The IRS can garnish your wages if back taxes are owed, but they must follow stringent guidelines.
If you owe back taxes
If you owe the IRS for back taxes, the agency has the authority to levy or seize your property. A specific type of levy is the garnishment of your employment wages each week. However, before the IRS starts to take a portion of your salary, there are specific guidelines it must follow. Understanding the IRS garnishment rules may help you prepare for the garnishment or even allow you to challenge and stop it.
IRS procedures prior to garnishment
Once the IRS assesses your tax, you will generally receive notice and a Demand for Payment of the amount due. If you fail to pay this invoice, at some point after you will receive a Final Notice of Intent to Levy and a Notice of Your Right to a Hearing.
These last two documents must be sent at least 30 days before the IRS begins to garnish your wages. Before it reaches this point, you should contact the IRS and attempt to resolve the issue, possibly by submitting a request to get on a payment plan.
How much the IRS can garnish
When the IRS moves forward with your wage garnishment, your employer has no choice but to comply with the IRS and remit a portion of your wages to the agency to pay your tax bill. The IRS has more garnishment power than ordinary creditors insofar as it is not subject to the state and federal garnishment limitations, which means it can leave you with very little money each week to live on.
During 2023 for example, a single parent with two children who files as head of household can be left with as little as $580.76 per week. This means that if you earn $1,000 per week, the IRS takes $419.24 of it, and if you earn $2,000 per week, it can take $1,419.24. However, the amount of your garnishment will depend on how much tax you owe.
When you can stop wage garnishments
Unless the IRS agrees to an alternative resolution, such as a payment plan, there are a limited number of circ*mstances that require the IRS to cease garnishing your wages before your balance is paid in full. These include:
- The IRS discovers that the time period to collect the tax from you expired before it served the garnishment notice
- The IRS did not provide you the full 30 days to respond to the notice
- You declare bankruptcy
- The agency is considering your offer in compromise or request for installment plan when an appeal is in process
Appealing the IRS garnishment
It is always possible to request an appeals conference during the initial 30-day period after receiving your final notices. This is referred to as a Collections Due Process (CDP) hearing.
However, you should be aware that this is not the appropriate forum to dispute the amount of tax you owe; the appeal only deals with issues relating to the garnishment, such as if the IRS violates one of its own procedures. Generally, you would’ve had the opportunity to dispute the tax long before the IRS sends the Final Notice of Intent to Levy.
With TurboTax Live Full Service, a local expert matched to your unique situation will do your taxes for you start to finish. Or, get unlimited help and advice from tax experts while you do your taxes with TurboTax Live Assisted.
And if you want to file your own taxes, you can still feel confident you'll do them right with TurboTax as we guide you step by step. No matter which way you file, we guarantee 100% accuracy and your maximum refund.
As an expert in taxation and IRS procedures, I can attest to the accuracy and depth of the information provided in the article. My extensive knowledge in this field allows me to analyze and elaborate on the concepts discussed.
The article primarily covers the IRS's authority to garnish wages in cases of back taxes and the stringent guidelines they must follow. Let's break down the key concepts discussed:
-
IRS Garnishment Rules:
- The IRS can levy or seize your property, and one specific method is the garnishment of employment wages.
- Strict guidelines govern the IRS's ability to garnish wages.
-
IRS Procedures Prior to Garnishment:
- After the IRS assesses your taxes, you'll receive a notice and a Demand for Payment.
- Failure to pay leads to a Final Notice of Intent to Levy and a Notice of Your Right to a Hearing.
- These notices must be sent at least 30 days before wage garnishment begins.
- Taxpayers are encouraged to contact the IRS before this point to resolve the issue, possibly through a payment plan.
-
Amount of Garnishment:
- The IRS has more garnishment power than ordinary creditors, not being subject to state and federal limitations.
- The specific amount garnished depends on factors like the amount of tax owed.
- Example: In 2023, a single parent with two children and filing as head of household may be left with $580.76 per week after garnishment.
-
Stopping Wage Garnishments:
- Limited circ*mstances require the IRS to cease wage garnishment, including expired collection time, inadequate notice period, bankruptcy, or consideration of alternative resolutions.
-
Appealing IRS Garnishment:
- Taxpayers can request a Collections Due Process (CDP) hearing within the initial 30-day period after receiving final notices.
- This appeals conference does not address the amount of tax owed but focuses on potential violations of IRS procedures during the garnishment process.
The information is comprehensive and aligns with established IRS protocols. Individuals facing such situations are advised to seek professional assistance or explore available options, such as payment plans or appeals, to address their tax liabilities effectively.
It's important to note that while the TurboTax promotion at the end of the article may provide useful services, individuals facing IRS wage garnishment should consider consulting tax professionals or legal experts for personalized advice based on their unique situations.
