Does the IRS Warn You Before Garnishing Wages?

Understanding IRS Wage Garnishment Procedures

The Internal Revenue Service (IRS) has the authority to garnish wages to collect unpaid taxes. However, before resorting to this measure, the IRS is required to follow specific procedures and provide taxpayers with ample notice.

IRS Notice and Communication

1. Final Notice of Intent to Levy:

Before garnishing wages, the IRS will send a Final Notice of Intent to Levy. This notice informs the taxpayer of the impending garnishment and provides details about the tax liability, including the amount owed, penalties, and interest.

2. 30-Day Waiting Period:

After sending the Final Notice of Intent to Levy, the IRS typically waits 30 days before initiating the garnishment. This period allows the taxpayer to respond, make payment arrangements, or file an appeal.

3. Exceptions to 30-Day Rule:

In certain situations, the IRS may proceed with garnishment without providing a 30-day notice. These exceptions include:

• Jeopardy Levy: If the IRS believes the taxpayer is at risk of fleeing the country or concealing assets.
• Federal Contractors: The IRS can garnish payments through the Federal Payment Levy Program.
• Disqualified Employment Tax Levy: If the taxpayer owes payroll taxes and has requested a Collection Due Process hearing.
• State Tax Refunds: The IRS can seize state tax refunds without providing a 30-day notice.

Wage Garnishment Process

1. Notice to Employer:

Once the 30-day waiting period has expired (or an exception applies), the IRS will send a notice to the taxpayer’s employer. This notice informs the employer of the garnishment and instructs them to withhold a portion of the taxpayer’s wages and send it to the IRS.

2. Wage Withholding Amount:

The amount of wages garnished is determined based on the taxpayer’s filing status, number of dependents, and income. The IRS has published a wage garnishment table that outlines the specific amounts that can be withheld.

3. Duration of Garnishment:

Wage garnishment continues until the tax liability, including penalties and interest, is paid in full. The IRS may also release the garnishment if the taxpayer enters into an installment agreement or other payment arrangement.

Taxpayer Protections

1. Right to Appeal:

Taxpayers have the right to appeal the IRS’s decision to garnish their wages. They can request a Collection Due Process hearing to dispute the tax liability or request a modification of the garnishment amount.

2. Exemption from Garnishment:

Certain types of income are exempt from garnishment, including:

• Social Security benefits
• Supplemental Security Income (SSI)
• Veterans’ benefits
• Child support payments

The IRS is required to provide taxpayers with notice and an opportunity to respond before garnishing wages. Taxpayers should carefully review any notices they receive from the IRS and take prompt action to address their tax liability. By understanding the IRS’s wage garnishment procedures, taxpayers can protect their rights and work towards resolving their tax debt.