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Wage Garnishments

IRS Wage Garnishments

What Is A Wage Garnishment?

A wage garnishment is a brutal method of collecting a tax debt directly from the taxpayer’s paycheck. It is the ultimate “guided missile”, striking at the most vulnerable source, your ability to provide a living for you and your family. This is a common tool that the IRS and the state of California use to collect back taxes through your employer. Once a garnishment is filed, the employer is required to collect and send a percentage of each paycheck to the levying agency. A large percentage of taxpayer’s wages will be turned over directly to the IRS or the state. The IRS and most states do not require a court order. Instead, they must follow internal procedures prior to the garnishment levying. I’ve consulted with multiple clients who have attempted to threaten, or otherwise confront their employer about the garnishment, but as a tax attorney in San Jose, I have to tell you that this will be a fruitless effort. A release must be negotiated directly with the IRS or other levying agency.

How Much Can The Government Garnish?

The amount that the IRS can keep from any wage garnishment is based on your marital status and number of dependents. Unless an alternate resolution plan is negotiated the IRS keeps most of the money from the garnishment. The amount of your income that is exempt from an IRS garnishment is figured by adding the standard deduction you can claim on your taxes and the amount you can claim for exemptions, divided by 52. A family of three subject to a wage garnishment will be allowed to keep as little as $325 per week. A tax garnishment on your social security check is limited to fifteen percent, while independent contractors can be subject to complete garnishment of their income.

Some states limit the amount of the state garnishment. For example, California tax agencies such as The Franchise Tax Board, The Employment Development Department and The State Board of Equalization can only collect up to 25% of the taxpayer’s disposable wages through a wage garnishment.

Needless to say, it does not take long before basic living expenses go unpaid and the taxpayer finds themselves at the complete mercy of the tax agencies.

How Long Does A Garnishment Last?

Unlike a levy, which is a one-time attack on your bank or other accounts, an IRS garnishment continues until officially withdrawn, the debt is paid or otherwise resolved through an Offer in Compromise or installment agreement.

How Can TaxHelpers Stop The Garnishment?

Many clients turn to us for emergency help with a wage garnishment. Our tax attorneys fully understand how important a regular paycheck is to our clients and their families, and we know how devastating a garnishment can be. Upon being retained, our lawyers immediately contact the IRS, or the state to negotiate the release of the garnishment. Of course, releasing or lowering a garnishment is only a temporary solution. We follow up by developing a long-term strategy for dealing with the tax bill. Once the garnishment is released, we will either set up a repayment plan or propose a reduction plan for the client.  We may also be able to show that the tax bill is incorrect or is causing a severe hardship.

Related Topic: Tax Liens