Receiving a Notice of Wage Garnishment can be alarming. What does this mean for you, and how can you protect yourself from a significant pay cut? Let’s explore what a wage garnishment is, why it happens, and what steps you can take to address it.
What Is an IRS Wage Garnishment?
An IRS wage garnishment is a method the IRS uses to collect back taxes from individual taxpayers. After determining that you owe tax debt, the IRS sends a letter (IRS Notice 668-W) to your employer, demanding a portion of your paycheck. While the IRS leaves you with the minimum amount necessary for basic living expenses, this amount may not be sufficient. Your employer is legally obligated to comply with the IRS’s demand, or they could face significant fines.
Why Did This Happen?
The IRS may issue a 668-W Notice to your employer if you have outstanding tax debt. This garnishment is one of the most common and aggressive tactics the IRS uses to collect back taxes. Additionally, it can be embarrassing for an employer to learn about your personal tax debt situation.
The Wage Garnishment Notice Process
Receiving a garnishment notice can be distressing, but it’s important to understand that the IRS must follow a formal process before initiating wage garnishment. They are required to send a series of notices to inform you of your tax situation and the potential steps they may take to collect the unpaid taxes.
If you haven’t received these warnings, it’s wise to investigate whether the wage garnishment was improperly issued. This could be grounds for having the garnishment removed.
You Received the Warnings. What Can Be Done?
It’s crucial to know that a wage garnishment can be removed once it’s in place. Whether you’re facing the threat of a garnishment or trying to have one removed, understanding the IRS collection process is key to ensuring your rights are protected.
Everyone’s financial situation is different, but the best approach when facing a wage garnishment threat is to be proactive. Here are some steps you can take:
- Get Informed: Arm yourself with as much information as possible about the garnishment process and your options.
- Installment Agreement: Consider setting up an Installment Agreement with the IRS, which allows you to make affordable monthly payments.
By taking these steps, you can address the wage garnishment issue head-on and work towards resolving your tax debt.