Many people panic when they receive an IRS notice about unpaid taxes. They may fear that the government will take their entire paycheck, leaving them with nothing. The truth is that the IRS does have significant power to garnish your wages, but there are limits on how much it can take.
If you are dealing with wage garnishment or worried you might face one soon, our New York tax attorneys at Thorgood Law Firm can help you understand your rights and options. Call us for a free consultation, and let us explain how you can protect your income.
What Is IRS Wage Garnishment?
Wage garnishment is a process in which the IRS requires your employer to withhold a portion of your paycheck to pay off your tax debt. The amount taken depends on how much you owe, how many dependents you have, and what your filing status is.
Unlike some private creditors who must follow strict percentage limits, the IRS can take a larger chunk of your wages once it has completed its notice process. Still, it cannot leave you without the basic means to cover your day-to-day living expenses. The IRS calculates an exempt amount that remains off-limits. Beyond that amount, it can claim the rest until your debt is paid.
Garnishment does not happen overnight. The IRS must send you a series of notices, eventually including a Final Notice of Intent to Levy. You then have 30 days to respond or request a hearing. If you ignore these notices or fail to arrange a solution, the IRS will move forward with garnishing your wages. Although the powers of the IRS can feel overwhelming, keep in mind that they follow rules set by law. By acting quickly and possibly negotiating a payment plan or offering evidence of financial hardship, you may avoid having your wages garnished entirely.
Will You Know Before Your Wages Are Garnished?
The IRS is required to send a series of notices before garnishing your wages. These letters typically start with an initial demand for payment and can escalate if you do not respond. Eventually, you will receive a Final Notice of Intent to Levy. If you still do nothing, the IRS will issue a levy to your employer, who must then withhold part of your paycheck. At that point, it might feel too late to stop it, although you can still reach out for legal help.
When your employer receives the levy notice, they are required to inform you about the garnishment. The sudden reduction in your paycheck can be alarming. Some people do not realize they are in serious trouble until they see a smaller deposit in their bank account.
If you find out that you missed previous IRS letters, perhaps because you moved or did not open your mail, you might have fewer opportunities to prevent the garnishment. Thankfully, you can still contact our New York tax attorneys at Thorgood Law Firm for assistance. There may be steps we can take to reduce or remove the levy if you act quickly.
How Can You Stop Wage Garnishment?
Stopping a garnishment typically requires you to address the underlying tax debt. The simplest way is to pay off what you owe in full, though that is not always possible. Another common route is setting up a payment plan or installment agreement with the IRS. By agreeing to pay a set amount each month, you can show the IRS you are serious about settling your debt. Once you finalize that plan, the IRS usually releases the levy on your wages.
If paying even through a plan is too hard, you could look into an offer in compromise, which allows you to settle your tax debt for less than the full amount. You have to qualify by showing you cannot pay the entire sum.
Another option, if you believe your finances are in disarray, is to prove that the garnishment causes a severe hardship. You would need to document your monthly income and expenses, showing that you cannot live if the levy remains in place. If the IRS agrees, it might temporarily suspend collection efforts or move to a lower monthly payment.
Do You Need a Lawyer to Deal With Wage Garnishment?
Having an attorney can make a major difference when the IRS is involved. Tax law can be confusing, and even small mistakes in paperwork or communication can cost you money. An attorney can check that the IRS followed proper procedures and can argue on your behalf if the garnishment is too high. You can also feel more confident that you are not missing a deadline or misunderstanding a notice.
Our New York tax attorneys handle wage garnishments, installment agreements, and other tax collection matters. We know how to work with the IRS to find common ground, often avoiding the worst-case scenario. If you have already had your wages garnished, we can still seek ways to lower or remove the levy. By contacting us early, you may stop the garnishment before it begins or reduce the damage if it is already in place.
Contact Our New York Tax Attorneys
If you are worried about the IRS taking your wages, do not wait. Early action is often the key to preventing wage garnishment or at least limiting its impact. Our New York tax attorneys at Thorgood Law Firm understand the pressure you are feeling. We can talk you through the IRS rules, help you explore payment or settlement options, and represent you if you have already been hit with a garnishment.We are located at 100 Park Avenue, 16th Floor, New York, NY 10017. We represent taxpayers in New York and across the country. Call us at (212) 490-0704 or contact us online. You will speak directly with a lawyer who can guide you toward a solution. By working with an attorney who knows how the IRS collects debts, you stand a better chance of keeping more of your paycheck and finding a path to resolve your back taxes for good.
