How do I get an IRS Wage Garnishment Released?

If you are reading this post, then you are probably in the unfortunate position of having the IRS garnishing your wages. This also means that you must have a tax debt. So what can be done?

You can call the IRS’ 800 number at (800) 829-1040 or you can hire an IRS tax Enrolled Agent or Enrolled Agent to represent you. If you decide to handle the problem on your own, you can expect that after waiting on hold for an hour that you will speak with an IRS representative of varying competence and compassion. The first step to getting the garnishment released is to call this number. Sometimes the IRS will release the garnishment if you just ask them. However, they will want to know how you intend to repay the debt.

A wage garnishment should not have come out of the blue. A taxpayer that owes back taxes will have received several letters including: Letter CP 504 “We intend to Levy on certain Assets” & Letter 1058 – Final Notice of Intent to Levy. The Final Notice of Intent to Levy Letter comes with a Notice of your right to a  Collection Due Process Hearing. A garnishment only occurs when the IRS has tried to get a taxpayer’s attention and not gotten a response.  If you exercise your rights, you can avoid having your wages garnished to begin with. Also please be aware that if the IRS has decided to garnish your wages, your bank accounts are susceptible to levy. A bank levy is when the IRS sends a letter to the bank instructing them to take the money out of the account and send it to the IRS to pay down someones back tax debt. A taxpayer has a limited amount of time (21 days) to get a bank levy released before the bank sends the money on to the IRS. A taxpayer does have rights and there are ways to fight a bank levy. A tax Enrolled Agent or enrolled agent can help you submit the appropriate appeals to get your bank levy released.

If your wages have been garnished, it means that you have ignored these letters for one reason or another. Most people ignore them out of fear or because they cannot afford to pay the debt back. The table at the right shows what the wage garnishment limits are. The IRS cannot take your entire paycheck.

So you have called the IRS, what now? Even if the IRS releases the garnishment, if you don’t come up with a plan on how to repay the back tax debt then they will reinstate the garnishment.  You have several options including setting up a payment plan, a non-collectible status or an Offer in Compromise.  Many people set up Installment Agreements that they cannot afford. Some don’t realize that they qualify for a hardship status called currently non-collectible. And for those that qualify an Offer in Compromise is a great way to settle your debt for less than you owe. I would not advise submitting an Offer in Compromise with out a tax professional, either a tax Enrolled Agent or enrolled agent.

All of the resolutions discussed above require that you have all of your tax returns filed. The Internal Revenue Service will not consider any type of resolution while you are out of compliance.  Compliance means that you do not have any unfilled returns and that you are current with your payments for the current year.

The tax professionals at Phoenix Financial Group can help you get your IRS wage garnishment released and get you a permanent solution to your back tax problem. Each taxpayer has different circumstances and therefore each resolution is customized for each client.

For more information about Phoenix Financial Group click here or call (888) 572-2179, email info@pfgtax.com.