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Understanding Wage Garnishments
Every taxpayer’s worst nightmare is to receive a notice of wage garnishment from the IRS. A wage garnishment, also known as a wage levy, is an extreme measure taken by the IRS when a taxpayer has ignored multiple attempts to pay off their outstanding tax debt. They take a portion of your paycheck every pay period until the debt is fully paid off.
This situation might be scary when experienced first hand, but it’s not the end of the world. With a proper understanding of wage garnishments and a proactive approach towards tax obligations, everyone can navigate wage garnishments with ease. When it comes to anything related to taxes, Brightside Tax Relief is always at your service as a nationwide tax relief company committed to shedding light in these taxing situations.
When Does the IRS Resort to Wage Garnishments?
The IRS does not just wake up and decide to put a levy on your wages. Wage garnishments are usually a last resort measure taken after several attempts to collect tax debt have failed. The process involves:
1. The IRS will evaluate your tax return and determine an outstanding tax debt.
2. The IRS will then send you a Notice and Demand for Payment.
3. Failing to pay the due amount will lead to the IRS sending you a Final Notice of Intent to Levy and Notice of Your Right to a Hearing, at least 30 days before the levy.
4. If you still don’t pay or make arrangements to settle your debt, the IRS proceeds to enact the wage garnishment.
Remember, every taxpayer is entitled to a hearing, which might lead to an agreement with the IRS. But ignoring these correspondences from the IRS triggers wage garnishments.
How Much Can The IRS Take From Your Paycheck?
Many people have the wrong impression that the IRS can take as much as they want from their paycheck. But, as per the tax code, the IRS leaves enough for you to take care of your essential living expenses.
To calculate how much they will leave, the IRS considers your standard deduction and the amount claimed for exemptions for yourself and dependents. The actual amount garnished can vary greatly depending on your filing status, number of dependents, and pay frequency. Details concerning the calculations of garnishments can be found on the IRS Publication 1494.
Are Wage Garnishments Permanent?
Wage garnishments are not permanent. They will be stopped when:
1. The total tax debt is paid in full.
2. You enter into an agreement with the IRS to pay your debt, such as an Offer in Compromise or Installment Agreement.
3. You declare bankruptcy, which effectively restricts the IRS from collecting any debts.
4. The statute of limitations for collecting the debt expires.
It is preferable to sort the situation before reaching the garnishment stage. There are multiple tax relief solutions provided by Brightside Tax Relief and other financial professionals to help you handle your tax problems without crossing into the wage garnishment territory.
How Can Wage Garnishments Be Stopped?
Stopping wage garnishment is possible through several ways, such as:
1. Payment in Full: This is the simplest way to stop wage garnishments. Paying off your entire tax debt will immediately lift the garnishment by the IRS.
2. Installment Agreements: By entering into an installment agreement with the IRS to pay your tax debt over a period of time, wage garnishments can be stopped.
3. Offer in Compromise (OIC): You can negotiate an OIC with the IRS where you agree to pay a lesser amount than the total due to resolve the debt.
4. Hardship or “Currently Not Collectible” (CNC) Status: If you show to the IRS that garnishing your wages will cause economic hardship, it can temporarily stop wage levies.
5. Filing For Bankruptcy: This is a last resort. Filing for bankruptcy creates an automatic stay which can stop IRS wage garnishments. However, this doesn’t eliminate the tax debt.
Please consult a tax professional who understands how wage garnishments work before choosing a route. Wrong decisions can lead to more daunting tax issues in the future.
The Role Brightside Tax Relief in Wage Garnishments
At Brightside Tax Relief, we strive to help taxpayers across the country manage their tax problems. We know how wage garnishments can put a strain on personal finance and family life. Our team of experts will work with you, providing professional advice tailored to your specific tax situation.
Knowledge is power and understanding the basics of wage garnishments can empower taxpayers to prevent or navigate such issues effectively. Remember, wage garnishments are not the end of the world and they can be stopped with the right expertise and effort.
It is advisable to reach out to a professional tax relief company like Brightside Tax Relief to explore all available options to prevent or halt wage garnishments. Time is of the essence when facing wage garnishments, so don’t hesitate to seek assistance as soon as possible.
Final Thoughts
Negotiating with the IRS on issues concerning wage garnishments can be quite a challenging process. Thus, seeking the assistance of a tax relief professional can greatly increase your chance of successfully navigating through this financial hardship.
Always remember the valuable resource available on your side – Brightside Tax Relief. Our dedicated team of professionals is ready to assist you in every step of the way to lift the burden of wage garnishments. It’s your hard-earned money, and you deserve the right guidance to help keep as much of it as possible.
