An IRS wage garnishment is one of the most aggressive collection tools the government has. Unlike private creditors who must first sue you and obtain a court judgment, the IRS can begin garnishing your wages after sending a few notices. And the percentage they can take is often much higher than what a private creditor can claim.
How IRS Garnishments Differ from Other Garnishments
A typical creditor garnishment is limited to 25 percent of your disposable earnings or the amount above 30 times the federal minimum wage — whichever is less. The IRS is not bound by those limits. Instead, the IRS leaves you with an exempt amount based on your filing status and number of dependents, and takes everything above that. For a single person with no dependents, the IRS can take nearly everything except a small exempt amount roughly equivalent to the standard deduction divided by 52 weeks.
The Notice Process
Before garnishing your wages, the IRS must send you a series of notices. It starts with a Notice and Demand for Payment, followed by a Final Notice of Intent to Levy and a Notice of Your Right to a Hearing. The Final Notice is your last chance to act before the garnishment begins. You generally have 30 days from that notice to request a Collection Due Process hearing, which temporarily stops the levy while your case is reviewed.
How to Stop a Garnishment
There are several ways to stop or prevent an IRS wage garnishment. The most direct is paying the balance in full. If you cannot do that, entering into an Installment Agreement (a payment plan) will usually stop the garnishment. You may also qualify for Currently Not Collectible status if you can show that paying anything would leave you unable to meet basic living expenses. An Offer in Compromise, if accepted, will also release the garnishment. The worst thing you can do is ignore the notices — the IRS will proceed without you, and your employer is legally required to comply.