Any kind of IRS collection action can be overwhelming, but it’s especially stressful when the IRS garnishes your wages, and you lose a significant portion of your take-home pay.
The best approach is to proactively set up payment arrangements before the IRS resorts to wage garnishment. But if a garnishment is underway, you still have options. A tax professional can help you stop or release IRS wage garnishment and resolve your tax problems.
You don’t have to face these stressful tax problems on your own. Talk to 20/20 Tax Resolution if you’re dealing with wage garnishment or any kind of IRS tax levy. Or keep reading to learn more about how to stop wage garnishments at various stages in the collection process.
Key takeaways
- The IRS may garnish your wages if you have an unpaid tax balance and have ignored prior IRS notices about your liability.
- The final notice from the IRS before the levy goes into effect is usually LT11 or Letter 1058, which gives you 30 days to respond.
- To appeal a proposed levy, you have 30 days to request a Collection Due Process (CDP) hearing, per instructions on your final notice.
- If you don’t appeal, the IRS will notify your employer, and they must comply with the wage levy.
- Your options to stop an in-progress garnishment include requesting a payment plan, an offer in compromise, or hardship status.
How to Stop an In-Progress IRS Wage Garnishment
If the IRS is already garnishing your wages, you may be able to stop the garnishment, but it’s not always easy. To protect yourself, consider reaching out to a tax professional.
According to the IRS, the agency will stop the garnishment if you:
- Pay in full,
- Make payment arrangements, or
- Get a levy release.
Paying in full is the fastest way to stop an in-progress garnishment, but that’s not an option for most taxpayers at this point. Unfortunately, the other options can take a while, and in the meantime, you’ll have to deal with reduced paychecks. A tax professional can help you expedite the process.
Make payment arrangements to stop wage garnishment
The IRS will stop the garnishment if you make satisfactory payment arrangements on your tax debt, but it takes time for the IRS to review your request.
Typically, once a garnishment is in place, the IRS will not automatically stop it when you apply for a payment plan, an offer in compromise, or any other payment arrangements. However, the agency may stop the garnishment based on your specific situation. Again, a tax pro can be critical for helping you get levy relief.
Get a levy release
The IRS will release the wage garnishment if:
- You pay in full.
- The collection period expires, or it expired before the IRS started the garnishment.
- Stopping the garnishment will help you pay your taxes.
- You are experiencing financial hardship.
However, you must prove these issues, and that can be challenging. Tax professionals know what the IRS wants to hear and how to create compelling narratives (backed up by financial documents) that prove financial hardship.
How to request a levy release due to financial hardship
If the wage garnishment is causing hardship, contact the IRS via the number on your notice to explain your situation. The IRS will release levies if they are creating an immediate economic hardship. This means “the levy prevents you from meeting basic, reasonable living expenses,” according to the IRS.
While you will still be liable for paying your balance, the agency stops the garnishment and works with you to get the debt paid off in other ways. But remember, when you call the IRS, you’re speaking to someone who works for the agency – they have a vested interest in collecting the tax, and they don’t always cooperate with taxpayers. In contrast, a tax professional works for you.
How to Prevent a Wage Garnishment
It’s easier to prevent a wage garnishment than to stop one that’s already in progress. Before garnishing your wages, the IRS must send you several notices. The last one is called a Final Intent to Levy, With Your Right to a Hearing, and it gives you 30 days to respond before the IRS moves forward with a wage garnishment or another type of levy.
If you’ve recently received this letter, you can prevent wage garnishment by doing the following:
Contact the IRS
Don’t ignore the notice, expecting the problem to go away. Follow the instructions on your IRS collection notices to contact the IRS. They can go over your options with you. As long as you request payments or hardship relief before the garnishment starts, the IRS must pause all collection actions while they review your request.
Request a New Payment Arrangement
In the 30-day period after receiving final notice of the levy, you can set up a payment plan to get your debt paid off over time. If you stay current on the agreement, the IRS won’t pursue levies, and you can stay in good standing.
Submit an Offer in Compromise (OIC)
When you’re unable to pay your balance, and a payment plan won’t solve the problem, consider an offer in compromise (OIC). This is an offer you send in along with your financial information, showing that your circumstances don’t allow you to pay. The IRS may accept your offer and agree to settle for less.
Request Currently Not Collectible (CNC) Status
If you’re experiencing financial hardship, you can contact the IRS and alert them of your situation. They may agree to put your account in currently not collectible (CNC) status, which pauses collection actions until your financial situation improves.
File for a Hearing
Your final notice should have also outlined your right to a Collection Due Process (CDP) hearing. File for a hearing to appeal the proposed levy by sending in Form 12153, Request for a Collection Due Process or Equivalent Hearing, within 30 days. You’ll need to include the reason you’re requesting the hearing (e.g., you’re not liable for the tax or you want to make payment arrangements).
What Happens When You Contact the IRS
When you contact the IRS about your situation, be prepared to provide verification information, including your Social Security number, EIN, ITIN, tax return information, tax balance, or IRS notice details. If you’re requesting relief, have your financial details ready as well.
