How to Prevent the IRS from Garnishing Your Wages
Are you behind paying your taxes or filing your tax returns? Has the IRS made contact with you recently and threatened to garnish your wages? Or, are you worried that this is the next step? A wage garnishment can be a very serious issue with longstanding consequences. While your employer cannot necessarily let you go because of one garnishment issue, if the IRS garnishes your wages a second time, you may not be so lucky. The IRS can garnish up to 65% of your paycheck as well as your social security checks. This can easily impact your overall financial outlook, your credit and impact your job status.
It is always best to try to prevent a wage garnishment all together. There are several ways to avoid this penalty as we have outlined below:
1. Pay off your debt
We know it sounds simple, but paying off your debt to the IRS in full is the simplest and easiest strategy for getting the garnishment immediately lifted.
2. Ask for a payment plan
You may not be aware that the IRS will grant payment plans to allow taxpayers the option of paying the tax debt over time, instead of one lump sum. This is called an installment agreement and often makes paying the debt much more feasible.
3. Settle your debt with the IRS for less than you owe
There are instances in which the IRS will grant taxpayers an offer in compromise, which means that the amount that the taxpayer owes is lessened based on what they can actually afford. This negotiation can be quite complicated so getting help is recommended.
4. Communicate quickly and clearly with the IRS
At the very first indication of a wage garnishment, you should respond to the IRS without delay. This is your best chance of negotiating a solution. On any written document sent to you by the IRS, you will be able to find a phone number – and you can just pick up the phone and call that number. There is no way that this communication will make the situation worse, so get out ahead of the problem, before they actually garnish your wages. Do not wait for additional letters; the situation will only worsen.
5. Consider Bankruptcy
This is an absolute last resort option, but can be used to get out of wage garnishment and trouble with your employer. It should be noted, however, that bankruptcy has a terribly negative long-term effect on your credit score.
If you are facing a wage garnishment, it is important to act quickly and handle the situation carefully. One additional strategy is to enlist the help of a tax relief firm so that this problem can be solved once and for all, with minimal disruption to your finances and your life. Success Tax Relief has 30 years of experience handling all types of tax issues and has a strong track record of solving or preventing wage garnishment. If you would like more information or another perspective on your tax situation, contact us today.