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 and stop wage garnishments. If you receive a notice that you owe taxes, take action immediately.
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 a financial hardship.
When filing your taxes, if you can pay part of what you owe, you may be able to set up a payment plan with the IRS for the remaining balance. 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 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 tax attorney who is familiar with and understands the IRS and their methods of dealing with an Offer in Compromise is your best bet.
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.
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 of 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.
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 wage garnishment professional tax attorney. 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 for you to take to resolve your tax problem. Professional tax attorneys may use a combination of strategies to stop the 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.