Payroll garnishments are an incredibly successful collection method employed by the IRS. It is also one of the hardest life experiences a person can go through. Many people find that they can't keep up with their bills after one has started. This page will explain how payroll garnishments work, and the various ways to end or prevent them.
How Payroll Garnishments WorkIf a tax debt goes unpaid after notices from the IRS have been sent to the last known address it has on file for a taxpayer, the IRS often resorts to payroll garnishments. Unless the taxpayer has voluntarily agreed to an installment agreement that garnishes his or her paychecks, payroll garnishments do not protect taxpayers from any other aggressive action. Taxpayer bank accounts, retirement accounts, and other sources of income can still be attacked by the IRS.
The taxpayer's employer receives notification that only a certain amount of the taxpayer's paycheck will be exempt from the levy. The rest of his or her paycheck is to be sent directly to the IRS. The IRS decides how much the taxpayer is left with using a table of national living standards. This table limits the taxpayer to the most basic necessities. Depending on the filing status and number of allowable exemptions on his or her W4, payroll garnishments could leave someone with as little as $791 a month.
Fighting Payroll GarnishmentsThe best way to fight payroll garnishments is to prevent them entirely by entering into an agreement with the IRS. However, if one has already begun, you can still stop it. If you believe that there is some mistake and you do not owe what the IRS claims, you can appeal it by submitting a Form 9423. Having the IRS Publication 1660 on hand will help greatly. Only pursue this avenue if you know the tax liability is incorrect. Filing frivolous appeals to stop payroll garnishments will only get you a fat fine from the IRS.
You can also call the IRS at 800-829-1040 and prove that the levy has caused incredible economic hardship. You may have to submit paperwork showing that your electricity will be shut off or you will be evicted. The IRS does not care if payroll garnishments cause you to lose your internet connection or fall behind on your credit card bills. Claiming hardship is not a permanent solution, but it can help you in the short run.
Entering into an installment agreement with the IRS is probably the best way to stop payroll garnishments. By agreeing to pay a certain amount on time every month, the IRS will no longer need to take money out of your paycheck. There are a number of different kinds of installment agreements. If you owe more than $10,000, it is probably best to ask for professional help finding the right one for you. The IRS tends to pressure taxpayers with higher debts into unaffordable plans. If you absolutely cannot make a monthly payment to the IRS, you may qualify for the Currently Not Collectible program.
Don't let payroll garnishments ruin your finances! Consult a professional. Call now or fill out the form below for a free tax debt consultation on payroll garnishments! We'll only connect you with a tax debt relief company holding at least a B rating with the Better Business Bureau.