A wage garnishment is a levy that the IRS has a right to issue to an employer of a taxpayer who owes the IRS money. The IRS must give proper notice to a taxpayer before it can actually issue the levy. Proper notice constitutes several form letters ending with a letter with a Final Notice of Levy attached. Once the notice has been sent to the taxpayer, the IRS can issue a garnishment after 30 days from the date of the letter.

An employer is legally obligated to comply with the terms of the wage garnishment. However, if the taxpayer is no longer employed or for some other reason the employer does not owe the taxpayer money, the employer does not have to honor the garnishment. If the taxpayer goes back to work for the employer, then the employer is re-obligated to honor the garnishment.

Through the wage garnishment, the IRS is allowed to take all of a taxpayer’s wages up to a certain amount. The IRS gives the employer a chart that informs the employer of how much they need to send to the IRS. Frequently, the amount the IRS can garnish is up to 80% of a taxpayer’s wages.

The wage garnishment is ongoing until the taxpayer can contact the IRS and negotiate a release of the garnishment. The IRS will agree to release a wage garnishment in full if the taxpayer agrees to pay the liability in full, agrees to a payment plan, or can show that the garnishment is causing an economic hardship.

There are only a few requirements that must be meet before the IRS can levy a taxpayer’s wages:

1. The IRS must have assessed the tax and sent a Notice and Demand for Payment;
2. The taxpayer must have neglected or refused to pay the tax; and,
3. The IRS must have sent a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy.

The IRS can serve the Final Notice in person, leave it at the taxpayer’s home or usual place of business, or send it to the last known address by certified or registered mail. It is important to note that the IRS is only required to send the Final Notice to the last address known to it. The taxpayer does not need to actually receive the notice for it to be effective. Many taxpayers never actually receive the final notice. Those taxpayers may not realize they are in danger of receiving a levy until their wages are actually garnished.

Once an employer receives a Notice of Levy from the IRS, they are required to immediately withhold a large portion of the taxpayer’s wages and send the funds directly to the IRS. The amount of funds that must be withheld is determined by how often the taxpayer is paid and their number of dependents. However, an IRS garnishment usually takes a much larger percentage of funds then other levies. For example, a single mother of two, who is paid weekly, would only be allowed to keep $280.77 of her wages, the rest would be sent to the IRS.

Once a wage garnishment is issued, it is important to act quickly to get it released. Normally, the taxpayer will need to provide the IRS with detailed financial information and enter into negotiations regarding a resolution of the delinquent taxes before the garnishment will be released. Any such resolution will be based on the taxpayer’s unique, specific financial situation. Because of the technicalities and complexities of these negotiations, taxpayers may want to consult with a tax professional for assistance.

The Tax Lady Roni Deutch and her law firm Roni Lynn Deutch, A Professional Tax Corporation have been helping taxpayers across the nation find IRS tax relief for over seventeen years. The firm has experienced tax attorneys who will fight the IRS on your behalf.