fortunately for taxpayers, the IRS offers several payment options for individuals wanting to avoid wage garnishment.

What Tax Obligation Options Does the IRS Offer?

After an individual files his or her taxes, they will either owe the IRS money or be issued a tax refund. For those who owe the IRS money, there are several payment options. Although it is ideal to write a check to the IRS for the full amount owed, many individuals do not have the funds to make the full payment all at once, so these individuals will need to seek out other payment options. The IRS offers the following payment options for those not able to pay the full amount at once:

Arrange a payment plan

Make a settlement offer known as an Offer in Compromise

An Offer in Compromise can reduce an individual's tax debt. However, an individual must prove one of the following to qualify for an Offer in Compromise:

  • It is doubtful the IRS will be able to collect the full amount from an individual now or in the foreseeable future, which is known as "doubt as to collectibility."

  • There would be an "economic hardship" that would be "unfair" or "inequitable" if an individual was made to pay his or her full tax debt.


Individuals filing for bankruptcy should keep in mind that tax debt is excused when only certain criteria are met in a Chapter 7 case. Furthermore, those filing for Chapter 13 bankruptcy will more than likely have to repay the entire tax debt. The IRS will take action and initiate its collection process if an individual does not make efforts to pay his or her tax debt.

The IRS will provide individuals with a formal notice and the chance to make payment arrangements before wages are garnished. The IRS must first send an individual a written notice that states the amount owed, which includes itemized tax, penalties, and interest charges, as well as the date the balance is due in full.

Those who fail to make payment arrangements by the due date may have assets seized, liens placed on property, future tax refunds withheld, and wages garnished.


How Much Will the IRS Garnish From an Individual's Wages?

There are state and federal laws in place that limit the amount most creditors can garnish. However, the tax code only places a limit on what the IRS must leave. The tax code allows the IRS to garnish funds and only leave the individual enough funds for necessities needed to live. The number of exemptions that an individual claims will determine the amount of funds an individual can keep. This means a single person receiving weekly paychecks and claiming five exemptions will only keep $479.81 from his or her paycheck. If a married person gets paid monthly and files a joint tax return with two exemptions, he or she will only be allowed to keep $1,625.00 from his or her paycheck.


What to Do If You Face IRS Wage Garnishment 

The IRS offers a wide range of options for individuals to pay tax debt. In most cases, the IRS will only resort to wage garnishment as a final attempt to collect tax debt. If you fear that your wages could be garnished by the IRS, you should speak with a IRS tax defense attorney as soon as possible.

Attorney, Mark King has helped hundreds of clients solve their IRS problems. Her company has an A-plus rating with the Florida Better Business Bureau. They are an affordable local company with 23 years of tax defense experience. They will help keep the IRS off your back while negotiating the best settlement possible.

But you can’t wait any longer. Procrastination will lead to serious consequences. Waiting is the worst thing you can do.

Sign up below for a free, no obligation 15-minute consultation today. She will determine how bad your situation is and if you actually need an attorney.

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