Wage garnishments are a common legal method of recovering overdue debt. They normally arrive in the form of a court order that instructs an employer to deduct a specific amount from an employee’s earnings for payment of an outstanding debt. In the case of a taxpayer receiving a wage garnishment from IRS, it is of utmost importance to understand precisely what it is.

The Common Forms of Wage Garnishment

The most common method used for the collection of past due debt is a wage garnishment, which can be for the recovery of:

  • Federal and State Taxes
  • Child Support /Alimony
  • Credit and Installment
  • Student Loans

Understanding the Difference: Wage Levies vs. Wage Lien

The essential difference between wage levies and liens comes down to the reality that, whereas a levy grabs an asset such as property (for taxes outstanding), a lien is a form of security against the tax debt, normally as a wage garnishment.

With that under the belt, let’s drill down to how one goes about uplifting, or to put it more accurately how to release wage garnishment.

First Up, What the Law Says

Having reviewed the circumstances surrounding the issuing of a wage garnishment order, let’s see how it can be undone in terms of the system. This entails a quick visit to the IRS to see what the rules in place suggest:

What Can I do If a Wages Levy Is Causing Hardship?

The IRS website responds with a definitive answer to a request to release a wage garnishment:
“Contact the IRS at the telephone number on the levy or correspondence immediately and explain your financial situation. Service is available from 8 a.m. to 8 p.m. local time, Monday through Friday. If the levy is creating an immediate economic hardship, the levy may be released.”

“A levy release does not mean you are exempt from paying the balance. The IRS will work with you to establish payment plans or take other steps to help you pay off the balance. To help ensure quick action, please have the fax number available for the bank or employer office that is processing the levy.”

The Correct Circumstances

The IRS is required to release wage garnishment in terms of the law, if it determines that:

  • You have fully settled the amount owing,
  • The period for collection ended before levy issue,
  • In terms of future tax collection, releasing the levy will help you pay your taxes,
  • You enter an Instalment Agreement and the terms thereof do not allow the levy to continue,
  • IRS has determined the levy prevents you from meeting basic, reasonable living expenses, causing economic hardship,
  • The value of your property exceeds the outstanding debt, and releasing the levy will not hinder the IRS ability to collect.

Practical Realities

Explore all the options, and seeking professional advice is usually the best place to start. As we said at the beginning, a wage garnishment is a nasty surprise for any person receiving them. In the right circumstances, the IRS will agree to release wage garnishments. Don’t wait until it’s too late.

Do you owe more than $10,000 in back taxes? Protect yourself. Protect your business. Contact IRS Solver for a consultation.

 

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