Frequently Asked Questions about IRS Wage Garnishment

If you've received notices in the mail that IRS wants to garnish your wages due to tax debt related to your federal tax due, you probably have a lot of questions about why this is happening and how you can stop it. Wage garnishment is a collection practice the IRS uses to notify your employer to send a portion of your earnings directly to the government as payment for your tax penalties or tax debt, (back taxes).

For those who move around a lot or forget to update their address with the IRS, the first time they may even become aware of a wage levy against them is when their employer notifies them of the deduction from their earnings. This can be an embarrassing situation at the very least, but the problem at hand can spiral out of control if action isn't taken soon enough.

You can act now by becoming more aware of the basics of wage garnishment and how it can affect your life. Then, reach out to our qualified tax attorney at Damiens Law Firm, PLLC for help with challenging the IRS' wage levy against you or claiming valuable income exemptions that can protect you from further financial hardship.

Can the IRS Garnish Wages?

Yes. Wage garnishment is a legal debt collection tool that both the IRS and private creditors can use. If you are subject to a wage garnishment for back taxes, including unpaid tax penalties or debt, the IRS or creditor will seek payment by instructing your employer to directly pay them a certain amount of your earned wages.

If you have a spouse, the wage garnishment could affect both of you since it doesn't differentiate between your take-home pay. However, if you are responsible for paying child support or alimony to someone else, that debt will be subtracted from your entire paycheck. When your employer receives an official notice from the IRS.

Also, your actions to remove a wage levy will depend upon if it is this IRS or State that is garnishing your wages. Another consideration is what portion of the debt is penalties and interest vs. income taxes.

How much can IRS garnish wages?

When the IRS sends a final notice of intent to levy from the IRS indicating they want to garnish your wages, there are a few questions that are probably running through your mind. It depends on your circumstances. When the IRS wants to garnish your wages from each paycheck will be released in accordance with federal law and how much you owe. Generally, the IRS will take 25 to 50% of your disposable income. Disposable income is the amount left after legally required deductions such as taxes and Social Security (FICA).

There are exceptions to this rule, however, that could protect some or all of your earnings from wage garnishment. Contact our tax attorney at ​Damiens Law Firm for more information about ways to stop wage garnishment.

Does the IRS Need a Court Order to Garnish Your Wages?

No. While your credit card company, mortgage lender, or another private creditor would need to take you to court and get permission to garnish wages, the IRS does not. You can, however, expect to receive sufficient communication from the IRS before it begins garnishing your wages.

You may be able to stop the IRS from withholding your wages; however, you will have to request a hearing. Contact a tax attorney at Damiens Law Firm immediately if you would like assistance with getting an emergency hearing so we can help you get this levy released.

Is Wage Garnishment the Same as Tax Levy?

No. Unlike wage garnishment, a tax lien or levy freezes assets and debts of yours that are over $50,000 while the government seeks payment for taxes owed. If you're facing an IRS tax levy against your bank or assets, it's probably too late to act on your own and expect results. In this instance, contact our tax attorney immediately to discuss your options.

If for whatever reason, you've been unable to get your wage levy stopped by contacting the IRS on your own and need an experienced attorney, we can help. Contact us today to set up a free initial consultation. We will walk you through what's happening as it happens from a tax professional. With over 16 years of

How Much of My Income Can the IRS Take?

There is no standard percentage of what can be garnished per pay period or per week, but the IRS may be permitted to take a little more than private creditors could. The amount of money the IRS can take from your paycheck is the result of a complicated calculation that determines how much of your income is exempt from wage garnishment. The non-exempt portion may be claimed entirely by the IRS. This will also depend upon your filing status (single, Married filing joint, Married Filing Separate, or Head of Household)as well as the number of dependents on your tax return.

Are There Any Exemptions Available?

Yes. Although it's more difficult to provide a clear answer as to how much the IRS can garnish from your wages, the amount that can be claimed as exempt is a little more discrete.

