Is There Anything I Can Do to Stop an IRS Wage Garnishment?

Is There Anything I Can Do to Stop an IRS Wage Garnishment?

It’s best to try to stop a wage garnishment before it happens. If you owe the IRS back taxes and do not have any arguments for why the tax assessment is improper or incorrect, you should consider entering into an installment agreement or negotiating an Offer in Compromise. This will prevent any collection actions—such as a wage garnishment or bank account levy—as long as you fulfill your end of the agreement.

However, you may reach the point where a wage levy is imminent and you don’t have much time to stop it from happening. Fortunately, the IRS is required to give you a Collection Due Process (CDP) notice before initiating a wage garnishment against you.

Stop Wage Garnishment at a Collection Due Process Hearing

You have 30 days to respond to the CDP notice and request a hearing. There are three main ways to prevent the wage garnishment (or another type of collection action).

  • You can offer the IRS a collection alternative by agreeing to an installment payment plan or Offer in Compromise
  • Dispute the tax using a variety of tax controversy defenses, such as innocent spouse relief, expiration of the statute of limitations, or another legitimate defense, but only if you haven’t previously been given a chance to dispute the tax assessment. In some cases you will not be able to dispute the amount due, i.e. if you previously had an opportunity to appeal the tax due
  • Claim that an economic hardship will exist if the wage garnishment occurs

A fourth option is to file for bankruptcy, which would temporarily stay any collection actions, and in some cases provide permanent relief. Read our article on receiving a tax debt discharge in bankruptcy for more information.

Releasing an Existing Wage Levy

If the wage levy has already occurred, you will once again have to give the IRS a good reason for releasing the levy. The IRS can levy a significant portion of your regular wages, based on your filing status and number of exemptions claimed. Any bonuses can be entirely seized by the IRS as well.

If you offer a collection alternative or pay off your tax liability, the IRS will release the levy. You can also request a wage levy release if the levy is causing immediate economic hardship. Otherwise, the IRS will continue to levy your wages until your tax liability is paid off, which could be a long time.

If you need assistance finding the best collection alternative or requesting a wage levy release, consult a tax controversy attorney.

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