The IRS has strict wage garnishment laws to enforce debt collection on unpaid taxes, no matter whether we talk about Texas or any other state. Wage garnishments occur when you have an outstanding tax debt owed to the IRS and any other means of collecting the debt have not been achieved. Your employer receives a written notice from the IRS requesting a portion of your wages to satisfy your outstanding tax bill. By law, your employer must obey this request. There are ways to avoid or stop wage garnishments. If you receive a notice that you owe taxes,instead of wondering how much you have to owe before the IRS garnishes your wages, take action immediately.
The Wage Garnishment Process: How Long Does the IRS Wait to Garnish Wages?
There are a lot of questions in the minds of defaulting taxpayers about wage garnishment. For instance, people ask, ‘How do I find out if the IRS is garnishing my wages?’ and ‘Does the employer have to notify the employee of garnishment?’. The IRS gives taxpayers enough time and opportunities to honor their obligations before it levies wage garnishment. The IRS first makes all attempts to contact the taxpayer regarding their unpaid dues using all possible channels. If the taxpayer doesn’t respond, the IRS sends a “Notice of Intent to Levy”. If the taxpayer does not respond to the notice, the IRS forwards the notice to the taxpayer’s employer. As per the IRS rules for garnishment regarding employers, once the employer is notified, the taxpayer has two weeks to respond. If the taxpayer fails to respond again, then the garnishment begins. As to the question pertaining to how much the IRS can garnish your wages, the answer is a complex one. The IRS has in place its own wage garnishment calculator based on factors like the number of dependents you support and your filing status, and even has an exemption table and garnishment limits in place. Instead of picking your brain over the question, it is best to take help from IRS wage garnishment attorneys in Texas.
Busting 5 Common Myths About Wage Garnishment
If you have a notice for IRS wage garnishment, it is better to be prepared for what lies ahead. Here we clear up five common myths about wage garnishment.
1. Myth: “An employer can fire an employee for a wage garnishment levy.”
Fact: If your employer has received a first court notice for levying a wage garnishment against you, the law says the employer cannot fire you. However, if you have more than one wage garnishment levied against you, your employer has the legal right to terminate your employment.
2. Myth: “The government will leave me with enough money to cover my expenses.”
Fact: The law may limit the Government’s ability to deduct 25 percent of your disposable earnings, or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage. It, however, does not guarantee that they will consider your financial expenses during the wage garnishment process. The only funds exempt from garnishment are federal, state, and local taxes, unemployment insurance, state employee retirement system payments, and Social Security payments.
3. Myth: “The government can garnish my wages for only one debt at a time.”
Fact: Do not assume your wage will not be garnished for more than one debt at a time. If you owe money to multiple entities, whether the bank, a creditor, or the IRS, the government can garnish your wages for all of them at the same time. In cases where your wage garnishment is meant for more than one debt, your employer can also legally fire you.
4. Myth: “Only child support and back taxes can be collected through garnishment.”
Fact: Though the most common cases of wage garnishment include child support and back taxes to the IRS, the garnishment is not limited to them. Other types of debts, including alimony, student loans, past-due court fines, and civil monetary judgments, also fall under the umbrella of debts collected through wage garnishment in Texas.
Ways to Avoid and Stop IRS Wage Garnishment in Texas
Of course, the most sensible way to avoid wage garnishments is to file your taxes on time and pay the taxes you owe. However, that is not always feasible when you cannot afford to pay them or face financial hardship. Even after the process of wage garnishment has begun, there might still be some time for redemption. You can enter into a tax payment plan or request the IRS delay the collection of taxes. Here are some of the ways you can avoid and stop a wage garnishment.
File an Extension
If you need more time to file your taxes, you can request an extension from the IRS. If granted, this will extend your filing time by six months, which will give you more time to save money to pay your taxes. There are several options for making tax payments on the IRS website. That being said, it is never a good idea to attempt a negotiation with the IRS on your own. Request the help of a professional tax attorney. The attorney will handle all correspondence and communication with the IRS while protecting your wages.
You can stop wage garnishment by entering into an installment agreement and paying your dues in affordable monthly installments. In fact, if you pay the full amount due, you can reduce or even completely get rid of the interest accrued and/or the penalties linked to your unpaid dues.
Offer in Compromise
You may also be able to settle your tax debt for less than the full amount owed. This is known as an Offer in Compromise, and you must meet certain criteria to qualify. Your ability to pay, income, expenses, and asset equity are all considered and must meet the IRS standards to qualify. Not everyone is eligible for an Offer in Compromise. You can use the Offer in Compromise Pre-Qualifier Tool to see if you qualify. As noted, this tool should only be used as a guide and never as a final answer. A booklet is then sent to you containing forms that need to be filled out as a Preliminary Proposal. IRS forms and codes are very confusing. A professional wage garnishment lawyer who is familiar with and understands the IRS and their methods of dealing with an Offer in Compromise is your best bet.
If a taxpayer changes jobs, the wage garnishment process comes to a halt, which is why some people temporarily quit their jobs and rejoin after some time. A job change, however, is a temporary solution. Although it takes some time to discover that a taxpayer has rejoined, but as soon as it does, it reinitiates the wage garnishment process.
Currently Non-Collectible Status
If you are unable to pay any amount of your tax debt, there is another method. You can also avoid wage garnishment by requesting a temporary delay in the collection process. This does not erase the debt. It only means the IRS has reached the determination that you cannot afford to pay at this time. You may be asked to file a Collection Information Statement as well as submit proof of your financial status. If this temporary delay is granted, you will still incur penalties and interest on the amount of taxes you owe. Also, the IRS may file a Notice of Federal Tax Lien to protect the government’s interest in your assets. You will still be liable to pay the dues at a later date when you are in a position to do so. Read More
The Best Course of Action
There are other options, such as filing an appeal or filing bankruptcy, neither of which should be individually filed. The absolute best option is to hire a professional wage garnishment tax lawyer. A tax attorney with in-depth knowledge of the IRS, laws, codes, and wage garnishments can analyze your financial and tax situation and advise the best route to take to resolve your tax problem. Professional tax attorneys may use a combination of strategies to stop wage garnishment, depending on each individual’s situation.
Wage garnishment is not to be taken lightly. The majority of people cannot afford to lose any of their wages. Thus, time is of the essence. If you receive a notice of intent that the IRS is going to garnish your wages, take prompt action and contact a reputable, professional tax attorney who can guide you through this situation and reach an amicable resolution between you and the IRS.
Facing Wage Garnishment? We Can Help!
If you are unable to pay the debt owed to the bank, a creditor, or the IRS, we can help you find your way out of the problem. Speak with our experienced attorneys, who are well-versed in wage garnishment laws in Texas, to help you get out of the situation with the minimum damage to your finances, reputation, and future. To schedule a no-obligation, free consultation, fill out our contact form or simply call (972) 426-2991.