People who have a tax debt to pay should be very cautious to stop the IRS from garnishing wages. Initially, the IRS notifies the person to pay the tax debt.
When you will not respond to the IRS request, they will start garnishing part of your wages as a continuous levy. In view of this, the IRS contacts your employer and a huge portion of your paycheck will be automatically transferred to tax debt balance.
In this way, you will have to bear financial strain if a quarter or more of your monthly income is deducted by them. But there is no need to worry because you can stop the IRS wage garnishment. The only thing you need to do is to choose a strategy for stopping IRS wage garnishment by minimizing the financial burden. In this blog, we will discuss what is IRS wage garnishment and how to stop it.
What is IRS Wage Garnishment?
IRS wage garnishment is a process through which the IRS collects tax debts from people. Besides this process, there are also some other levies and liens. All those who owe must have complete knowledge about IRS wage garnishment. Actually, the IRS is eligible to seize your income for retrieving tax debt under federal law. Whether you are having a salary, commission, bonus, or wages, the IRS can seize anyone.
Ways to Stop IRS Wage Garnishment
The IRS can seize even larger amounts from your wages as compared to a private creditor, so you should stop the IRS. It has been observed that the IRS can take 70% of your income or all of your income in the case of self-employed. No matter whether you have received a final notice from the IRS Tax Attorney or not, you can prevent your income from being seized. Here are some ways that you can use to stop the IRS from garnishing wages.
One of the ways to stop IRS wage garnishment is through bankruptcy. After claiming or filing bankruptcy, you automatically get a stay to stop the IRS from seizing your income. In fact, bankruptcy stops all the collection actions including foreclosure, repossession, and garnishment. Never ignore this option as it gives a big hit to credit score. But you will not be able to estimate how much tax debt can be discharged. Though it cleans dischargeable debts only, so you have to pay non-dischargeable tax debts even after bankruptcy.
2- Change of Employment
Another simplest and easiest way is to switch off, resign, or change your employer. Being a temporary solution, it’s not the wisest way for stopping the IRS wage garnishment. You might be thinking about how it is a temporary solution. Well! The IRS can find your new employer to seize your income but it will take some time. But when you will be found by the IRS eventually, you will have to pay even higher penalties than you owe.
3- Financial Hardship Exemption
The IRS can exempt you from your owed debt tax if you are facing financial hardships. To exempt yourself from the wage garnishment, you should describe your complete financial situation to the IRS. If they will find that you will be unable to fulfill the basic needs of your family after paying the tax debt, leverage will be stopped on your wages. In this situation, the IRS will start to collect wages after the improvement of your financial situation.
4- Installment Plan
The IRS will allow the debt owner to pay the balance even after the time when you start working on the installment plans. For managing the installment plan, you should engage the IRS for the demonstration that you are unable to pay the complete tax at once. In view of this, there is a need of making monthly installments till the time you pay full debt. Once, the IRS will accept your installment plan, your wages will not be garnished.
5- Appeal for Negotiation
Besides other options, the federal law permits debt owners to appeal to the IRS in the negotiation of the tax debt they owe. If you are looking for negotiation in the debt, you should request an appeal within one month of receiving the final notice from the IRS. After receiving your request, the IRS will notify you about the approval or rejection of your appeal. Feel free to appeal for the negotiation to stop the IRS wage garnishment.
In short, you can stop the IRS from garnishing your wages temporarily or permanently depending upon your situation. Make sure to stop the IRS from seizing your income to avoid a financial crisis.