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Can the IRS Garnish Wages?

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Can the IRS Garnish Wages?

Few agencies can strike fear into the hearts of Americans in quite the same way the IRS does.

Rumors abound when it comes to the long-arm of the IRS. One of the biggest rumors is that if taxpayers make a mistake on their tax return, the IRS will audit them. Another popular rumor is that the IRS can send you to jail for minor tax infractions.

While it’s true that making outrageous claims on your tax returns, such as donating 50 percent of one’s income to charity, will often cause the IRS to examine your return more closely, taxpayers should not be afraid to claim legitimate deductions for fear of being audited.

However, one of the powers the IRS does possess is the ability to garner wages for past-due taxes. Like any other creditor, the IRS has the ability to recover what is owed. However, unlike other creditors – which must first obtain a court judgment before garnishing wages – the IRS is not required to first get a judgment before it may garner taxpayers’ wages.

Taxpayers who are about to have their wages garnished will first receive notice from the IRS that the action is about to occur. That notice will come in the form of a written document which contains the amount owed to the IRS. The IRS is required to itemize the full amount, indicating how much is the actual tax owed, how much is penalties for failure to pay and how much of it is interest.

The notice also will include a date by which payment in full is expected. If payment is not received by the date specified on the notice, the IRS will then take action to collect the monies owed. Actions they are permitted to take include the seizure of assets, the placing of liens on a taxpayer’s property, garnishing wages or claiming future tax refunds.

While federal law limits the amount of money creditors can take directly from a person’s wages, the IRS is not subject to those same guidelines. Tax code simply dictates what the IRS must leave taxpayers whose wages they garnish. Basically, a taxpayer will be left with only what the IRS deems is necessary for the payment of their basic needs.

So what happens if you are one of those taxpayers who owe a significant amount in back taxes? Can you automatically expect to have your wages garnished?

The good news – if there is perhaps ever any good news when the IRS is involved – is that wage garnishment is usually a last resort for the IRS. Taxpayers who attempt to work with the IRS to pay what they owe will find the process a lot easier than having their wages garnished.

One of the most popular options is for taxpayers to enter into what is known as an installment agreement with the IRS. Taxpayers who agree to an installment repayment plan are seen as being in compliance, and the IRS is less likely to take a harsher course of action – like wage garnishment – to recover back taxes. The only down side to an installment plan is that interest continues to accrue on the total amount owed while taxpayers are making payments, similar to what happens when a person makes only the minimum payment on a full credit card balance.

Those who are facing the possibility of wage garnishment from the IRS may wish to consult a reliable tax relief agency or professional legal counsel to determine which option is best for them.

Proposal would provide Nebraskans with $1.1 billion worth of property tax relief in effort to make "˜The Good Life' a reality

LINCOLN - Nebraska property owners would get $1.1 billion worth of tax relief under a proposal developed by a loose-knit group this summer. State Sen. Steve Erdman of Bayard said the proposal would provide income tax credits equal to 50 percent of the ...

Published:  Wed, 18 Oct 2017 08:18:00 GMT



Trump: "˜Massive tax relief' would be "˜best Christmas present of all'

In a speech to the Heritage Foundation on Tuesday, Trump said that he wants to deliver "massive tax relief" to American families. "So let's give our country the best Christmas present of all," Trump said Tuesday. "Massive tax relief." The Republican-held ...

Published:  Tue, 17 Oct 2017 17:55:05 GMT



Nebraska proposal would give $1.1B in property tax relief

LINCOLN, Neb. (AP) - Nebraska property owners would get $1.1 billion worth of annual tax relief under a proposal that supporters say they'll push in the Legislature and as an initiative petition drive. A coalition of agricultural, business and ...

Published:  Wed, 18 Oct 2017 13:00:00 GMT



Democrats seek tax relief for Puerto Rico, Virgin Islands

WASHINGTON (AP) - A group of Democratic lawmakers are asking for tax relief for hurricane-stricken Puerto Rico and the U.S. Virgin Islands, saying people and businesses in the two U.S. territories don't enjoy the same benefits as those in the mainland.

Published:  Mon, 16 Oct 2017 15:34:00 GMT



President Trump Signs Disaster Tax Relief Bill in Wake of Hurricanes

With overwhelming bi-partisan support, President Donald Trump signed sweeping tax relief measures into law for victims of Hurricanes Harvey, Irma and Maria. U.S. citizens still recovering from the devastation of the recent hurricanes in Texas, Florida and ...

Published:  Wed, 18 Oct 2017 07:41:00 GMT



Tax relief arrives for North Bay fire-damaged properties

County tax officials are clearing the air on how much property owners will owe on real estate that was significantly damaged or reduced to ashes in the massive fires that have been tearing through Sonoma, Napa, Mendocino and Lake counties this month.

Published:  Wed, 18 Oct 2017 10:53:00 GMT



Tax relief incumbent hits the campaign trail

A day after his state's college football team whipped the Nebraska Cornhuskers, Wisconsin Gov. Scott Walker whipped up enthusiasm for Nebraska Gov. Pete Ricketts' re-election bid. Walker and the governors of Kentucky and Missouri joined Ricketts and ...

Published:  Wed, 18 Oct 2017 09:28:00 GMT



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