If you owe back taxes to the IRS and haven’t made arrangements to settle the debt, you may eventually face a wage garnishment. It’s one of the more serious collection actions the IRS can take, and it can significantly impact your finances. But what exactly is an IRS wage garnishment, and what should you do if it happens to you?
Understanding Wage Garnishment
Wage garnishment is a legal process where a portion of your paycheck is withheld by your employer and sent directly to the IRS to satisfy a tax debt. This isn’t something that happens immediately after a missed payment. The IRS follows a process of notices and warnings before resorting to garnishment.
Unlike private creditors, the IRS doesn’t need a court order to garnish your wages. Once your debt is past due and they’ve sent the proper notices, they can legally instruct your employer to begin withholding part of your pay.
How Much Can the IRS Take?
The IRS doesn’t take a fixed percentage of your income. Instead, it calculates how much of your wages are exempt based on the number of dependents you claim and the standard deduction for your filing status. Everything above that exempt amount can be garnished. In some cases, this can leave you with significantly less income than you’re used to.
For example, if you’re single with no dependents, the exempt amount is relatively small, and the IRS may garnish a large portion of your paycheck. The exact figures are updated annually and are based on IRS Publication 1494.
How the Process Begins
Before garnishing your wages, the IRS will send a series of notices:
- Notice and Demand for Payment – This is your first official notice of tax due.
- Final Notice of Intent to Levy and Notice of Your Right to a Hearing – This is your last chance to take action. The IRS must send this at least 30 days before garnishing your wages.
If you ignore these notices or fail to make arrangements, the IRS will contact your employer and begin withholding money from your paycheck.
What You Can Do
If you receive a Final Notice of Intent to Levy, don’t ignore it. You have options:
- Request a Collection Due Process (CDP) hearing – This gives you the chance to dispute the debt or propose an alternative solution.
- Set up a payment plan – You may qualify for an installment agreement to pay your debt over time.
- Submit an Offer in Compromise – If you can’t pay the full amount, the IRS might accept a lower lump sum.
- Prove financial hardship – If garnishment would cause significant hardship, the IRS may temporarily pause collection.
Final Thoughts
An IRS wage garnishment is a serious matter, but it’s not the end of the road. The key is to respond quickly and explore your options. With the right approach—and professional help if needed—you can stop wage garnishment and start getting your finances back on track.
Stopping Wage Garnishment from the IRS can be difficult, but we’re here to help. Contact us today to schedule your free consultation.