What to Do if the IRS Garnishes Your Paycheck

The Internal Revenue Service (IRS) is arguably the most powerful creditor you may ever have. While you can declare bankruptcy to clear debts such as credit card bills and unpaid utilities, income tax debt is often non-dischargeable. When you can’t or won’t pay your taxes, the IRS can and will garnish any income you receive to satisfy the debt. This includes:

  • Salary
  • Hourly wages
  • Commissions
  • Bonuses

Unlike other creditors, the IRS doesn’t need to get a judgment against you in order to garnish your wages, and it can take a bigger portion than your old credit card provider ever could. (70% or more of your income is drastic, but not unheard-of.)

So what can you do to avoid or stop wage garnishment? Here are some options that may apply to your situation.

Propose an Installment Agreement

You can stop wage garnishment by entering into an installment agreement to pay your tax debt in full. The IRS will generally accept any monthly payment arrangement that allows you to pay off the debt before it becomes uncollectible.

Make an Offer in Compromise

You may be able to settle your tax debt for less than what you owe via the Offer in Compromise program, which is based on your individual financial situation. The program is a selective one with strict criteria for acceptance, but if you are facing wage garnishment, you may qualify. If a garnishment is already in effect, it will stop temporarily while the IRS reviews your case.

Claim Financial Hardship

The IRS may temporarily cease its collection efforts, even for years, if you can prove that garnishing your paycheck will prevent you from meeting your basic needs. You will have to provide details about your financial situation, but this solution has provided relief for struggling tax debtors.

Request a Reconsideration of the Audit

If you failed to respond to IRS notices because you never received them (e.g. sent to an incorrect address) or you believe that incorrect assumptions went into assessing your tax liability, ask the IRS to reconsider the assessment. This may stop the garnishment while the IRS considers the request.

Claim Innocent Spouse Relief

In general, married couples are responsible for the entire amount owed on a joint tax return, but if the tax debt that triggered the garnishment is based on your spouse’s income, and you are now legally separated or divorced you may be able to qualify for innocent spouse relief.

Report Identity Theft

If you were totally unaware of your tax debt until your employer notified you of the wage garnishment, it’s possible that someone else has stolen your identity. Contact the IRS to inquire and then notify the police immediately. If you are a victim of identity theft, it can stop the deductions from your paycheck.

With so many people living paycheck to paycheck, few things are more alarming than a wage garnishment order that forces you to live with even less. Don’t put yourself in financial jeopardy – contact a Seattle tax attorney.

If you can’t pay your back taxes and the IRS is now garnishing your wages, contact Boeshaar Law or call (206) 899-4860 to explore your options. We can help you negotiate a payment plan or settlement for less than what you owe, so please reach out to us today.

Written by Robert V. Boeshaar

Robert V. Boeshaar

Robert V. Boeshaar is a Seattle tax attorney committed to helping individuals and small businesses who are facing problems with the IRS. He believes in using his experience to serve others and to make a difference in their lives.