Wage Garnishment Tips

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What is my responsibility with wage garnishments?

Your Responsibility

A wage garnishment is the second most common enforced collection method used by the IRS to collect back taxes. The IRS receives their back taxes by attaching their tax bill to your paycheck. Each pay period, your check is reduced by a certain amount.

You will receive notice of the applicable wage garnishment per pay period. It is your responsibility to keep track of how much is deducted from your paycheck, and the total amount of taxes turned over to the IRS. Keep this for your records.

Once you have calculated that the entire amount due has been collected (‘paid in full') from your paycheck, and submitted to the IRS, contact the IRS.

At this point, the IRS will release your wage garnishment.

Why do I have a wage garnishment?

Why Do I Have A Wage Garnishment?

In order to arrive at the point where the IRS has attached to (ordered a wage garnishment) against your wages, you had to have:

  • Ignored communication with the IRS
  • Not filed some previous tax returns
  • Have an overdue tax bill
Anyway you look at it, the IRS has exhausted its attempts at communicating with you regarding your back taxes. A wage garnishment, levy, is the last step in the enforced collection process and is meant to grab your attention.

What if I am self-employed?

Non-wage Earners & Wage Garnishment

If you are a self-employed individual, or someone not working as an employee, the IRS can still garnish your income. The IRS will go after your vendors, financial institutions where your investments are, and any other party responsible for paying you money. These third parties, in turn, will pay the IRS instead of you until your unpaid tax bill is paid in full.

What is a wage garnishment?

Wage Garnishment Defined

A garnishment is defined as a procedure whereby a creditor seizes your property through a third party. The term garnishment and attachment are used interchangeably throughout IRS terminology. (They mean the same thing).

If you are involved in a wage garnishment situation, the IRS would be your creditor while your property would be your wages. Wages are what you earn as an employee. They are reported on the Form W-2, which you use to prepare your income tax return.

The IRS can garnish your wages to fulfill an unpaid tax bill and leave you with just enough to meet your living expenses.

How do I appeal a wage garnishment?

Appealing A Wage Garnishment

If you dispute the wage garnishment, you will need to fill out and send the IRS Form 12153, Request for A Collection Due Process Hearing.

This must be done within 30 days after receiving notice of a tax levy being served against your wages. Your appeal will be filed with the IRS Office of Appeals. Here is a sampling of some of the issues you may discuss at the Collection Due Process Hearing:

  • Your tax bill was paid in full prior to you receiving the IRS levy notice.
  • The IRS made a procedural error regarding your assessment.
  • You would like to discuss the collection options you have
  • The tax and levy notice were both assessed while you were in bankruptcy. (You are protected by the automatic stay while you are in bankruptcy).
  • The statute of limitations has expired. This means you received your IRS levy notice after the time allowed had expired.
  • You want to make a defense based on your marital status.
  • You did not have enough time (nor the opportunity) to dispute the assessed liability.
You need to mail the form requesting a collection due process hearing to the IRS address that is printed on your levy notice.

An IRS garnishment is another term for levy. You have the same taxpayer rights as if dealing with other tax levies. Anytime, in fact, that you deal with the IRS regarding any tax matter, you are protected by the Taxpayer Bill of Rights.

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