When you find out that the IRS is garnishing your paycheck, your initial response may be one of shock. Reasons for wage garnishment include child support arrears, tax arrears, unpaid court fines, student loans arrears, credit card debt and other debts.
Wage garnishments are terrible things to go through. However, there are a few steps you can take to lessen the blow and remedy the situation:
1. When you first receive notice of the garnishment, contact your employer for a 668W form. List your filing status and dependents. The more legal dependents you list on the form, the more income you will get in your next paycheck. It will likely take more than one pay period to stop the levies.
2. Your tax attorney or you can contact the IRS via the phone number listed on the wage levy notice. The IRS employee will go through your monthly income, as well as your monthly allowable expenses. With these two pieces of information, the IRS will come up with the monthly disposable income. They will want you to pay the monthly disposable income before they agree to release the wage levy.
3. You can agree to pay this amount, or you may try to renegotiate another payment amount, particularly if the monthly amount is greater than your ability to pay. One option is called the Offer in Compromise, where you agree to settle for less than the original monthly rate. You could also try to prove you have no monthly disposable income, at which point the IRS may put you into hardship status. You may also file bankruptcy, which would remove the wage levy.
IRS wage garnishment is a serious matter. To assist you with this endeavor, talk to an experienced tax attorney. If you would like more information on how we can help you stop IRS wage garnishment proceedings, please call my office at (813) 229-7100 or toll-free at 888-GET-MISH.