IRS wage garnishments don’t just happen to anyone, they happen when you’ve ignored your tax debt for too long and the IRS has no choice but to enforce collections. You may have had many personal or emotional reasons for not paying your tax debt, and considering the state of the economy, that is understandable. However, the IRS and state taxing authorities have little sympathy for unpaid tax debt, and it is their job to collect as much as they can as quickly as possible. One of the ways they force taxpayers to do this is to issue a wage garnishment or a bank levy. The process is straightforward. The IRS will send a delinquent taxpayer either a 60, 30, or ten day notice demanding that the tax debt be paid, and if nothing is done, a wage garnishment or bank levy will be issued, attaching up to 75% of the taxpayer’s income and up to 100% of all assets in the bank.
Remember, the IRS has sent numerous requests for the tax debt to be paid. Only when they are ignored is the wage garnishment or bank levy enforced. The IRS wants to push taxpayers into willful compliance, wherein their income is dramatically reduced to make the taxpayer agree to repayment terms so that the garnishment or levy is released. Often times, however, those repayment terms are so severe that the taxpayer cannot continue paying the monthly installment plan, and months later defaults on the agreement and the cycle begins again. The IRS sends notices that if the payment plan isn’t met, they will garnish. For most taxpayers, this vicious cycle goes on and on for years, and the tax debt becomes a troublesome part of their everyday lives.
There are some very important steps to take to make sure you don’t get caught up in this nasty game of IRS roulette. Step number one: avoid having a tax debt altogether. This means filing your tax return on time each year, paying close attention to the deductions you’re taking so as not to alarm the IRS with frivolous expenses, and to pay whatever small assessments the IRS sends immediately. Don’t just put the notices in a drawer somewhere where they can collect dust and penalties, put them on top of your pile and pay them. Step number two: if you do accrue a tax liability, respond to the very first notice the IRS sends you. This is crucial. The more notices you make the IRS send, the deeper and deeper you get into their system, wherein your name and taxpayer ID# are flagged and your account is scrutinized. If you cannot afford to pay the entire amount the IRS is claiming you owe, which for most is the case, you will need to submit your financials for the IRS to determine how much they think you can pay. Most of the time, their number is much higher than your number, and a compromise needs to be made. But how do you negotiate when you don’t know what you’re entitled to?
Hire a tax attorney and tax relief firm like ours to intercede on your behalf and make sure whatever you owe is structured for the most favorable repayment option and avoids any further collection action such as a wage garnishment or bank levy. We can also Settle Tax Debt, File Tax Returns, Lift IRS Liens, draft and Offer In Compromise or Penalty Abatement, negotiate Payment Plans, settle 941 Business Payroll issues, appear for your Audit Defense, and negotiate with Revenue Officers.
Sign up for our newsletter and be the first to find out when exciting IRS news happens. Yes, exciting. We're really into taxes.