If you owe money to the IRS, you have several ways to settle your debt. The best approach is to pay the full amount owed when you submit your tax return. However, if paying in full isn’t possible, there are alternative options:

• Payment Plans or Offer in Compromise: Set up a payment plan or propose a settlement through an “Offer in Compromise.”
• Bankruptcy: Filing for bankruptcy might provide some relief, but keep in mind that tax debts are rarely discharged in a Chapter 7 case. In Chapter 13 bankruptcy, you’ll need to repay the entire tax debt.

If you don’t take any action, the IRS will begin its collection process.

How the IRS Collects Taxes

Before the IRS garnishes your wages, they will give you notice and an opportunity to make payment arrangements. However, unlike other creditors, the IRS doesn’t need to sue you or get a judgment to start the garnishment process. Instead, they will send a written notice to your employer detailing the amount owed, including taxes, penalties, and interest. This notice will also specify a deadline by which you must pay the balance in full.

If you fail to meet the payment demand by the deadline, the IRS will explore other collection methods, such as seizing assets, placing liens on your property, taking future tax refunds, and garnishing your wages.

How Much Will the IRS Garnish from My Wages?

While state and federal laws limit how much most creditors can garnish from your wages, the IRS operates differently. The tax code only specifies the minimum amount that the IRS must leave you with, based on the number of exemptions you claim. The IRS will take as much as possible while allowing you to retain just enough to cover basic living necessities. You can refer to IRS table 1494 to see how much of your wages are protected.

If you’re facing wage garnishment, Noble Pacific Tax Resolution can help you negotiate with the IRS.