The following portions of income can be claimed as exempt from wage garnishment:

  • About $12,200 annually for individuals filing as singles without any dependents

  • About $26,650 annually from a head of household's income with two dependents

  • About $32,700 annually from a married persons jointly filing with two dependents

These values reflect exemptions for tax year 2019 and are likely to shift year-to-year. Regardless, these figures can provide a rough estimate of what to expect so you can budget accordingly.

If I Earn a Bonus at Work, Will I Get to Keep It?

Probably not. Bonuses, commissions, fees, and other types of compensation can all be garnished from your paycheck. If your bonus is not exempted from wage garnishment, it can be claimed by the IRS in its entirety.

How Often and for How Long Will the IRS Garnish My Wages?

As a continuous tax levy, you can expect the IRS to garnish your wages from every paycheck until your tax debt is satisfied or you take other actions to comply with the IRS.

A wage levy can stop – even if you still owe tax debt – if any of the following occur:

  • The IRS must stop collections if the debt is paid in full

  • The IRS accepts a payment plan agreement that will whittle away at your tax debt over time

  • You can prove that wage garnishment is causing financial hardship

  • You file an offer in compromise, which is an agreement with the IRS to settle a tax debt for less than what's really owed. You should be aware that filing an offer in compromise will suspend the statute of limitations for the IRS to collect your tax debt. This means, you need to be sure you qualify, otherwise, you're just extending the time period in which the IRS has to collect the tax debt.

  • You file for bankruptcy

  • You can prove in tax court that the wage garnishment against you was done in error or as a violation of the law or the IRS' own procedures

  • It's worth noting, if you owe money and have not filed a tax return, or have multiple tax returns due, these must be completed before you contact the IRS. The IRS will not offer any debt relief for tax debts until you have filed the past due tax return.

Exactly How Will the IRS Notify Me of Wage Garnishment?

The IRS will send a series of at least three notices to your last-known address before it engages in wage garnishment. Still Have a Few Questions. How Can I Get Professional Help?

Wage garnishment can be a scary experience for taxpayers who don't understand the process and what to expect from an IRS wage levy. Having a tax attorney explain your options is essential, considering you only have 30 days to request an administrative hearing if you're facing wage garnishments.

I've received a notice about wage garnishments. What should I do?

First, don't panic – many people receive wage garnishment notices from the IRS when they aren't really in danger of having their wages taken from them. If you're served with a notice that your wages will be garnished, contact our tax attorney immediately to begin preparing your defense

In order, these notices will include:

  • A demand for payment (CP14, CP501, CP503)

  • A notice of intent to levy (CP504)

  • A notice of your right to a hearing for due process collection (LT11/Letter 1058), which will be sent via certified mail

After your receive an LT11/Letter 1058, you can expect the IRS to begin garnishing your wages two weeks after your deadline to request a hearing has elapsed.

Do I Have a Chance to Fight against Wage Garnishment?

The LT11/Letter 1058 will have information about how you can ask for a hearing to request a payment agreement for your unpaid taxes or to challenge the IRS' assertion that you owe anything at all. The hearing must be requested within 30 days of the notice date. Wage garnishment will take place about two weeks after this deadline.

What Do I Do When I Start Receiving These Notices from the IRS?

If you receive any notices from the IRS threatening wage garnishment or a tax levy against you, consult with a tax attorney as soon as possible. These professionals are uniquely qualified to handle this serious legal and financial problem. Many people don't know how to deal with the IRS when they're faced with a problem like this, which can make their situations more stressful and even worse.

How We Can Help

If for whatever reason, you've been unable to get your wage levy stopped and need an experienced attorney, we can help. Contact us today to set up a free initial consultation. We will walk you through what's happening as it happens from a tax professional.

At Damiens Law Firm, PLLC, we work with clients like you who have faced tax-related wage garnishment from the IRS. No one wants to be in this position, but it can be made easier by having tax professionals in your corner speaking to the taxing authorities and making sure you are being fairly treated by the IRS when it seeks a tax-related wage garnishment. We can help you claim exemptions or review the underlying reasons why you're facing a wage levy to ensure your interests and financial well-being can be as protected as possible in your unique situation.

If you're interested in exploring our tax relief services and how we can help people like you, contact Damiens Law Firm, PLLC online or call (601) 202-9788.