We were all taught when just youngsters that four letter words are bad and their use should be avoided. Unfortunately, it is not until adulthood that most humans file tax returns and learn of fear much greater than four letter words — the three letter acronym IRS. This article hopes to assist with information hoping to alleviate stress and stop IRS threats of wage garnishment.
What Is Wage Garnishment?
Wage garnishment is a means to collect money directly from your paycheck before you are paid. If you are facing wage garnishment, it is likely you were having problems paying a creditor. If there is a judgment against you, your employer will take money from your paycheck to pay this creditor. If you have a tax lien for unpaid taxes, the IRS can garnish your wages to pay your tax debt.
How Much of Your Wages Are at Risk?
Under federal law, most creditors are limited to garnish up to 25% of your disposable wages. However, the IRS is not like most creditors. Federal tax liens take priority over most other creditors. The IRS is only limited by the amount of money they are required to leave the taxpayer after garnishing wages.
Tax levies on wages, salary, and other income are based on a table, depending on the debtor’s pay period, filing status, and number of dependents claimed. For example, using the IRS 2021 tables, a debtor who is paid biweekly, claims one dependent, and is filing single has only $648.07 exempt from their wage garnishment. If the taxpayer earned $2,500 for that paycheck, the top $1,851.93 would be taken as part of the IRS levy.
Stopping Wage Garnishments
To stop the IRS from taking money from your paycheck for a tax debt, you need to have the tax lien released. It is best to contact an experienced tax professional regarding any IRS questions or issues, like the experienced team of tax defense attorneys, CPAs, and enrolled tax agents at D Tax Solutions, online at https://www.DTaxSolutions.com, phone 888.578.9568, or at the office located at 20 Truman, Suite 103, Irvine, CA. Below we have provided several of the ways an IRS wage garnishment may be released:
(A) Pay Off Your Tax Debt. The IRS will automatically release a tax lien when the taxpayer pays off their tax debt. Once the IRS issues a release, it may take a few days before your employer accepts the release and will no longer garnish your wages.
(B) Immediate Economic Hardship. The IRS can also release a levy against your wages if it is causing an immediate economic hardship. This is determined on a case-by-case basis. According to the IRS, “economic hardship” means “the levy prevents the taxpayer from meeting basic, reasonable living expenses.”
(C) Installment Agreement.
The IRS may be willing to agree to an individual agreement plan to remove the tax lien in exchange for making regular payments against your tax debt. A pay,ent plan still requires the taxpayer to pay off all their tax debt, including penalties and interest. However, the payments can be made over time and as long as you continue with the terms of the installment agreement, the IRS should withdraw their lien.
(D) Offer in Compromise.
If you owe more in taxes than you will likely be able to pay off, an offer in compromise may be your best option. An offer in compromise (OIC) is an agreement with the IRS to clear your tax debt with a lump sum payment or through periodic payments. The IRS will only grant this option as a last resort, based on the taxpayer’s income, expenses, assets, and ability to pay.
If the IRS is threatening to garnish your wages, the tax professionals at D Tax Solutions can help. Contact them online at https://www.DTaxSolutions.com, phone 888.578.9568, or at the office located at 20 Truman, Suite 103, Irvine, CA.
It is extremely frightening when you receive a notice of intent to levy and your wages suddenly drop. Many people ignore IRS notices, hoping that the problem will go just go away. Taking action now can get the lien released so you can move on. Contact the experienced tax professionals at D Tax Solutions to get help and find out how you can recover from an IRS wage garnishment? D Tax Solutions can be found online at https://www.DTaxSolutions.com, phone 888.578.9568, or at their brick and mortar office located at 20 Truman, Suite 103, Irvine, CA.