A wage garnishment is an IRS collection action where the IRS begins to deduct money from a taxpayer’s compensation, including salary, hourly wages, accounts receivable, or any other income sources, to satisfy an unpaid tax debt. Although a wage garnishment can be stopped, IRS Tax Attorney Network suggests taxpayers to pay off their tax debt early to avoid aggressive collection actions of the IRS.
The Process of a Wage Garnishment
Before the IRS begins the process of a levy of a taxpayer’s wages, it has already sent out multiple notices informing taxpayers of the tax debt and how to resolve it. IRS Tax Attorney Network wants taxpayers to understand that the IRS does not need a court order to start a levy.
It is only after taxpayers ignore the notices and fail to pay their tax debt that the IRS considers a wage garnishment or other methods of levy, such as a bank levy, seizure of property, and federal payments or state refunds to fulfill a tax debt. IRS Tax Attorney Network adds that these are the most aggressive IRS collection actions that can create much financial disturbance for taxpayers.
The IRS sends a letter to the employer of a taxpayer whose wages are being levied to direct them to withhold a portion of the employee’s pay and send it directly to the IRS for fulfillment of the unpaid tax debt. An employer cannot refuse the IRS, or they may face penalties.
For self-employed taxpayers, the IRS sends the letter for a wage garnishment to a taxpayer’s accounts receivable. The money owed for the services the taxpayer has provided are sent directly to the IRS in such a case. IRS Tax Attorney Network informs taxpayers that their federal and state payments, such as social security, disability or welfare, can also come under a levy.
Resolution of a Wage Garnishment
A wage garnishment will continue until the entire tax debt amount is paid by taxpayers or arrangements are made to pay off the tax, IRS Tax Attorney Network briefs. Most taxpayers who find themselves facing a wage garnishment take help from tax resolution companies or tax professionals to stop the levy and resolve the tax debt issue.
As the IRS will not stop until it has recovered the full tax debt amount through a levy, it requires in-depth knowledge of the country’s tax laws, various tax codes, IRS policies and programs, and skills in IRS negotiations to stop a wage garnishment.
A wage garnishment will be ended by the IRS only in two cases:
- The tax debt is paid off or arrangements are made to pay it off.
- The time expires for legally collecting the tax debt.
The amount of time the IRS has for collecting back taxes as ten years. Therefore, IRS Tax Attorney Network suggests taxpayers to review the number years since their tax debt has been assessed by the IRS.
Taxpayers are advised to act when they receive the final notice informing them of the IRS’ intent to levy and take help from tax experts. Timely help not only saves taxpayers from the crisis that a wage garnishment brings, but also makes a tax debt resolution easier.
For more information on finding a trusted tax adviser visit IRS Tax Attorney Network