Are you looking to stop or avoid wage garnishment? Can you support yourself and your family on half of your paycheck? Let IRS Tax Freedom give you back your peace of mind!
When you ignore, choose not to pay, or can’t afford to pay an outstanding tax bill, the IRS will take alternate actions. One of their methods is wage garnishment, which means they will take part of your wages in what is known as a “continuous levy.”
Prior to continuous levy enforcement, it’s likely that you received a warning of an imminent wage levy.
When the amount due isn’t settled prior to the levy, the IRS will contact your employer and will mandate that they withhold a large part of your paycheck. Whatever amount the IRS mandates, your employer must redirect money from your paycheck to apply towards your tax debt balance.
The IRS can take 25% or more of your monthly income, in addition to regular withholdings, which can mean heavy financial strain that you aren’t prepared for.
Fortunately, there are ways to stop IRS wage garnishment, but it can be very confusing to determine which route to take. If you’re having – or about to have – your wages garnished, IRS Tax Freedom can definitely help you. Armed with the right information about your situation, we can stop wage garnishment in its tracks.
In addition to your overall tax debt, typically, we’d like to know upfront if your financial situation has changed since you were first on the IRS’s radar, and how much of your tax debt consists of penalties and fees.
Below are some methods of stopping wage garnishment, some would be right for you, some would make no sense pursuing at all. Through a free consultation, we can assess your situation and explain your options – and which ones make the most sense for solving your tax debt.
Method 1: Pay off the debt upfront, in one lump sum
If you have the means, your quickest, best solution was to pay off your tax debt when you received your first bill or filed a dispute. But since you’re reading this article, it’s fairly safe to assume that you’re not, or were not, in a position to pay off your tax debt upfront.
Most everyone would take this option if they could, and be done with their debt once and for all. But whatever your situation is at this point, if you get behind the IRS Tax Freedom shield of protection, we can stop wage garnishment in its tracks, and guide you to your best solution so that you can be in the same position, had you been able to pay off your debt upfront.
We can very likely negotiate a reduction in the amount owed as well…all it takes is a free consultation with us.
Method 2: Set up an installment agreement, which is a repayment plan to the IRS
An installment agreement is an arrangement between you and the IRS where things are set up so that you can pay off all of your debt in small installments. Ideally, monthly payments are tailored to fit your budget based on your current financial status, and they can be spread out up to six years.
Many people attempt to work out this arrangement with the IRS themselves, but the vast majority find out very quickly that what looks good on paper (or computer screen) doesn’t translate well to real life. We have a lot of clients who started out trying to do things themselves and soon found out that they were in over their heads and needed our help to make things right.
It’s important to know that in order to arrive at the best payment plan that works for you, it takes a lot of negotiating with the IRS. Attempting to do it on your own always benefits the IRS at your expense. Talk to us first – we know how to negotiate your best payment plan with the IRS– one that works for you!
Method 3: Settle your tax debt for less than you owe
We can possibly negotiate an Offer in Compromise that allows you to pay less than you actually owe…if you qualify.
In order to qualify for an Offer in Compromise (OIC) with the IRS, your financial situation must be pretty extreme and there is no way that you can properly pay your tax debt now, or in the near future.
If the IRS sees that the only way they’ll be able to get any money paid towards your debt is to settle that debt for less than what you owe, they might consider an OIC. But it takes a lot of negotiating with actual proof that this would be the case.
And that’s what we do, and why we urge you to get behind our shield of protection and let us handle all the negotiating for you.
If an Offer in Compromise is possible for your situation, we’ll be able to get it for you. But we need to know your situation upfront to determine what is possible and appropriate for you. Not many situations allow for an OIC to be approved. If you can pay (most of) your bills and have tangible assets, an OIC won’t be possible and you need to know that upfront.
If you can qualify, it will reduce the overall amount of tax debt you have to pay back with a legal settlement with the IRS, and we will work out the best method of payback for you and your financial situation. Before the IRS will consider an OIC, you must file and be current with all your tax returns (this is called being “in compliance.”) and we will handle all of that for you.
