IRS Wage Garnishment

Even if you have mortgage, car, credit card or student loan debt, paying every month is never something you look forward to. Unfortunately, if you don’t pay your IRS debt, your wages may be garnished.

What is Wage Garnishment?

If you owe money to the IRS and have not set up a payment plan or other arrangement, the IRS may garnish your wages. That is when the IRS can take part of your income to pay the debt.

Why Wage Garnishment Happens

If you owe back taxes and haven’t worked out a way to pay them with the IRS, they can take money from your wages or bank account or put a lien on your property. This means that the IRS can take money directly from your paycheck or bank account. Setting up a payment plan with the IRS can stop a levy.

How Wage Garnishment Works


Before the IRS takes any action to collect money from you, it has to go through certain steps to make sure you get your collections due process rights. That means the IRS can’t take money out of your paycheck without telling you first. You’ll get letters from the IRS telling you that you owe money. The IRS will send you an LT 11 or Letter 1058 if you don’t answer or pay the balance. This letter tells you that if you don’t pay the amount you owe, the IRS will take steps like a levy or lien to get the money.

You have 30 days to reply if you receive a letter that reads, “Final Notice of Intent to Levy and Notice of Your Right to a Hearing,” or something similar. In response, you can ask for a hearing or settle the debt. The IRS has 30 days to react, after which time, the IRS  has the right to garnish your salary or take money from your bank accounts.

How Much of Your Wages Can the IRS Take

The IRS can’t take your whole paycheck, but it’s not limited by a federal law that applies to other creditors and lenders who get court orders to take money from borrowers’ paychecks. The IRS figures out on its own how much of your take-home pay can be garnished and how much of your income can’t be. The calculation is based on your filing status, the number of people who depend on you, and the standard deduction. In the IRS’s exemption table, you can find the amount of your exemption.

Why Would My Wages Be Garnished?

The IRS can only garnish your paycheck if you owe back taxes and have received multiple notices requesting payment.

These notices will be to the last known address on file before the IRS will levy:

  • A notice and demand for payment (notice numbers CP14, CP501, CP503)
  • A notice of intent to levy (CP504)
  • A notice of your right to a Collection Due Process (CDP) hearing (LT11/Letter 1058), via certified mail

When you receive letter LT11/Letter 1058, you are at the last step before the IRS will start taking money from your paycheck.

Ways to Stop Wage Garnishment

Having your income levied or garnished is a terrible feeling, and it might seem like an impossible scenario. It’s not necessary to be. Because of this, I strongly advise you to call Halls Tax Relief as soon as you receive notification from the IRS that your earnings will be assessed or garnished. I will evaluate your circumstances and come up with a strategy to show that the levy or garnishment is unjustified or that it is putting you in a difficult financial position or find a resolution that fits your financial situation.