If the IRS agrees to release the wage garnishment, the levy could be released immediately for simpler cases, such as if you set up a payment plan to pay off your debt. More complicated situations may take a lot longer for the levy to be released, even weeks or months. Ask a tax expert when you’re not sure what to expect.
Common Mistakes for Wage Garnishment
When you’re facing wage garnishment, it’s important to take the right steps to avoid common mistakes that impede release, including:
- Ignoring IRS notices: Never ignore notices from the IRS. Doing so will only make the situation worse, including a growing tax balance and potential levies and liens.
- Missing deadlines: Read each notice carefully so you know how long you have to act. If you miss the 30-day window after receiving the final levy notice, for instance, you risk your wages being garnished.
- Not staying up to date on tax filings and payments: File your tax return and send payment by the deadline, whether for quarterly estimated taxes, payroll taxes, or annual tax filings.
- Make payment right away: If you can, pay what you owe immediately after filing. If you can’t afford the full balance, set up a payment plan or request relief through an offer in compromise or CNC status.
- Appeal if you don’t agree: Don’t assume that the IRS will figure out its mistake if you don’t agree with the balance provided. Contact the agency as soon as possible to work out the misunderstanding to avoid levies from taking effect.
- Stay proactive for future taxes: Put better practices in place for saving money for taxes, filing on time, and keeping accurate records. If you have a new balance, request a payment plan right away.
You want to do everything in your power to avoid wage garnishments and other levies. Stay proactive, act quickly, and work with a tax expert when needed.
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Estamos comprometidos a encontrar solucionesLearn MoreFAQs About Stopping Wage Garnishments
What is wage garnishment?
A wage garnishment is when a creditor makes a legal claim to your wages. Your employer withholds wages and sends them to the creditor. IRS wage garnishments are used to recoup unpaid taxes, and they’re often more severe (in terms of the portion of wages that can be garnished) than other types of garnishments.
How much can the IRS take from my wages?
The IRS can take everything except an exempt amount, based on your filing status and dependents, as outlined in Publication 1494. As of 2026, the exempt amount for a single filer with 0 dependents is $309.62 if paid weekly or $1,341.67 exempt if paid monthly. The exemption for a married filing jointly filer with two dependents is $823.07 if paid weekly or $3,566.67 if paid monthly.
Can I get my employer to stop the wage garnishment?
Your employer can only stop the wage garnishment if the IRS instructs them to stop it. Employers must comply with wage garnishment orders by law. If they don’t, they risk becoming personally liable for the tax debt.
What if my employer garnishes exempt wages?
Contact the IRS to see if they can change the wage garnishment order. Before starting the garnishment, your employer should give you a Statement of Dependents and Filing Status. If you don’t return it within three days, your employer will use the single or married filing separately status with no dependents, which can lead to exempt wages being garnished.
How is the IRS garnishing my wages if I didn’t receive a Final Intent to Levy?
The IRS doesn’t have to give you the 30-day warning if you’re dealing with a disqualified employment tax levy. That applies if you owe payroll taxes and you’ve requested a CDP in the last two years. However, it only comes into play with wage garnishment if you’re personally liable for the taxes.
Can the IRS garnish my wages for business tax debt?
Yes, if you’re personally liable for the business tax debts. You may be personally liable, for example, if the debts were from a sole proprietorship, the IRS used the alter ego theory to establish personal liability, or a Trust Fund Recovery Penalty has been assessed against you.
Can the IRS garnish my wages if I own the company?
It depends on the company’s structure and your role in it. If you’re a sole proprietor or a general partner, you don’t receive wages from the company, so the IRS cannot garnish them, but they may go after business or personal assets depending on the type of tax debt and who’s liable. If you’re an owner-member of an S-corp, the IRS can send the S-corp a garnishment notice, meaning you (as the employer) must effectively garnish your own wages.
When to Get Professional Help for Wage Garnishment
If your situation is simple, and you know what you need to do to avoid wage garnishment, you can probably handle it on your own and get back in good standing with the IRS. However, if you’re not sure what your options are, you can’t afford your tax bill, or you’re dealing with an active garnishment, it’s best to work with a tax professional.
Wage garnishment is very serious, so reach out to a tax resolution firm to help you resolve the issue. At 20/20 Tax Resolution, we develop resolution custom strategies based on your unique circumstances. We’ll help you negotiate with the IRS immediately and ensure your wages aren’t garnished or help you get an in-progress garnishment released.
Contactar con 20/20 Tax Resolution to set up a free consultation with an expert.
Sources:
https://www.irs.gov/pub/irs-pdf/p1494.pdf
https://www.irs.gov/pub/irs-pdf/f12153.pdf
https://www.hrblock.com/tax-center/wp-content/uploads/2017/06/CP90.pdf
https://www.irs.gov/pub/notices/cp504_english.pdf
https://www.irs.gov/newsroom/what-if-a-levy-on-my-wages-is-causing-a-hardship
https://www.irs.gov/businesses/small-businesses-self-employed/what-if-a-levy-is-causing-a-hardship
https://www.irs.gov/businesses/small-businesses-self-employed/levy
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