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Can The IRS Garnish Your Wages?

The Internal Revenue Service (IRS), like most creditors, has the power to garnish your wages if you owe a tax debt. However, unlike most other creditors, the IRS can actually start garnishing your wages without first getting a judgment from the courts. And the amount the IRS can take is usually more than what regular creditors can take. But the IRS will work with you and they have a number of options available for those looking to avoid wage garnishments. Are you having tax troubles and wondering what your options are? Here’s our guide to when can the IRS garnish your wages.

How To Deal With Your Tax Obligations

Tax season means one of two things will happen. Either you will pay the IRS money or they will pay you money in the form of a refund. Paying your taxes is a flexible procedure and there are several ways to do it. In the best case scenario, you simply send in a check in the full amount you owe and that’s that. But for those who can’t pay the full amount they owe on time there are other options you can explore. These options include:

Setting up a payment plan
Making a settlement offer called an Offer in Compromise
Declaring bankruptcy

Keep in mind that if you do nothing, then the IRS will initiate its collection process. It’s always better to address your tax issues head-on rather than procrastinating.

How Much Money Will Be Garnished From My Wages?
State and federal law limit the amount that most creditors can take from your wages. The tax code, on the other hand, limits only what the IRS is required to leave. The IRS is allowed to take as much money from you as it can. There are no upper limits, they merely need to leave you enough money to cover your basic living essentials plus any exceptions you may qualify for. The amount of money that you get back in your tax refund amounts to the number of exemptions you claim in your returns.

Before starting to garnish your wages, the IRS will always give you written notice and, at least, some time to make the necessary arrangements if you do in fact intend on taking care of the situation.

The notice that the IRS will send you prior to beginning to garnish your wages will include an itemized list of all the charges (tax, penalties, and interest) and give you a date by which you must pay the balance in full. But, unlike with other creditors, the IRS doesn’t have to take you to court and get a ruling before they start to garnish your wages.
What To Do If The IRS Is Garnishing Your Wages
There are many ways to deal with your tax debt. And, despite its reputation, the IRS can actually be quite flexible. Instead of waiting for the IRS to start garnishing your wages there are a number of steps you can and should take. These steps can include the following:

An installment agreement
File/amend your tax returns
Offer In Compromise
Wait for the IRS’s 10 year collections period to expire (statute of limitations)
Filing for bankruptcy
Innocent spouse relief
Currently not collectible

Do you live in Michigan and need help tax help? Then give Ayar Law a call today at (248) 262-3400 for a free, no-obligation consultation with our talented tax law team.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.

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