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Originally Posted On: https://advancedtaxteam.com/how-to-stop-irs-wage-garnishment/

 

How to Stop IRS Wage Garnishment

If you can’t pay your tax debt, the IRS will garnish your wages, which can cause financial stress. Here are some ways to stop IRS wage garnishment.

Keyword(s): irs wage garnishment

Wage garnishment. It can be a severe punishment if you fall behind on your bills or, worse, are in debt. This is usually an extreme step to make sure that the IRS gets the money that they are owed.

So, how much can they take from you? The answer is that they can garnish up to 60% of your wages.

IRS wage garnishment can disrupt your life and make it a lot more difficult. Even if that is after taxes, you may not know how you are going to save any money or keep up with your bills.

If you are in this position, then you need to figure out how to put a stop to it. This guide will explain what exactly wage garnishment is and how you can get around it.

What Is IRS Wage Garnishment?

A wage garnishment is when the federal government alerts your employer that you owe a debt that you have not been paying off. This can be anything from child support to alimony, back taxes, general debt, and more.

The IRS sees that you have not been keeping up with these payments willfully. So, what they do in this situation is take the money that you owe the other party straight from your wages.

How much is taken depends on what your filing status is, how much you are making, and if you have another spouse and children? All of these are considerations that can increase or decrease the percentage of payments that you have to make.

The highest percentage in this situation is typically people that make above minimum wage and have no other dependents.

If you fit that financial bill and do not have another spouse or child, then you are going to have 60% of your wages garnished. On top of this, another 5% could be added on if you have had this for more than 12 weeks.

How Can You Stop It?

Generally, once the IRS starts garnishing your wages, it can be very difficult to get them to stop. However, there are a few circumstances where you can perhaps get out of this arrangement.

Financial Hardship

One solution that you could have here is to prove that it is a financial hardship. This is because when it comes to wage garnishment, the IRS can only take money out of your paycheck if you are making a certain amount of money.

In the above example, we stated that 60% of your wages could be taken if you make well above minimum wage. However, this is not always the case.

One way that you can get out of this is by only making minimum wage. So, let’s say that you make $217.50 per week with minimum wage. In that situation, the IRS does not have a legal right to garnish any of your wages because you do not make enough money to support yourself.

This is in contrast to if you work a few more hours per week and end up making around $290. In that situation, you would have to cough up a maximum of 25% of your paycheck for garnishment.

If you can prove that this would cause extreme financial hardship for you and your household, the IRS may even be kind enough to grant you a financial hardship exemption and forgive your debt.

Payment Plan

The next thing that you can do is propose a payment plan to the IRS. However, a payment plan needs to be realistic, and you have to follow it.

The reason why the IRS garnishes your wages is that you have not demonstrated a willful and consistent effort to pay your debt. Proposing a payment plan can at least be a good alternative to the current arrangement of taking the money straight from your wages.

Along with this, it can make your life easier by paying off your debt on your terms.

Negotiate Your Debt

One option that you have if you feel overwhelmed by your debt is to try to negotiate the amount that you owe. This can do two things for you.

The first thing is that it pauses your wage garnishment while your proposal is under review. That can buy you some time to get things in order while you make your case.

The second thing this does is it can reduce the debt that you have to pay off. Let’s face it, if your debt has reached the point of wage garnishment, then the people that you owe this debt to most likely believe that you do not have the financial capability to pay this debt off.

What this means is that they could be more likely to take a smaller amount just to get something out of this mess.

File Bankruptcy

Finally, if you have exhausted all other options, something that you can do to stop wage garnishment is to file for bankruptcy.

However, this is only recommended if you feel like there is nothing else that you can do to clear it. The reason is that bankruptcy is not something that you can do an unlimited amount of times, and once you do it, you lose all of your assets.

Get Help With This

These are just a few of the options that you have to stop IRS wage garnishment if this is something that is happening to you. Whether you want to negotiate debt, prove financial hardship, or file bankruptcy, you do have options to get out of this.

Do you need some assistance to tackle this? Message us today to get started.