Notice of Wage Garnishment – How to Stop It
Understanding Wage Garnishment
Receiving a notice of wage garnishment from the IRS can be a daunting experience. This procedure allows the IRS to directly take a portion of your wages to satisfy a tax debt. Understanding how this process works and your rights is crucial in effectively managing and resolving the situation.
What Is Wage Garnishment?
Wage garnishment is a legal procedure where a portion of an individual's earnings is withheld by an employer for the payment of a debt. The IRS, unlike other creditors, can begin garnishment without obtaining a court judgment.
According to the IRS, they can garnish wages, withhold other income sources, and seize bank accounts or other property. The IRS relies on the authority granted by Title 26 of the U.S. Code, Section 6331 (https://www.law.cornell.edu/uscode/text/26/6331) to levy taxes through garnishment.
The Garnishment Process
The process begins with the IRS sending you several notices before commencing a wage garnishment. These typically include:
- CP 501: This is the initial reminder notice, alerting you to unpaid taxes.
- CP 503: A second notice, urging immediate payment to avoid further action.
- CP 504: An urgent notice that precedes potential levying actions.
- Letter 1058: The final notice of intent to levy, giving you 30 days to respond before garnishment begins.
How to Stop a Wage Garnishment
Stopping an IRS wage garnishment requires decisive action. Here are several strategies you can employ:
1. Full Payment or Installment Agreement
The most straightforward method is to pay the owed amount in full. If that's not feasible, you might consider entering into an installment agreement with the IRS, allowing you to pay off your debt over time.
2. Offer in Compromise (OIC)
An Offer in Compromise allows you to settle your tax debt for less than the full amount you owe. This option requires proving that paying the full amount would cause undue hardship. Details about eligibility and applying can be found in IRS Form 656-B.
3. Requesting a Collection Due Process Hearing
Responding to your final notice with a request for a Collection Due Process (CDP) hearing within 30 days can halt the garnishment temporarily. This hearing will give you a chance to discuss alternatives and potentially stop the garnishment.
4. Prove Hardship
Demonstrating that wage garnishment creates an extreme financial hardship can lead to a release of the levy. You'll need to provide documentation proving your inability to meet basic living expenses.
5. Bankruptcy
As a last resort, declaring bankruptcy might stop wage garnishment. However, this comes with significant implications, and should only be considered after consulting with a financial advisor or attorney.
Working with Professionals
Navigating IRS rules and processes can be complex. Consulting with a tax professional or attorney can provide clarity and help manage the procedure effectively, adjusting the approach based on individual circumstances.
Next Steps
- Review your IRS notices carefully and determine your current standing.
- Calculate the total owed, including penalties and interest.
- Consider consulting with a tax professional for a customized plan.
- Act promptly within any deadlines specified by the IRS.
Conclusion
Receiving a notice of wage garnishment can be overwhelming, but understanding your options and acting decisively can mitigate its effects. For professional assistance in resolving IRS wage garnishment issues, visit our dashboard.