{"id":354029,"date":"2022-08-19T07:44:47","date_gmt":"2022-08-19T12:44:47","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/tax\/tax-problems-audits\/wage-garnishment-laws.html"},"modified":"2024-05-20T09:51:38","modified_gmt":"2024-05-20T14:51:38","slug":"wage-garnishment-laws","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/tax\/tax-problems-audits\/wage-garnishment-laws.html","title":{"rendered":"IRS Wage Garnishment Tax Laws"},"content":{"rendered":"\n
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IRS Wage Garnishment Tax Laws<\/h1>\n
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\n By J.P. Finet, J.D.<\/a> | Legally reviewed by J.P. Finet, J.D.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

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When you owe money to the Internal Revenue Service, the agency has several ways to collect.  Among these, wage garnishment is often the most feared by taxpayers. This process involves the IRS pulling money directly from your wages each month to satisfy an unpaid tax bill.<\/p>\n\n <\/div>\n\n

U.S. tax law<\/a> requires the IRS to follow a specified process whenever it tries to collect tax debts<\/a>, including when the agency attempts to garnish your wages. These rules have been put into place to protect the taxpayer. To take full advantage of these protections to stop wage garnishment, you must take action before the IRS begins garnishing your wages.
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Wage garnishment is the final step in the process of collecting back taxes. You will have better opportunities to challenge IRS findings or work out a payment deal<\/a> when you are first notified the agency believes you have unpaid taxes than you will after it has begun to pull money from your paycheck.<\/p>\r\n

IRS vs. Other Types of Wage Garnishment<\/h2>\r\n

You may already be familiar with the concept of wage garnishment as a tool that creditors use to collect the money they are owed. It’s important to understand that different rules apply to the IRS. In most cases, a creditor must get a court order to garnish the wages of someone who owes them money. This gives the individual whose wages are targeted for garnishment the opportunity to defend themselves in court.<\/p>\r\n

The IRS doesn’t need a judge to sign off on any wage garnishment to collect unpaid taxes. That doesn’t mean the taxpayer is without any protections or opportunities to contest the garnishment. Federal tax law provides several avenues for challenging any IRS determination that you owe taxes or for reducing the amounts you owe.<\/p>\r\n

IRS Wage Garnishment<\/h2>\r\n

When discussing the IRS’s power to garnish wages it helps to know that the agency doesn’t necessarily use the term "wage garnishment." That’s because it’s an issue to tax levy on your wages. A tax levy is when the government takes your property to satisfy a tax debt. In the case of a wage levy, the property seized is a portion of your paycheck.<\/p>\r\n

When Can the IRS Issue a Levy?<\/h2>\r\n

The IRS issues an income tax levy when you have an unpaid tax liability and have not made arrangements to pay your tax debt. The agency will then determine that it is the appropriate action. <\/p>\r\n

A key aspect of the IRS levy is that the property need not be in your possession for the agency to place a tax levy on it. Property that belongs to you, but is in the hands of someone else, can also be subject to levy. Because your wages are legally your property, but in the hands of your employer, the IRS can subject them to wage garnishment under a levy.<\/p>\r\n

In most cases, the IRS can only issue a tax levy after the agency has met four requirements:<\/p>\r\n

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  1. A tax has been assessed by the IRS and you have been given notice and a demand for payment<\/li>\r\n
  2. You don’t pay the tax owed<\/li>\r\n
  3. The IRS sends you a final notice of intent to levy and notice of your right to a hearing at least 30 days prior to the levy being issued<\/li>\r\n
  4. The IRS sends you advance notification of third-party contact to tell you that the agency may be contacting other parties about collecting the tax you owe<\/li>\r\n<\/ol>\r\n

    If these conditions are met, the IRS will act.<\/p>\r\n

    How Much Can the IRS Garnish?<\/h2>\r\n

    In most cases, the IRS can’t garnish all of your wages. They are required to leave you some money to live on. The amount the IRS exempts from levy is based on the standard deduction you are eligible to claim and the number of dependents you have for the tax year. However, it is not the IRS that calculates the exempt amount. That’s done by your employer.<\/p>\r\n

    To calculate the amount that is exempt from garnishment, the IRS will mail your employer a copy of Publication 1494<\/a>, Tables for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income. According to the 2024 version of the publication, if you are single and paid every two weeks, you will only be allowed to keep $561.54 each pay period. If you are married with two children, that amount rises to $1,507.70 for each two-week pay period.<\/p>\r\n

    Once it has completed its calculations, your employer will provide you with a Statement of Dependents and Filing Status to fill out. If you fail to complete your portion of the statement within three days, you will be treated as married filing separately, with no dependents. If that happens, you will only be allowed an exemption of $561.54, even if you would otherwise have been entitled to more.<\/p>\r\n

    Can I Challenge an IRS Wage Garnishment?<\/h2>\r\n

    A wage garnishment is a form of tax levy, so it must be appealed within 30 days of receiving an IRS notice of final intent to levy. The easiest way to get the IRS to remove a levy is to pay your tax bill or set up an installment agreement<\/a> with the IRS. <\/p>\r\n

    You can request an appeal in the following situations:<\/p>\r\n