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Typically, the IRS issues many letters before garnishing your pay.
These notifications are known as the IRS collections notice stream (often five notices), giving you several opportunities over multiple months to settle your tax due or reach an arrangement with the IRS. Before garnishing your income, the IRS typically delivers a Final Notice. You may also protest a proposed levy by seeking a Collection Due Process hearing within thirty days after receiving the first letter.
You can eliminate a wage garnishment using an ETP. (extension-to-pay)
If you have not previously utilized an ETP arrangement, the IRS may let you employ the ETP to lift the levies. However, the IRS would likely deny the ETP for garnishment relief if you have breached previous agreements.
A wage garnishment might be lifted even if you still owe money. The IRS must cease collection efforts if the tax is paid in full. In addition, the IRS will most probably accept a monthly installment agreement to reduce your tax debt gradually. To realize this, you can demonstrate to the IRS that wage garnishment causes financial or economic hardship by showing relevant documents of your expenses, assets, liabilities, and income.
You are able to submit an offer in compromise, an arrangement with the IRS to settle a tax debt for a lower amount than the amount you owe. You should be aware that submitting an offer in compromise suspends the IRS’s statute of limitations to recover your tax debt. Therefore, you must ensure that you qualify; otherwise, you are simply prolonging the IRS’s time to collect the tax debt.
You may demonstrate in tax court that the salary garnishment against you was performed in mistake, in violation of the law, or contrary to the IRS’s procedures.
It is important to note that if you owe and have not completed a tax return or have several tax returns due, you must finish them before contacting the IRS. The IRS will not give any tax debt relief until the delinquent tax return has been filed.
If you struggle with your debt, you should seek debt relief.
You can request that the IRS accelerate the discharge of a wage garnishment due to economic hardship. You can request a hardship release without putting up a collection agreement if you cannot cover your essential living expenditures. You can also present the IRS with documentation of your hardship.
Presenting to the IRS can be lengthy, mainly if the initial IRS response is, “We need additional information about your hardship before we can discharge the garnishment.” Depending on the circumstances, it may be preferable to request presently not collectible Status or a compromise offer, both of which will relieve the garnishment.
What Are My Options in case of Wage Garnishment by the IRS?
Traditionally, the IRS gives a variety of resolution alternatives for tax debt. However, it will often only garnish your wages as a final resort if you have rejected all earlier attempts to settle the issue. Learn more alternatives to resolving wage garnishments with Ideal Tax.
Now is the moment to discuss a debt settlement or monthly payment if you cannot pay off the outstanding total in a single sum. You will likely be dealing with a law firm at this point. If you can negotiate a payment plan, you have effectively prevented a garnishment from occurring.
Get assistance from an expert.
When the IRS is deducting or about to deduct substantial chunks of your check to pay down your tax obligation, it is imperative to act swiftly. Therefore, if you are battling debt, one of the tax specialists at Idealtax.com can provide you with counseling services.
If so, they can help you enroll in the IRS’s Fresh Start program. In addition, individuals and small businesses can benefit from the IRS program. In 2011, the IRS initiated the program for financially-strapped people. Now, the IRS has developed additional steps to assist various individuals.
They have expanded the program’s scope by creating a more lenient version of the Offer-in-Compromise. With this improvement in place, some of the most financially strapped individuals will be able to fix their tax concerns sooner than you would imagine.