The IRS garnishing wages will have the IRS legally seizing any income you make to satisfy federal tax debt or income taxes owed.
With the IRS garnishing wages for an income tax debt that you owe, or use any other legal means to enforce payment of the taxes that you owe, it will first send you a written notice that sets out the amounts that you owe, including the tax, penalties, and interest.
The law places limits on the amount that a regular creditor can garnish from your wages. However, these normal limits do not apply to the IRS garnishing wages. The tax code requires the IRS to leave you with a certain amount of income after garnishing your wages to pay your income tax debt. The tax code contains a table that corresponds to the number of exemptions that you claim for tax purposes, and sets forth the amount that is necessary for you and your family to pay for basic living necessities. Unfortunately, an IRS wage garnishment can amount to 70% or more of your income.
There are a number of different ways in which you can resolve your problem with the IRS. To stop an IRS wage garnishment, you must get back into good standing with the IRS, either by paying your balance in full or entering into a tax payment plan or some other type of resolution.
The IRS will stop a wage garnishment if you enter into an approved installment agreement to pay your tax debt in full over a series of monthly payment installments. As long as you can make the monthly payments and pay off the debt before the debt becomes uncollectable by the IRS, your installment agreement is likely to be accepted by the IRS.
In some cases, you may be able to settle your income tax debt with the IRS for much less than the total amount that you actually owe, based on your current financial situation. This is a fairly selective program and you have to financially qualify. If the IRS garnishing wages gets you motivated, you may qualify for this type of relief, and your IRS wage garnishment will stop while your case is being reviewed.
If you can prove an IRS wage garnishment or other collection action would prevent you from meeting the basic needs of you and your family, then the IRS may temporarily cease its collections efforts for months and even years. You must show that collection of the tax debt would be unfair because your financial circumstances are so bad. The IRS will require financials.
If you disagree with the IRS garnishing wages in any way, you can file an appeal, even if it has been more than 30 days since you received the notice of intent to levy.