The IRS Wage Garnishment Laws & Ways to Guard Yourself Against Them!
The IRS has several aggressive tactics to collect outstanding taxes from people, but their most forceful collection method is known as the IRS wage garnishment which is an IRS garnishment to take back payment of back taxes. Another name for IRS wage garnishment is IRS wage levy.
IRS wage garnishment is actually the deduction of funds from an employee’s financial compensation resulting from outstanding IRS taxes. Usually this should not be a shock as the IRS can only levy one’s incomes after repeated letters and warnings about the taxes owed. The is one of the IRS’s most aggressive tax collection systems and really should not be ignored. The IRS would rather settle taxes in a different manner but they will levy when they believe that they have actually run out of additional options. It is very important to have knowledge of how garnishments work to make certain you take the appropriate actions to avoid them or stop the IRS from taking your earnings.
The Legal Power of IRS Wage Garnishment
The IRS has the power to seize any personal or real property that you own if you make all of the following mistakes:
- You have failed to pay your outstanding taxes.
- You have received Letter 1058 – which is the Final note of intention to Levy.
- You still have not requested for a Collection Due Process Hearing within 30 days of receiving the Letter 1058.
Your personal property will include your savings, the money in your bank accounts and your paycheck. This is the reason that the IRS wage garnishments are referred to as personal possession seizures.
In the case where an order to withhold notice has been sent straight to your boss, it means that the IRS has levied your wages. Salary and Wages take account of your bonuses, commissions and fees. Once the IRS has sent your boss the Order to Withhold, your employer must, in the eyes of law, hold back a large proportion from each of your paychecks in accord with the note till the time your tax debts are cleared. In the case where your employer does not hold back a proportion of your earnings to give to the IRS garnishments, the IRS shall hold your employer personally liable for the shortage that should have been sent by you or your employer to the IRS. As the IRS garnishment on salary and wages attaches itself to your future paychecks, having a continuous effect, the levy ends only when you have paid all the outstanding taxes.
The IRS never seizes your entire paychecks. They take into consideration your dependents and also allow you to have enough money to continue living a standard lifestyle.
The IRS follows certain guidelines too. They use a formula to decide what proportion of your earnings is to be withheld by your boss and then sent to the IRS. The IRS takes into account your claimed exemptions and filing status, and then assigns you a definite sum from your paycheck to live. Whatever is left of your paycheck (which will be a huge chunk) is then taken by the IRS via the IRS wage garnishment in order to resolve your tax dues.
Ways to defend Yourself against an IRS Wage Garnishment
- When there is an offer in compromise with the IRS that is pending.
- When you have entered into an installment agreement with the IRS to compensate for your tax dues.
- You declare that you are bankrupt.
- There is a statute of limitation barring your tax dues.
We recommend that instead of taking these courses of action, you hire a tax expert to aid you with a settlement with the IRS against the IRS wage garnishments.
About Henry Byers
Henry Byers, ex-IRS Manager and CPA with a primary focus on the areas of IRS Tax Debt, IRS Levy & Wage Garnishment Release.
Specializing in resolving your IRS tax debt problems for individuals and small to medium sized businesses.
Whether its an IRS garnishment, Wage garnishment, IRS Lien, IRS Levy, IRS audit, IRS penalties or unfiled or delinquent tax returns that have you worried, we can help!
