The IRS has the ability to garnish or legally seize any income you make to satisfy federal tax debt or taxes owed. Garnished wages can come from hourly wages, salary, commissions and/or bonuses, and the IRS will contact your employer directly to require him/her to send the them a specified portion. Your employer is required by law to comply with the garnishment, which usually can happen within one full pay period within receiving the notification, which is very fast. The IRS also has the power to garnish your wages without a court judgement, and can garnish a greater percentage of your wages than a creditor can.
Before the IRS can garnish your wages, they will mail you a notice of your tax debt that lists the amounts you owe, including the tax, penalties and interest, as well as a due date. If you do not pay the balance in full, which most clients aren’t able to, you can expect to receive a second notice, which is the final notice. If you have still not paid the full balance within 30 days of receiving this final notice, the IRS can move forward with garnishing your wages. Depending on the exemptions you claim for your tax purposes, and what the IRS deems necessary that you and your family need to pay for basic living necessities, they can take up to 70 percent or more of your income.
In order to avoid or stop a wage garnishment, you will need to get back in good standing with the IRS, which can include paying the balance in full or by agreeing to a tax payment plan or other type of resolution. You and your tax specialists may opt to enter into an installment agreement, make an Offer in Compromise, prove the monies are currently uncollectible due to financial hardship, change employers, temporarily quit your job, file bankruptcy or file a tax levy appeal. The best course of action will be what works best for you and your family, and what our tax specialists advise, with an overall goal to help you avoid wage garnishment.
Contact us today to schedule an appointment with a specialist from Creative Tax Solutions.
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