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IRS Wage Garnishment

The Internal Revenue Service (IRS) is responsible for collecting taxes owed to the government. If you owe back taxes and have not made arrangements to pay, the IRS has the authority to garnish your wages. A wage garnishment is a legal procedure in which the IRS can collect unpaid taxes directly from your paycheck. This can have a significant impact on your financial situation, making it difficult to pay for basic necessities. However, a tax lawyer can help you navigate the process and protect your rights.

What is IRS wage garnishment?

Wage garnishment is a legal process in which a creditor or government agency can collect unpaid debts directly from your paycheck. In the case of the IRS, if you owe back taxes and have not made arrangements to pay, they can garnish your wages. This means that the IRS can take a portion of your earnings before you receive your paycheck. The amount they can take depends on your income and other factors, but it can be up to 25% to 50% of your disposable income.

How does IRS wage garnishment work?

If the IRS determines that you owe back taxes and have not made arrangements to pay, they will notify you. Here are the notices, in order, prior to your wages being garnished. 

  • A demand for payment (form CP14, form CP501, or form CP503)
  • A notice of intent to levy (form CP504)
  • A notice of your right to a hearing for due process collection (LT11/Letter 1058), which will be sent via certified mail

The notice of intent to levy (form CP504) gives you 30 days to either pay the amount owed or make arrangements to pay. If you do not respond or make arrangements, the IRS can start the wage garnishment process.

The LT11/Letter 1058 contains details on how to request a hearing to either challenge the IRS’ claim that you owe unpaid taxes or to seek a payment agreement. It’s necessary to request the hearing within 30 days of receiving the notice to avoid wage garnishment, which usually happens about two weeks after this deadline.

How will my employer know about the IRS wage garnishment?

The IRS notifies your employer of a wage garnishment by sending them a wage levy notice. This notice instructs your employer to withhold a portion of your wages and send it directly to the IRS to satisfy your unpaid tax debt. The notice will typically include details about the amount to be withheld, the duration of the wage garnishment, and instructions for remitting payments to the IRS. Once your employer receives the wage levy notice, they are legally required to comply with the instructions outlined in the notice. They are also legally required to notify you of the wage garnishment.

How can a tax lawyer help?

A tax lawyer can help you navigate the wage garnishment process and protect your rights. Here are some of the ways a tax lawyer can help:

  1. Negotiate with the IRS

A tax lawyer can negotiate with the IRS on your behalf to reach a payment arrangement that works for you. They can help you explore options such as an installment agreement, an offer in compromise, or a hardship status.

  1. Appeal the wage garnishment

If you are facing wage garnishment, a tax lawyer can help you stop the process. They can file an appeal or request a hearing to challenge the IRS’s decision to garnish your wages. They can also help you explore options such as bankruptcy or an IRS hardship status.

  1. Protect your rights

A tax lawyer can protect your rights during the wage garnishment process. They can ensure that the IRS is following all the proper procedures and that you are not being unfairly targeted. They can also help you understand your legal rights and option

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