One thing to remember is, if you are granted an OIC, you must also stay compliant with your taxes for five years following your OIC. As with a standard payment plan, negotiating an OIC is very tricky and should be done by tax resolution professionals like us. This is what we’re experts at…let us use our expertise to reduce your tax debt.
Method 4: Partial Payment Installment Agreement (PPIA)
A Partial Payment Installment Agreement is exactly what it sounds like, and to qualify, you must be compliant with all your tax returns; not able to pay the full amount of your debt; you must be able to make minimum payments without defaulting, and the IRS will need to see a complete financial statement, which we can prepare and present to them on your behalf.
If you qualify, IRS Tax Freedom can negotiate a suitable agreement with the Internal Revenue Service based on your income, expenses, ability to pay, and whether you can use equity or assets to pay your debts. We can ensure a favorable plan for you that keeps your best interests and your financial future in mind.
If you qualify and agree to a PPIA, the IRS will review your situation every two years. If they notice an improvement, they may raise your payments. Hiring IRS Tax Freedom will keep you protected, knowing we’ll work with you from the start of your case to the end.
Method 5: Declare that the wage garnishment is causing you financial hardship
If your hardship story is presented to the IRS and they determine that you really need to live on the income they are trying to take, they may stop the levy on your wages. If they do indeed determine your financial hardship is real, the IRS may consider your situation “Currently Not Collectible (CNC)”.
Emphasis should be placed on the word “currently”. This doesn’t mean that you never have to pay off your tax debt. Declaring hardship, if they accept it, will delay things for as long as you qualify for “Currently Not Collectible” status.
The IRS will periodically audit your financial status and if your financial situation improves, the IRS will start up their collection actions again – and they do monitor your status from time to time, so a positive financial change won’t go unnoticed.
This hardship status is not easy to achieve and definitely requires a tax resolution professional to explain your case and sell it to the IRS, assuming that wage garnishment will indeed cause you financial hardship. If achieved, any delay in timing should still be utilized to effectively solve your tax debt once and for all.
Method 6: Declare bankruptcy to get your tax debt discharged
You can stop IRS wage garnishment if you declare bankruptcy. When you file for bankruptcy, you get an automatic stay that stops all collection actions, including garnishment, repossession, and foreclosure. Because this can result in a big hit to your credit score, you shouldn’t take this option lightly. But it’s worth knowing that bankruptcy can be a good way to get a clean break from debt, including back taxes.
Once we know your specific situation, we can advise you whether bankruptcy is your best option and if so, we can connect you with a trusted, successful bankruptcy attorney to make the process as smooth as possible for you.
Method 7: (the crazy, not-at-all-advisable method): Quit your job
You can resign or switch jobs to evade the IRS’s pursuit, but this isn’t the wisest option. In fact, most experts – including us – would say you’re crazy for trying this. But, because it takes a while for the IRS to file for wage garnishment with a new employer, quitting is a way to avoid paying your tax debt right away. Just keep in mind, the IRS will eventually find you and when they do, they will have less empathy for you and your situation.
They have a lot of arrows in their quiver, and they very likely already know where you keep your money. They’ll be eyeing your checking and savings accounts, as well as all of your assets like your house and car. When they find you, you can be sure now you’ll be hit with higher penalties, increasing how much you owe.
This is most often a knee-jerk reaction that gets people in hot water. Your best course of action is to hire IRS Tax Freedom to get you protected from the IRS, put wage garnishment on hold, and we’ll figure out your best plan of action for solving your tax debt. Talk to us as soon as possible.
Contact IRS Tax Freedom to help you stop IRS wage garnishment.
Having your wages garnished is a complicated and stressful experience.
To ensure you are making the right decisions and understanding all of the options available to you, you should hire the tax debt professionals, IRS Tax Freedom.
We know exactly how to stop IRS wage garnishment – as well as any other tactics they might be using. We can leverage your financial information in a way that protects you and results in a solution to the tax debt problem you are facing; a solution that works for you and that you can manage.
The first step in solving your Wage Garnishment begins with a free discovery call. Tell us your situation and we’ll tell you your next step.