How to Stop an IRS Wage Garnishment and Get Relief
Waking up to find your paycheck significantly smaller than you expected is a jarring experience. This can be a devastating blow for individuals in Houston, from hardworking real estate agents to truckers and stylists, who rely on their income to make ends meet. The realization that the IRS is taking a portion of your wages to satisfy a tax debt can feel like a direct assault on your financial security. You may be wondering how this happened, how to stop it, and how to get your financial life back on track.
You don't have to face an IRS wage garnishment alone. At Infinity Resolution, Principal and Enrolled Agent Michelle Hiller helps individuals and small business owners in the Houston, Texas area navigate these stressful situations. Her expertise can be the key to stopping the garnishment and finding a lasting solution.
What Is an IRS Wage Garnishment?
An IRS wage garnishment, also known as a wage levy, is a legal and highly aggressive collection action. It is a specific type of levy, which is the legal seizure of property to satisfy a tax debt. In this case, the “property” is your paycheck. Once the IRS issues a wage garnishment order to your employer, your employer is legally required to withhold a portion of your wages and send them directly to the IRS.
Unlike other creditors, the IRS does not need a court order to garnish your wages. The agency has the authority to do so once a tax liability has been legally assessed and a series of notices have been issued. In Texas, a state with very strict wage garnishment laws, the IRS is one of the few entities with the authority to garnish a person's wages.
The Legal Process and Warning Signs
The IRS will not garnish your wages without giving you ample warning. The unfortunate news is that many taxpayers are too overwhelmed or scared to open and read these notices, often leading to a surprise wage garnishment. The process typically works as follows:
Notice and Demand for Payment: The IRS first sends you a bill, or a "Notice and Demand for Payment," for the tax debt you owe. This is the first step in the collections process.
Series of Notices: If you don’t respond to the initial bill, the IRS will send a series of follow-up notices, typically with increasing urgency.
Final Notice of Intent to Levy: The most crucial warning sign is the "Final Notice of Intent to Levy and Notice of Your Right to a Hearing." This letter, sent by certified mail, informs you that the IRS intends to begin seizing your property—including your wages—in 30 days. This 30-day period is your last chance to take action and stop the levy from beginning.
How to Stop a Wage Garnishment Immediately
If your wages are already being garnished, you are in a crisis situation. The most effective way to stop it is to get professional help immediately. While there are a few ways to stop an active wage garnishment, they all require swift action and professional guidance.
Pay the Tax Debt in Full: This is the quickest and easiest way to stop the garnishment. Once the IRS receives full payment, they will release the levy on your wages. However, for many people, paying the full amount is simply not an option.
Prove Financial Hardship: An Enrolled Agent can contact the IRS on your behalf and submit a Collection Information Statement (Form 433-A) to prove that the wage garnishment is causing an immediate economic hardship. If the IRS agrees that you cannot meet your basic, reasonable living expenses with the amount you are left with, they may release the levy.
Enter into a Tax Resolution Agreement: This is the most common and effective long-term solution. By entering into an agreement with the IRS, you can stop the wage garnishment and find a path forward.
Long-Term Solutions for Your Tax Debt
Stopping a wage garnishment is only a short-term fix. The long-term goal is to resolve your tax debt permanently so the IRS doesn't begin collection actions again. Your options, which an Enrolled Agent can help you evaluate, include:
Installment Agreement: If you can’t pay your tax debt in one lump sum, an installment agreement allows you to make manageable monthly payments over a period of up to 72 months. The IRS will agree to a payment plan that fits your budget.
Offer in Compromise (OIC): If you are in a difficult financial situation and unable to pay your tax debt in full, you may be able to settle it for a fraction of what you owe. The OIC is an official program that can provide a complete financial fresh start.
Currently Not Collectible (CNC) Status: If you are facing a severe financial hardship and have no ability to pay your tax debt, the IRS may declare your account "Currently Not Collectible." This status temporarily halts all collections activities, giving you time to get back on your feet.
Don't Go It Alone
Attempting to navigate an active wage garnishment on your own can be an intimidating process. The IRS agents you speak with are trained to collect taxes, and without a clear understanding of your rights and all available options, you could end up in a worse situation.
An Enrolled Agent is a tax professional who is federally licensed to represent taxpayers before the IRS. Michelle Hiller, EA, has over 29 years of experience in individual and business taxes, including a deep knowledge of Texas tax law and the unique financial situations of real estate agents, truckers, and other small business owners in the Houston area.
Don't let tax anxiety and IRS collections control your life. Contact Infinity Resolution in Houston, TX, at (281) 796-1143 for a consultation today.