When you’re in trouble with the IRS and dealing with insurmountable debt, it can have a direct impact on your paycheck. Nobody wants to see their hard-earned money taken away from them before it ever hits their bank account, but it happens to millions of Americans every day.
When the IRS takes this step, it’s because they’ve tried other means of collection and found them unsuccessful. They begin taking money directly from your paycheck, which can leave you struggling to make ends meet. It’s crucial to address the situation quickly and strategically.
Federal Guidelines Limit Wage Garnishment
Before diving into how you should respond, it’s important to understand that there are limits to how much the IRS can take from your paycheck. While they have the power to garnish wages to collect back taxes or other debts, they aren’t allowed to take everything—they must leave enough for you to provide for yourself and any dependents. Federal and state laws restrict the amount that can be garnished, ensuring that you are left with enough income to cover basic living expenses.
The IRS is required to send you at least two notices before garnishment begins, both of which must be delivered within 30 days. These notices will explain the amount to be garnished and how it was calculated. It’s important to note that the exemption amount varies based on the type of debt, your filing status, and the state in which you live.
In Washington, garnishment for consumer debts such as credit cards, unpaid rent, or medical bills, cannot exceed 80% of your disposable income or 35 times the current state minimum wage ($16.28 per hour as of this writing), whichever is higher. For other debts, like back taxes, the limit is 75% of your disposable income or 35 times the federal minimum wage ($7.25 per hour).
If your paycheck is being garnished at a rate higher than this, it’s important to act quickly. You should verify your filing status and accurately fill out the necessary paperwork to avoid losing more of your paycheck than is allowed under the law. Inaccurate filings or paperwork errors can lead to more garnishment than necessary, further straining your finances. Ensuring your documents are correctly filed is one way to prevent further loss.
Appeal IRS Wage Garnishment
You can request a Collections Due Process (CDP) hearing within 30 days after receiving your final notices from the IRS. This appeal allows you to challenge the wage garnishment process if the IRS has violated its procedures. However, it’s important to note that this hearing doesn’t address disputes about the amount of tax owed—you should have already received opportunities to contest your tax liability before the IRS issues a Final Notice of Intent to Levy.
Mitigate and Solve Your Tax Debts
Addressing wage garnishment starts with solving your underlying tax debts. While paying off the debt is the most straightforward solution, it’s likely that if your wages are already being garnished, you don’t have the financial resources to do so all at once. Fortunately, there are several strategies to mitigate your tax debt and resolve the situation:
- Negotiating a Debt Settlement
- Offer-in-Compromise
- Bankruptcy
- Installment Agreements
- Penalty Abatement
Hire a Washington Tax Dispute Resolution Attorney
Wage garnishment by the IRS is a serious matter, but it’s one you don’t have to handle alone. A Washington tax dispute resolution attorney can guide you through your options, helping you resolve your tax issues and stop garnishment. At Robert V. Boeshaar, Attorney at Law, we specialize in helping clients get out of trouble with the IRS. Contact us today to discuss your case and explore the options that work best for your situation.
Robert V. Boeshaar Attorney at Law, LL.M.,PLLC
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