What You Need to Know about IRS Wage Garnishment

What is an IRS Wage Garnishment?

IRS wage garnishment , also known as a wage levy, is a forced form of collection imposed by the Internal Revenue Service (IRS).  This action takes place when a taxpayer fails to pay taxes.  The process allows the IRS to withhold a certain percentage of paycheck earnings to put toward outstanding taxes.  The amount taken during a wage levy may be more than what most creditors usually take during wage garnishment. The garnishment action continues until the tax amount due is paid in full, settled or the statute of limitations has expired.

The IRS will impose wage garnishment when requirements are met during their collection process.  If a wage levy is in place without following the proper procedure it’s possible for a taxpayer to appeal the action.  The wage levy begins when the taxpayer’s employer is informed of the action.  The employer is instructed to withhold a certain amount from each pay with payments forwarded to the IRS. If the employer fails to abide by instruction from the IRS, they may become liable for tax payments that should have been forwarded.

The IRS sends a notice to the taxpayer when a wage levy is pending.  At this time, the taxpayer still has time to work out an agreement with the IRS to avoid garnishment. Options including an offer in compromise, installment plan or penalty abatement may provide the best solution for your situation.  The garnishment process is usually a last resort for the IRS when collection attempts lead to no payment received.  Questions and concerns should be discussed with a tax attorney or tax expert.