We’ve all heard those horror stories about the IRS randomly draining bank accounts, seizing houses and assets, and garnishing wages. Wage garnishment and asset seizure just don’t happen on a whim; it is usually a measure of last resort for the IRS when all other means have failed. Here’s a look at some of the myths behind wage garnishment in particular.
1. I won’t receive any notice at all. Although the IRS isn’t legally obligated to inform you when they will begin garnishing wages, you will have received several notices from the IRS at this point. A Notice of Intent to Levy is issued beforehand, warning you of intent to levy income and assets if an outstanding tax debt isn’t paid or if payment arrangements haven’t been made.
2. My manager has to tell me if my wages are going to be garnished. Once your employer receives instructions to garnish your wages, they must comply immediately. Your employer is under no legal obligation to let you know if/when your wages are being garnished.
3. The government has to allow enough room in my paycheck so I can cover my expenses. Unfortunately, the government doesn’t have to take your other expenses into consideration. As a rule of thumb, you can legally be left with $200 on each paycheck if you’re single or $300.00 if you’re married.
4. I can get fired if my wages are garnished. You’re safe if you have just one garnishment. However, if you have two garnishments, your employer can legally terminate you if they choose to.
5. I’m toast. I can’t stop wage garnishment from happening once I get a final notice. Good news. You have up to 30 days to respond to the final notice. If you haven’t done so already, now is the time to line up a qualified tax advisor who can review your case, determine your eligibility for repayment arrangements, and represent you in negotiating with the IRS and state tax boards.
Don’t wait until the last minute to respond. Contacting the IRS or state tax board can be nerve-wracking, but if you demonstrate a good faith effort to take care of your tax debt, that can go in your favor. Be proactive, contact the IRS or state tax board that issued the notice, and begin to put that chapter in your life behind you.
A qualified tax pro can help. Don’t go it alone. We have Enrolled Agents who can help. Get started today by clicking the white “Start Chat” button at the top of your screen.