A wage garnishment (also known as a ‘wage levy’) is one of the nastier powers the IRS or state tax boards have to recoup back taxes. The wage garnishment is where the tax authorities order your employer to take money directly from your income and pay it to them instead of you. Here we will look at how to stop a wage levy.
- Don’t let it happen in the first place!
It may seem obvious but the wage garnishment is only done when you have hidden your head in the sand like an ostrich and not responded to communications from the IRS or state tax boards in the first place. You will have had at least two letters from the IRS by the time the wage levy is enacted, with the second being a notice informing you of the intention to do so.
The IRS only goes through the time and expense of a wage levy if you have refused to negotiate with it. It is far cheaper for them and less stressful (and cheaper too) for you to engage with them from the outset.
Where you are in tax debt it pays to deal with the tax authorities as soon as you know you cannot meet their demands. They will generally help you out and set up a repayment plan.
As part of this you should have filed all your late tax returns, even for several years back, as the IRS won’t meet you at the table until you have done so.
- Respond quickly to the notice informing you of the wage levy
This action will lead to the garnishment being stopped after you have negotiated a repayment plan or pay off the debt.
- Pay the tax debt
If you have the capital or resources to repay the tax debt, be it in a valuable but disposable possession or in cash in a savings account then you could just write a check to the IRS and the wage garnishment will be stopped on you paying the bill.
- Respond to the employer’s letter
After ignoring the letter from the IRS you will receive a letter from your employer asking for details of your dependents. It is essential that you respond to this as if you do not the IRS will automatically assume you are a single householder and maximize the amount of money it can take from your income.
This link is to an IRS document showing the amount of money that the IRS is legally mandated to allow per dependent in your household. If you are married and filing a joint statement, and have two children, the document shows that your dependents will add nearly $3,000 to the amount the IRS has to leave behind in your account every month, which in itself can be no more than 25% of your income after a range of other legally mandated living expenses.
- Hire a tax debt attorney
As tax debt attorneys we at Defense Tax would say that, wouldn’t we?! The fact is the US tax code is so complicated – running to 70,000 pages – that you’re not going to be able to confidently negotiate your way out of your tax debt without someone who knows the environment.
As a company, we have decades of experience between our attorneys in dealing with the IRS and state tax boards over issues like this. One of the defenses we can put forward in challenging a wage levy is that it will put you in an undue hardship. In some cases, we can get your tax debt almost written off with an offer in compromise.
As part of the deal, we will also seek to help you put your tax affairs into a position where you can manage your tax debt and still continue to live life without penny-pinching too much.
Contact Defense Tax Today!
Having a tax expert on your team can save you lots of time and worry in dealing with your tax debt. That’s why you should come to us at Defense Tax to discuss your situation and allow us to negotiate on your behalf with the IRS or state tax board. Fill out our free consultation form and get in contact with us today!