You may have heard of wage garnishments in child support and other family law cases, but did you know that the Internal Revenue Service and state departments of revenue can garnish your wages—in some cases taking your entire paycheck—if you owe back taxes?
Unfortunately for taxpayers, both the state and the federal governments have the authority to take extreme measures such as wage garnishment in cases where taxes are overdue. Unlike wage garnishments that are based on other owed debts, a wage garnishment resulting from unpaid taxes can be put into effect without a court order. Also, unlike other types of debt that have a 5-year statute of limitation on collections, government tax authorities have up to 20 years to collect back taxes.
If your family is living paycheck-to-paycheck, or you have significant expenses such as extensive medical needs, the possibility of two decades of wage garnishment can devastate your family’s current and future financial stability.
However, there are steps you can take to prevent or stop a wage garnishment after it has been put into effect. With the help of an experienced tax representative, like the dedicated team of tax professionals at Key Tax Group, you can understand why and how your wages are garnished, as well as your options to prevent or stop a wage garnishment fast.
What is a wage garnishment?
An administrative wage garnishment, or wage garnishment, is when the state taxing authority or IRS enforces collection action on a taxpayer who owes back taxes. Garnishments are aggressive and can be devastating to the taxpayer whose wages are being garnished. There are very few restrictions once one has been ordered. The Department of Revenue or IRS will garnish your wages until the full amount of your debt is cleared, often leaving you with very little of your paycheck for other expenses.
If you have been notified of a state tax or federal tax wage garnishment, contact Key Tax Group immediately. Our professional tax specialists have more than 35 years of combined experience and the knowledge needed to effectively work on your behalf.
Why a Wage Garnished is Enforced
A wage garnishment can occur for several reasons. The most common causes of garnishment include:
- Failure to respond to the state tax authority or Internal Revenue Service in a timely fashion
- Failure to file tax returns
- Owing debt each year and not making the necessary adjustments needed in order to prevent new debts from being created.
More About State and Federal Wage Garnishments
If your wages are subject to garnishment because of outstanding tax debt, it is critical to establish a resolution before a garnishment is in place, especially when the tax debt is owed to the state. If the garnishment is the result of federal taxes owed, it can be stopped or changed, but in the case of state taxes, once a garnishment is in place, in most cases it will not be lifted until either your debt is paid or the garnishment expires. Depending upon the state, up to 40 percent of your gross income can be garnished. And, when a garnishment is in place, the only hope is to petition for a reduction of 10 to 12.5 percent by submitting your financials.
Under federal law, the IRS is allowed to take the following percentages from your wages until your debt is fully paid:
- If you have a W-2, it can take all of your wages except for $197 a week
- If you have 1099 income, the IRS can take 100% of your earnings, without leaving you anything
- If you are currently receiving Social Security income, the government will take up to 15% of your check
Contact The Tax Specialists at Key Tax Group for Your Tax Solution
Despite the devastating financial consequences of a wage garnishment, there are steps that can be taken to fight back and protect your rights and your money.
Whatever the reason for your garnishment, taking immediate action can help ensure that more of your hard-earned wages end up in your bank account and not in the IRS’s coffers. By acting within 30 days of receiving the Notice of Intent, or as soon as you are aware of the garnishment, you can prevent a wage garnishment or quickly come up with an alternative to garnishment, such as filing for bankruptcy or submitting an Offer in Compromise for a negotiated settlement amount.
By contacting the tax specialists at Key Tax Group at the first indication of garnishment, we can quickly assess your tax situation and develop a plan of action that is right for your family. With the experienced and skillful tax professionals at Key Tax Group by your side, you can feel confident that we will first ensure that the alleged tax debt amount is accurate and then move forward with an aggressive course of defensive actions that will stop the IRS or your state’s Department of Revenue fast in their tracks.
Don’t wait to protect your hard-earned wages or gamble on your family’s future. If your wages are at risk of garnishment or you would like more information on how we can help with wage garnishment, contact our office today for your free initial consultation. The free initial no-obligation consultations provided by Key Tax Group are confidential and your information will never be shared with a third-party. Schedule your free consultation today and say goodbye to your wage garnishment fast.