The Internal Revenue Service (IRS) is serious business. And if you owe taxes, the IRS can collect by garnishing your wages. The money will come out of your pay until the debt is paid in full or you manage to stop the garnishment.
Difference Between IRS and Other Creditors
A creditor is usually unable to garnish your wages without first suing you in court. The creditor must win the lawsuit or receive a default judgment. Only then can the creditor garnish your wages. But the IRS is different, in that it can start garnishment without a lawsuit or default judgment.
Before Garnishment Begins
You’ll receive a notice before the IRS begins taking your wages. You’ll also have a chance to pay the back taxes that you owe. If you fail to pay, the IRS will send a final notice stating their intent to start garnishment. The notice will also explain your right to dispute the case.
The IRS must give you at least 30 days notice of their intent. If possible, contact the IRS and either pay the debt or request a payment plan.
Loss of Income
Once garnishment begins, your employer is required to send a portion of your wages to the IRS. And the IRS is exempt from federal and state garnishment limitations. That means the agency can legally take more of your income than other creditors are allowed.
For example, Texas law states that 50 percent of your income is the most that a creditor can take. But that doesn’t include the IRS. The amount the IRS takes depends on how much you owe. It can actually leave you with little on which to live. For help understanding IRS Wage Garnishment, Richardson, TX residents might want to seek legal counsel.
IRS Publication 1494 shows how much the IRS must leave for living expenses. The number of tax exemptions you claim determines how much of your income is protected. For example, a single person who claims no exemptions will keep $234.62 of their weekly income. If they make $1000 a week, the IRS can take $765.38 of their wages.
Options for Stopping Garnishment
There are a few instances in which it’s possible to stop an IRS garnishment. For instance, if the IRS didn’t give you at least 30 days notice, then they can’t garnish your wages. Or if the IRS is considering your request for a payment plan, they can’t garnish your wages during the appeal. Bankruptcy is another possible way to stop a garnishment, at least temporarily. Bankruptcy doesn’t erase tax debts, so you’ll still owe after bankruptcy.
When you owe the IRS, they want their money as soon as possible. And they will garnish your wages if they can. The best way to avoid garnishment is to pay your debt or make a payment plan. Contact us today