What is an IRS Wage Garnishment?

Jessica Ellis

United States taxpayers who are delinquent on tax payments may find themselves at the mercy the Internal Revenue Service (IRS). This organization, as an arm of the US Government, has a variety of tools available that allow them to extract payments. IRS wage garnishment is one of the most common means for the tax agency to ensure that payments are made against a tax debt; it is most frequently used for debtors that have regular salaries.

The Internal Revenue Service logo.
The Internal Revenue Service logo.

An IRS wage garnishment requires that a portion of each paycheck is deducted by the employer and sent to the IRS. This method ensures that the debtor cannot hide earnings, as the employer is legally responsible for overseeing the deduction. The amount of the garnishment may depend on several factors, including total income and an allowed amount for living expenses. The limits on IRS wage garnishment are quite high, and the amount left over for living expenses is based on a national average rather than personal circumstances, which may leave a debtor with far less money than is necessary for his or her lifestyle.

There are rules guiding an IRS wage garnishment. First, the government must send a notification to the debtor that a garnishment will occur if tax debts are not repaid. This often comprises two notices: an initial request for payment and a final notice that begins the garnishment process. Usually, the IRS is willing to work out a monthly payment plan if a person cannot pay the full amount owed at once; garnishment is usually only undertaken if the debtor will not or cannot pay any amount toward the debt.

The best way to avoid an IRS wage garnishment is to pay taxes yearly and on time. Garnishment usually only becomes an issue when a debtor refuses to deal with taxes owed over a period of years. Hiding from a tax debt is only going to increase the chance of garnishment in the future; since the IRS is usually amenable to working out payment structures, it may be wise to talk with an IRS agent as soon as a debt begins to look unmanageable.

In addition to IRS wage garnishment, the IRS has the right to seize property in order to pay off a tax debt, including real estate, personal possessions, retirement accounts, and automobiles. In some cases, seizure may be done as an alternative to garnishment, but in truly high-debt cases, both seizure and garnishment may be employed. Unless a clear accounting mistake can be proven on the part of the IRS, there is usually no legal way out of paying a tax debt or being subject to garnishment.

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