IRS Wage Garnishment

What is IRS Wage Garnishment?

When you owe the IRS money and fail to pay it, they will initiate collection actions against you. IRS wage garnishment, also known as a wage levy, is one method they employ to satisfy your tax debt. Wage garnishment allows the IRS will seize part of your wages each pay period until your tax debt is paid in full. Unlike other creditors, however, the IRS does not need a court order to garnish your wages.

Notification of IRS Wage Garnishment

You will not receive notification of an IRS wage garnishment until it happens. This is because the IRS sends the wage garnishment notice to your employer. The IRS will mail the wage levy and the IRS wage garnishment table to your employer, letting them know exactly how much to take from your check. Your employer will give you a form (Statement of Dependents and Filing Status) to complete and return within three days. If you don’t return the form in time, your exempt amount is figured as if you are married filing separately with no dependents.

Wage Garnishment Amount

It is not uncommon for the IRS to take up to 70% of your paycheck. The exact amount that you can keep, however, is determined by your filing status and the number of dependents. If you have more than one employer, the IRS may allocate the exemptions to one income source and levy 100% of the income from the other employer. Regardless of how much is garnished from your paycheck, you will still be responsible for paying income taxes on the full amount earned.

Accounts Receivable Levy

An accounts receivable (AR) levy is generally used by the IRS to pay off back taxes owed by those who are self-employed. Unlike wage garnishment, where only a percentage of the paycheck is taken, an AR levy can take the entire check due (up to the amount of taxes owed). It is a one-time occurrence, but the IRS can manually request it over and over again until the debt is paid in full.

How to Stop IRS Wage Garnishment

IRS wage garnishment is a serious matter. It can leave you with little income to live on, as well as potentially jeopardize your employment opportunities. There are, however, a few ways you can stop the IRS from taking your paycheck.

Pay the tax debt in full
Once your back taxes are paid off, the wage garnishment will end.
Enter Into a payment plan
If you owe less than $50,000, you may be able to set up a payment plan with the IRS.
Submit an Offer in Compromise
This allows you to negotiate with the IRS and pay less than you owe.
Claim financial hardship
If you can’t pay anything toward your tax debt, the IRS may deem you as “currently not collectible”, and stop garnishing your wages.

If you are at risk of losing your paycheck due to IRS wage garnishment, contact Tax Defense Network. Our tax professionals have decades of experience helping taxpayers, just like you, get out of tax debt. Schedule a free consultation today and take back your paycheck!

Tax Defense Network

“Right off the bat, [Tax Defense Network] made me feel very comfortable. I was just looking for a solution that would allow me to pay off what I owed without the IRS garnishing my paycheck every week. I tried for months to speak with someone at the IRS, and it was literally impossible.
TDN kept me informed every step of the way. They were able to contact the IRS, set up a payment plan, and stop my check from being garnished in a few weeks’ time. I had been trying to accomplish that for almost 6 months. It was worth it for the peace of mind. I would highly recommend TDN to my family and friends…and complete strangers.”

— John F.

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Common Questions About IRS Wage Garnishment

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