IRS Wage Garnishment: What to Know
If you owe Uncle Sam money, they do not mind going to any length to get the funds from you. One such way is a wage garnishment. With this method, the IRS can take some or all of your entire monthly funds
We understand that no one wants to be in this situation as it could be embarrassing for both the employer and the debtor.
If Uncle Sam will, however, garnish your wage, it will not come as a surprise. Wage garnishment only comes when you have excessive taxes due and you have been sent series of tax notices requesting payment.
Failure to respond to such notice can result in wage garnishment. Before wage garnishment, you have a series of notices send to your last known address such as:
- An intent to levy (CP504)
- Notice and demand for payment
- Notice informing you of your right to Collection Due Process Hearing.
The good news is there are many options you can take to stop wage garnishment from the IRS. Here are series of options and you can decide which option is the best for you to stop it and reduce the financial burden.
How to Stop Wage Garnishment
1. Pay the debt in a Single Lump Sum
Provided you have the funds, pay off the debt as soon as you can. Wage garnishment is triggered only when you do not reply to Uncle Sam. This is the fastest and most effective way of stopping wage garnishment
2. Have a Repayment Plan Set up
With an installment agreement between you and Uncle Sam, it is possible to settle your tax debt in a gradual installment. Based on your budget, you will set up a monthly payment, and you can pay up to six years. You might have to pay a setup fee.
3. Negotiate a Payment Amount for less than your debt
There is an Offer in Compromise (OIC) form on Uncle Sam’s website, which you can fill and see if you qualify. The qualification will reduce the entire tax debt amount you owe. However, it is important to submit all tax return before your Offer In Compromise request can be granted. If you qualify for OIC, it is compulsory to be up to date on your tax return for the next five years.
4. Declare Hardship
You can contact Uncle Sam and let them know that wage garnishment will make your life miserable. If the IRS hears you out and decides that indeed, you need the income to live a normal life, they will stop the wage garnishment for a while.
This, however, does not mean your tax debt will be wiped off. This simply buys you more time since you are Currently Not Collectible. Once your life improves financially, the collection process will commence.
Nobody wants a wage garnishment, as it is stressful and downright complicated. There are, however, many decisions to make. As a result, you need to be making the right one. This is where a tax professional comes in. We have skilled and experienced tax professionals that know to relate tactically with Uncle Sam.
We understand how to leverage your financial situation to protect you and find a solution for the collection issue you have. Get in touch with us today at USA Tax Settlement and we will explore the solution that best fits your financial situation.
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