When you owe back taxes to the IRS, the federal agency can take several measures to collect the money owed – including garnishing your wages. This means that the IRS can contact your employer and have them direct a portion of your income — whether it is hourly wages, salary, commissions, or bonuses — directly to the IRS until your debt is satisfied.
This can have several negative effects for you — including the embarrassment of your employer finding out you are having financial and tax difficulties when the IRS inevitably contacts him or her. There is a reason people don’t discus their financial woes with others. It can strip one of their dignity and cause others to look at them differently. Another negative impact? Well, lest we forget the financial hardship you will face for having a portion of your wages sent to the IRS.
Fortunately, when you work with a tax attorney there are options you can explore to stop the wage garnishment before it is applied. Learn more about these solutions below.
Key Insights We Will Discuss:
- How to set up a payment plan with the IRS
- What is an Offer in Compromise?
- How to prove financial hardship
- Why filing for bankruptcy may work temporarily
Set Up a Payment Plan to Pay Your Taxes
If you owe the IRS a large amount of money that you cannot afford to pay off in one lump sum, you can try to set up a payment plan with them to pay your debt off in affordable installments. This can prevent the IRS from garnishing your wages, and it does not put you in financial hardship as you can pay the owed taxes over a series of payments.
Try to Qualify for an Offer in Compromise (OIC)
If you are facing wage garnishment, one way to have it stopped is to request an Offer in Compromise from the IRS. While this is a selective program, if you can prove your financial situation does not allow you to pay the total amount you owe in taxes, you can work with a tax attorney to offer the IRS an amount lower than what you owe; sometimes they’ll even accept an offer amount significantly less than what the tax debt is. But there are no guarantees and it is based on specific calculations. The IRS may accept your offer if the federal agency feels you are at risk of not being able to afford to pay the debt.
Prove You Are Under Financial Hardship
If you can prove to the IRS that having your wages garnished would prevent you from taking care of the basic needs of you and your family, then it might temporarily suspend action until your financial situation improves. To qualify for this, a program called Currently Not Collectible Status or simply CNC, you will need to work with a tax attorney to prove your financial situation.
Filing Bankruptcy may be a temporary solution if the IRS is going to start garnishing your wages. The IRS can still act once your bankruptcy is complete, but it might temporarily suspend actions while the proceedings take place: Might being the keyword here. Talk to your tax attorney to determine if filing bankruptcy is the right or viable option for you.
Appeal the Wage Garnishment
If you disagree with the IRS over the amount of taxes you owe, you can file an appeal with them. Work with your tax attorney to determine how to file an appeal an what information to submit to the IRS.
Contact a Tax Attorney
If you are facing wage garnishment from the IRS, call Ayar Law at 800.571.7175 to receive free, no obligation tax advice from a qualified and experienced tax attorney.
- You can stop wage garnishments from the IRS by setting up a payment plan with the federal agency
- Qualifying for an Offer in Compromise or demonstrating financial hardship can also stop a wage garnishment
- Filing bankruptcy can force the IRS to temporarily stop garnishing your wages to collect taxes
- If you disagree with the IRS over your owed taxes, you can file an appeal with them
- Contact Ayar Law to get free, no-obligation legal advice at 800.571.7175