IRS Wage Garnishment Laws & Rules for Income Tax Levy

wage garnisment rulesIRS wage garnishment is the legal seizure of your wages done by the federal government in order to satisfied unpaid back taxes. The IRS will normally garnish 70% or more of a taxpayers income once the wage garnishment is in effect. The IRS can garnish salaries, wages, tips, bonuses and commissions. The IRS can legally seize the majority of your assets if you have been unresponsive to their repeated demands of payment or settlement of IRS taxes owed.

With IRS wage garnishment the IRS will contact your employer and require them to withhold a certain portion of your wages and send them over to the IRS. Your employer is required to do this by law and if they don't comply with the IRS they will be made liable for the amounts that should have been collected.

The Wage Levy Process

The IRS typically follows a standard process that leads up to a wage levy. If you receive an intent to levy it should be no surprise to you since you likely received multiple letters and most likely multiple phone calls from the IRS. Once the IRS has went through their entire series of letters the last one you will receive before wage garnishment is used is the "Notice of intent to Levy". Once this notice is sent the IRS can begin collections 30 days after you receive this notice. The IRS will then look at your financial situation and decide which levy method would allow them to collect the amount owed the quickest. If you are a salaried employee it is pretty likely that they will choose to garnish your wages. In order for the IRS to begin collections they must have satisfied the following three requirements:

  1. The IRS assessed you with a tax a tax liability and demanded payment for it

  2. You did not pay that tax amount that was assessed or you didn't not come to some other sort of agreement with the IRS

  3. The IRS sent you a "Final Notice of Intent to Levy" and 30 days have passed since you received that notice

Once the IRS has met the previous three requirements they can begin the levy. If they have not met those three requirements it is possible that you could appeal the tax levy and win. It is important to note that the IRS does not like to impose wage levies. These wage levies cost the IRS money and time and they IRS would much rather resolve taxes owed in another manner. There are many ways to stop or prevent wage garnishment. The IRS does has many different methods to allow taxpayers to get back onto good terms with them, no matter how bad their financial situation is.

If you have any questions on the wage levy process or laws it is highly suggested that you consult with a tax professional. A tax professional can quickly analyze your tax and financial situation and come up with the best plan of action in order to stop your wage levy.

Wage Garnishment Release & Help


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