Have concerns about your financial well-being been robbing you of your spiritual peace of mind and distracting you from your higher calling? Are you worried about unpaid taxes and wondering “Can the IRS garnish wages to collect an unpaid debt?”
Many Americans struggle with unpaid back taxes, and the stress of these debts has a negative impact on all other areas of their lives.
Read on to discover more about wage garnishment and what you can do to lessen the threat or avoid it altogether:
Can the IRS Garnish Wages?
Any creditor can seek to garnish your wages if you owe a debt, and debts to the IRS are no different. Unlike other creditors, however, the IRS can start garnishing your wages without first obtaining a judgment. They can also take a bigger payment than regular creditors are able to obtain.
Having your wages garnished can cause a financial burden, cause embarrassment at work, cause problems when seeking future employment, and lead the IRS to harass you in an attempt to collect the debt in full. Many people experience emotional distress wondering how they will pay off their debt when money is already tight.
What is the IRS Collection Process Like?
Before the Internal Revenue Service starts the garnishment process, they’ll give you a heads up and an opportunity to make arrangements to pay your debts.
The IRS will start by sending you a written notice letting you know how much you owe. This statement will itemize each charge including taxes, interest, and penalties. You’ll also receive a date by which you must pay the debt in full.
If you don’t make the full payment by the due date or make any other arrangements approved by the IRS to make regular payments, they’ll begin looking at more assertive ways to collect on the debt. They might decide to seize your assets, place liens on your property, withhold future refunds, and/or garnish your wages.
How Much Will the IRS Take?
There are state and federal laws in place that limit the amount that the average creditor is allowed to take from your wages. But the IRS plays by a different set of rules. They will take as much as they can to pay a debt and leave only what the law says is necessary for you to pay for your necessities.
The amount of money you are able to keep is decided in part by the number of exemptions you claim on your taxes.
What Can I Do to Avoid Wage Garnishment?
As you’re probably already aware, each tax season as you prepare your tax return, you’ll either end up owing the IRS more money or you’ll receive a refund.
If you owe the government money, there are many ways to pay. You can always write a check directly to the IRS for the full amount owed when you send it your tax return.
Many people find that they don’t have the ability to pay the full amount owed all at once. If you find yourself in this position, you want to contact the IRS directly to set up a payment plan. Ideally, the IRS will want the full debt paid within 3 years. Be aware that if you come to an agreement regarding a payment plan, interest will continue to accrue on the balance.
Another option includes a settlement offer in which you come to a compromise with the IRS as to what you’ll pay in order to settle the debt. Under some circumstances, the IRS might accept a smaller sum and consider it a “payment in full”. If you offer up a compromise and the IRS accepts it, any tax liens or wage garnishments are removed and you are given a clean slate.
Some people have to turn to bankruptcy for financial relief, but just remember that filing for Chapter 7 bankruptcy will not alleviate you from having to repay your tax debts. Only Chapter 13 bankruptcy offers some leniency with tax debt repayments.
Should you do nothing at all and choose, instead, to ignore your tax debts, the IRS will take the collection process into their own hands and possibly go after your wages.
What Else Could Happen if You Don’t Pay Your Taxes?
The IRS garnishes wages,but that’s not all they can do if you don’t pay your taxes. Be aware that if you avoid paying your debts to the government, you put yourself at risk of the following:
♦ Having the IRS close your business
♦ Seizure of your home and property
♦ A tax lien filed against you
♦ A levy against your bank account
♦ Damage to your business relationships
♦ Negative impact against employment opportunities
To avoid such serious consequences, you might want to seek professional legal advice or the assistance of a wage levy service.
An experienced attorney or levy service can help you navigate the law, buy you additional time to pay your debts or lessen your payments altogether and save you the embarrassment of having your employer contacted by the IRS in an effort to seize a portion of your wages.
Discover Other Financial Insights
Hopefully, this article has helped you understand a bit more about wage garnishment and situations under which the IRS garnishes wages.
Be sure to browse through our other insightful articles about finding financial health and peace whether you have debts to pay, want to live a more meaningful life, or save for the future.
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