IRS wage garnishments are continuous levies, meaning that they will take money out of every paycheck you receive until your tax debt is paid off. This can cause serious financial difficulties as the levy takes a large portion of your wages for months on end.
The best strategy for getting an IRS wage garnishment releases will depend on how much tax debt you have, your income, and other factors that a tax resolution attorney can explain to you.
Assuming you don’t dispute the amount you owe the IRS, an installment agreement may be your best collection alternative. You might end up paying much less each month with an installment agreement than you would during your wage garnishment.
Let’s say you earn $5,000 a month, are single with no dependents, and you owe the IRS $25,000. The IRS only has to leave you with $1,000 a month, meaning that $4,000 a month in wages is going to the IRS. You may have a very hard time paying your rent or mortgage and keeping up with other bills if you don’t do something to change this situation.
A monthly installment agreement could give a huge boost to your take-home income. Monthly payment amounts vary, but a rough guideline for taxpayers that qualify for streamlined installment agreements is to divide your balance by 72. In this case, your minimum monthly payment would be $347.
The terms of your installment agreement can vary based on several factors. You may also want to pay more than the minimum amount each month to cut down on your penalties and interest. Still, this example shows how a payment plan can be much easier to manage than a wage garnishment.
If you can borrow the money, you can get a wage levy released by paying your balance in full. You can also claim an economic hardship in certain situations, but you’ll have to show why the exemption amount you’re being given isn’t reasonable under the circumstances.
There are several other possible defenses or alternatives to the wage garnishment, including:
- The statute of limitations on collection has run out.
- You are an innocent spouse.
- You submit an Offer in Compromise that gets accepted.
- The IRS failed to follow the correct procedures during the collection process.
Consult a tax attorney to find out which option for getting the wage levy released will work best for your situation.
The Gartzman Law Firm can negotiate a levy release or prevent a pending IRS levy or wage garnishment. Use our contact form to request a consultation with an Atlanta tax resolution attorney.