If you owe back taxes to the IRS, they have the legal authority to take action against you to collect the debt. One such action is wage garnishment, where a portion of your paycheck is withheld and sent directly to the IRS to pay off your tax debt. This can be a stressful and frustrating experience, leaving you with less money to cover your basic needs. However, there are steps you can take to stop wage garnishment by the IRS and regain control of your finances. In this guide, we will outline the options available to you and provide tips on how to navigate the process successfully.

What is Wage Garnishment?

Wage garnishment is a legal process that allows the IRS to collect a portion of your wages directly from your employer. If you owe back taxes, the IRS can send a notice to your employer requiring them to withhold a certain amount from your paycheck and send it directly to the IRS until your tax debt is paid off. 

The amount that can be garnished depends on your income and the number of exemptions you claim on your tax return. Generally, the IRS can garnish up to 25% of your disposable income or the amount by which your weekly income exceeds 30 times the minimum wage, whichever is less.

How to Stop Wage Garnishment by the IRS

There are several options available to stop wage garnishment by the IRS. Here are some of the most common:

1. Negotiate a Payment Plan

One way to stop wage garnishment is to negotiate a payment plan with the IRS. This involves working with the IRS to come up with a plan to pay off your tax debt over some time. This can be done through an installment agreement, where you make monthly payments until your debt is paid off. In some cases, the IRS may also agree to a partial payment installment agreement, where you pay a reduced amount over a longer period. It is important to note that interest and penalties will continue to accrue during this time, so it is important to pay off your debt as soon as possible.

2. Offer in Compromise

Another option to stop wage garnishment is to make an offer in compromise to the IRS. This is a settlement agreement where you offer to pay a reduced amount to settle your tax debt. This option is only available in certain circumstances, such as if you are unable to pay your tax debt in full or if paying the full amount would cause undue hardship. The IRS will consider factors such as your income, expenses, and assets when determining whether to accept your offer.

3. File for Bankruptcy

In some cases, filing for bankruptcy may be a viable option to stop wage garnishment by the IRS. Bankruptcy can provide immediate relief from wage garnishment, as well as other forms of debt collection. However, it is important to note that not all tax debts can be discharged through bankruptcy, and there may be long-term consequences to filing for bankruptcy.

4. Seek Legal Help

If you are facing wage garnishment by the IRS, it may be helpful to seek legal help. A tax attorney or other tax professional can help you navigate the process and determine the best course of action for your situation. They can also help you negotiate with the IRS and ensure that your rights are protected.

Tips for Navigating the Process

– Keep accurate records of all communication with the IRS, including phone calls and letters.

– Be prepared to provide detailed financial information, including income, expenses, and assets, to support your case.

– Consider seeking the help of a tax professional or attorney who can guide you through the process and represent you at a CDP hearing.

– Act quickly to address the issue, as wage garnishment can severely impact your financial stability and credit score.

Conclusion

Wage garnishment by the IRS can be a stressful and overwhelming experience for anyone who is struggling with tax debt. However, there are several steps that you can take to stop wage garnishment and resolve your tax issues with the IRS. It is important to seek professional guidance and explore your options, such as setting up a payment plan or negotiating a settlement with the IRS. 

By taking proactive steps and addressing your tax debt head-on, you can avoid further financial hardship and regain control of your finances. Remember, with patience and persistence, you can overcome wage garnishment and move towards a more stable financial future.

If you are looking for a tax attorney in Long Island, contact the Law Offices of Stephen B. Cass, P.C. We are a New York law firm and CPA firm providing tax settlements, IRS litigation/negotiations, and business bankruptcy services. Let us help you navigate the complicated waters of wage garnishment today.