IRS Wage Garnishment

When fear takes over

During the messy divorce I went through, there were many times where I would receive a piece of mail from a lawyer or the IRS that I knew was bad news; I would often just toss these letters to the side without opening them. I promised myself that “later on” I would get to them, and sometimes ignore them for days, or even weeks. So I understand about ignoring things in hopes that they will go away or magically get better.

wage garnishment

But when it comes to the IRS, you can’t just bury your head in the sand.

The IRS can be intimidating. The IRS can also be difficult to understand. You may have started with a simple tax debt…they may have demanded a repayment plan that you could not afford. You procrastinate in contacting them…then one day you check your bank account and see a negative balance. Or someone at payroll explains that they have to levy your wages. Or maybe your bank manager calls you to tell you they have to shut down your line of credit. Then one of your customers calls you and tells you that they have to send the money they owe you to the IRS.

You’re devastated.

Wage Garnishments

The first letter you would receive is a Notice and Demand for Payment that outlines the taxes the IRS had assessed on you. If you ignore this letter, the next piece of mail you will receive is the Final Notice of Intent to Levy and Notice of your Right to a Hearing. It’s possible the letter will be sent to your home or workplace, given to you in person, or sent by certified letter with return receipt requested.

Now it’s real. Your employer will been contacted to implement an IRS wage garnishment levy, and they are required by law to withhold money from your paycheck and send it to the IRS to pay your back taxes. In addition, they will taken hold of the lump sums of money in your bank accounts. The checks you write on that money will bounce and the bank fees will roll in. You may not be able to afford your rent or monthly bills. What a disaster!

Take Action

When this happened to me, I was too overwhelmed and emotional to try to resolve this on my own, so I hired an attorney to help. I realized I couldn’t procrastinate one more second. Whether you decide to hire representation or try to take care of a wage garnishment issue on your own — here’s some of the steps that will need to be taken:

  • Contact the payroll administrator at your work to stop the wage garnishment until a hearing can be established for your case
  • Work with the IRS employee who issued the order for your wage garnishment and establishing that your prior tax returns have been filed and are in order
  • If your prior returns have not been filed they will need to be completed quickly, and with accuracy
  • Gather your financial information together for the past three months and file an IRS form 433-F to establish your cash flow situation
  • Submit a request to the IRS employee to release your wage garnishment levy, and work with them to determine the proper alternative resolution for your case
  • When an agreement is reached, the IRS will fax a release to your employer immediately, releasing the garnishment

Keep your chin up

One lesson I learned during my process was to never lose hope. It may be a long, winding path to getting your life back in order — but it’s worth the journey.