IRS Wage Garnishment: How a Tax Wage Levy Works
IRS wage garnishment is when the Internal Revenue Service instructs an employer to withhold money directly from a taxpayer’s paycheck for back taxes. Usually, this is not something that happens out of the blue—by the time matters have progressed to this point, the IRS has sent multiple letters and notices. The IRS usually only uses this collection method if it has run out of other options and you have refused to respond to repeated requests for payment.
It’s important to understand how wage garnishment works so you can avoid it and stop the IRS from taking your wages. To learn about the process, explore the following links.
IRS wage garnishment is a way for the IRS to collect taxes when you are not paying them. It is one of the enforcement tools the IRS has for delinquent taxpayers. IRC 6331 of the Internal Revenue Codes authorizes levies for collecting back taxes. When the IRS garnishes your wages, your employer takes money out of your paycheck and sends it to the IRS. Your employer must comply with the IRS. Learn when and why the IRS imposes wage levies and garnishes wages.
When the IRS Garnishes Wages
The IRS may garnish your wages if you have unpaid taxes and you don't make arrangements to pay them. The IRS sends several notices before garnishing your wages, and if you don't respond, the agency will move forward with the garnishment. The exact timeline between the tax assessment and the wage garnishment varies based on the situation.
If your employer receives IRS form 668-W you will have 3 days to respond, otherwise, your employer will be required to begin garnishing your wages. Your employer will be required to garnish your wages or they can be held personally liable for the amount they should have collected, plus additional penalties.
How Much Can the IRS Garnish From Your Paychecks?
When it comes to IRS wage garnishments, the rules don't address how much the IRS can take. Rather, they spell out how much the IRS must leave you. If the IRS garnishes your wages, the agency must leave you enough to live on - this number is based on IRS financial standards for housing, transportation, food, and other essentials, and it varies based on your location and family size. The IRS can take all of your wages over that amount, including bonuses, commissions, etc.
There are many ways to prevent or stop wage garnishments. The right method depends on your financial situation. It’s important to understand your options so you can protect your paycheck.
Questions and answers to commonly asked questions about IRS wage garnishment and wage levies. The IRS also provides some answers to commonly asked wage levy questions.
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