A wage garnishment is an Enforced Collection Action and is one of the harshest collection actions used by the IRS. To execute a wage garnishment, the IRS will first file a Federal Tax Lien. A Federal Tax Lien is a legal claim to your property as security for the payment of your tax debt. A Federal Tax Lien is a claim against all your property and any rights you have to the property. This includes property owned at the time the lien is filed and any property acquired thereafter.
Next the IRS will obtain a Levy. The Levy can then be used to garnish income from wages, salary, bonus, commissions or other payments for personal services. The levy is served to your employer (or another third party i.e. your pension provider) who by law must withhold amounts from your paycheck determined by a mathematical calculation until the levy is satisfied. Once your employer receives this notice, your employer must comply with the notice. A Levy on your wages does not need to be served each time you are paid. It will remain in place until the tax debt is satisfied.
The IRS doesn’t care if this leaves you without enough money to pay the rest of your bills. Typically they will seize as much money as they can and leave you with just the amount that is set forth by the tables of allowable expenses. The garnishment will remain in place until the IRS has seized enough of your income to satisfy your tax liability plus interest and penalties or until you have come to some other sort of agreement with them.
An IRS wage garnishment is very scary. It is likely that the IRS will take more money through garnishing your wages than if you were to cooperate and setup an alternative form of settlement. We can usually prevent garnishments and if you already have one, we can assist you with either a full or partial release of the garnishment. Our team is highly skilled and experienced in working with the IRS to both prevent wage garnishments and having them released.
Within one business day of retaining our Firm, we will contact the IRS and inform them of our representation and work on your behalf to achieve a successful resolution to your tax problem.