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How can an IRS wage garnishment be STOPPED?
A wage garnishment is legal procedure by which the IRS seizes a taxpayer’s income directly from the taxpayer’s employer. Wage garnishments occur only against W-2 wage earners and are continuous in effect. Therefore the IRS does not have to re-issue a wage levy in order garnish every paycheck of an employee. wage garnishment usually takes up to 85% of an employee’s paycheck. Self employed people (who earn 1099s) can also be levied, however the IRS is required to re-issue a levy notice prior to every single payment of income for self employed people.
What can we do now?
IRS wage garnishments can literally lead to life and death situations for taxpayers. The IRS can seize so much money out of a taxpayer’s paycheck that a taxpayer may not be able to pay for housing, food, transportation and medication. As such, stopping an IRS wage garnishment is almost always a top priority. In stopping a wage garnishment, there short term fixes and there are long term fixes. In the short term, a taxpayer can have a wage levy stopped by promising to pay the IRS in full with borrowed funds from family, friends or other legitimate sources. Another short term fix can occur when a taxpayer is placed on an installment arrangement with the IRS. The long term solutions for resolving a wage levy include completing missing tax returns, submitting an offer in compromise, enforcing statutes of limitations on the IRS, and filing for bankruptcy. Different types of tax problems will require different types of solutions in resolving a wage garnishment.
How does the IRS wage garnishment process work?
The IRS will not surprise a taxpayer with a wage garnishment. Initially, a taxpayer will receive a notice of past due taxes along with a request for immediate payment. If this notice is ignored and unanswered, a taxpayer will eventually receive a “Final Notice of Intent to Levy”. Usually, after 30 days of the final notice the IRS will issue Form 688-W to a taxpayer’s employer and the garnishment of wages begins. Taxpayers are afforded some exemptions for dependents on Form 668-W, but the allowance is so small that effect of the wage garnishment is still devastating on a taxpayer’s personal financial situation.