Can a Tax Attorney Help with IRS Wage Garnishment?

Wage garnishment may occur for various reasons. One of those is to settle a debt for back taxes. If you’re facing Internal Revenue Service (IRS) wage garnishment, this can be a stressful time. However, a solid understanding of your rights and options can help you take control of your financial situation.

A tax attorney can be instrumental in this. They can negotiate with the IRS and help resolve your tax debt under more favorable terms.

In this article, we explore the fundamentals of IRS wage garnishment and some of the ways a tax lawyer can be invaluable to you at this time. But first, let’s make sure we understand exactly what IRS wage garnishment is.

IRS Wage Garnishment

In general, wage garnishment is when a portion of your paycheck is taken by your employer to pay off a debt. With many types of wage garnishment, your employer needs a court order to garnish your wages. For example, an employer needs a court order to garnish wages for child support or alimony.

With unpaid taxes, however, the IRS can garnish your wages without a court order. We call this IRS wage garnishment or a "wage levy." It’s a type of tax levy, which refers to the IRS’ legal authority to seize your property for the satisfaction of a tax debt. 

Other types of IRS levies may include:

• Taking money from your bank account
• Seizing and selling your property
• Garnishing a portion of your Social Security benefits

With IRS wage garnishment, your employer sends a portion of your income each pay period directly to the IRS.

How Does It Work?

Wage garnishment is typically a last resort for the IRS after other debt collection attempts have failed. Prior to garnishing wages, the IRS will likely file a tax lien, which is just a legal claim against a taxpayer’s property.

Before garnishing your wages, the IRS will send you several notices. If the taxpayer doesn’t respond or pay, the IRS will send a final notice of intent to levy (garnish) wages. This notice gives you 30 days to appeal or pay the federal tax owed.

If no resolution is reached, the IRS sends a wage garnishment order to your employer.

The employer must then withhold a portion of your wages and send it to the IRS until one of the following:

• The debt is paid off
• You make alternative arrangements with the IRS
• The statute of limitations expires

The statute of limitations for collecting a tax debt usually expires ten years from the date the tax was assessed.

How Much Will the IRS Garnish?

The amount garnished depends on your filing status and number of dependents. The IRS uses a specific exemption formula to determine the amount.

The IRS must allow you to retain enough disposable income to cover basic living expenses. As such, taxpayers earning minimum wage or close to it may have little to no wages subject to garnishment due to exemption calculations.

How an Attorney Can Help

The federal laws surrounding IRS wage garnishment are tricky to navigate. But it’s important to remember that you have rights and options.

An experienced tax attorney or wage garnishment lawyer can help you understand what the IRS can and cannot do. They’re also experienced in tax relief options that you may not be aware are available to you.

IRS Negotiations

Tax attorneys are skilled at negotiating with the IRS. They may be able to reduce the amount being garnished or stop the garnishment altogether.

Under certain circumstances, they can negotiate an installment agreement for you with more favorable repayment terms. This is essentially a payment plan that fits your budget and stops wage garnishment.

Alternatively, they might secure something called an offer in compromise (OIC) to stop wage garnishment. This allows you to settle your tax debt for less than the full amount you owe. Obtaining an OIC can be a complex process, but it might be your best course of action.

Appeals

If you believe the garnishment is unfair or incorrect, legal representation can be critical to stop wage garnishment. A lawyer experienced with tax laws can be your most important ally in the appeals process.

Financial Hardship

If the garnishment causes you severe financial hardship, a tax attorney can help you prove this to the IRS. With success, this could lead to a reduction or pause in the garnishment process.

They can identify the most compelling supporting documentation to send to the IRS with the required forms. This may include:

• Eviction notices
• Utility bills
• Medical bills
• Proof of dependents/their needs

Along with this evidence and a detailed explanation of your financial situation, your attorney will also provide assurance that your tax returns are filed and up to date.

Chapter 13 Bankruptcy

Depending on the circumstances, you may also want to discuss filing for Chapter 13 bankruptcy with an attorney. This is a big decision that may not be for everyone, but it can provide significant relief from wage garnishment.

When a taxpayer files for Chapter 13 bankruptcy, an automatic stay goes into effect immediately. This halts IRS wage garnishment and the collection of most types of debt, including credit card and student loan debt.

If this sounds like an option you may want to explore, consider speaking with a qualified bankruptcy attorney.

Future Garnishments

A tax attorney can also help you avoid future tax problems by advising you on how to stay compliant with tax laws. They can help you understand your tax obligations and how to manage your finances better.

Getting Legal Advice

It can be overwhelming to learn you may be facing IRS wage garnishment. But it doesn’t have to ruin your life.

It is, however, important you explore your options sooner rather than later. This is because the IRS can start garnishing your wages rather quickly.

Consider enlisting the help of a trusted advocate. You can share the specifics of your situation confidentially with them and determine your best course of action.

Findlaw’s directory of dedicated tax attorneys can help get you started. Just click on your state to view contact information for lawyers well-versed in wage garnishment. You can also narrow your search results by city if you prefer.

Either way, don’t go it alone. It’s critical to make informed decisions at this difficult time.