Wage Garnishment

Once the IRS becomes unwilling to wait any longer to collect the taxes you owe, they can levy your wages by issuing a wage garnishment. The most common types of IRS wage garnishments are:

  • Employee Garnishments
  • 1099 Garnishments
  • Federal Payment Levy Program (FPLP)

A Notice of  Levy informing you of the IRS wage garnishment will be mailed to you.

IRS Bank Levy

Employee Garnishments

The IRS can demand of your employer that a portion of your wages be withheld from your paycheck and sent directly to the IRS.  Keep in mind, although there is a small exempt amount that cannot be levied, this amount is often not enough to cover regular living expenses.

A garnishment upon wages is a continuous levy. It is issued only once and remains applicable to all future wages until either it is released by the IRS for cause or the debt is fully paid.

1099 Wage Garnishments

This type of garnishment applies to payments owed to non-salaried subcontractors not on the regular payroll.  A garnishment of 1099 wages is a one-time levy as opposed to a continuous levy.   The employer is required to hold up to the amount owed to the IRS.

This levy attaches to 100% of the funds not yet paid to the sub-contractor at the time the garnishment is received. The levy does not apply to future 1099 payouts.

Electronic Federal Payment Levy Program (FPLP)

This type of wage garnishment applies to government employees and recipients of Social Security payments.  This program electronically levies your federal payments paid through the Department of Treasury, Financial Management Service.  Under the Federal Payment Levy Program, the government generally withholds 15% of the wages/payments to reduce past due tax liabilities.

It takes longer to release this type of garnishment.  The levy can remain in effect for several weeks after the IRS agrees to release it due to lengthy government processing.

Releasing a Wage Garnishment

Negotiation with the IRS is required to obtain a wage garnishment release.  Possible qualifying reasons for release are:

  • You set up an Installment Agreement
  • You promise to pay the total tax debt within a certain time frame (i.e. 60 days)
  • You already paid the entire tax liability
  • You filed an amended tax return showing you do not owe the tax
  • Your monthly expenses exceed your monthly income
  • You are behind on your mortgage, rent or medical bills, etc.
  • The levy was issued due to an IRS processing error
  • The levy inhibits the full collection of the balance due

You Need Qualified Representation

Instant Tax Solutions can represent you in IRS negotiations, resolving your wage garnishment issues, and bringing your tax problems to an end.  We have an excellent success rate in the release of wage garnishments and other IRS levies like a bank levy.  It is very likely we will be able to have the garnishment released before your next paycheck.

If you have received an IRS notice of intent to levy, Instant Tax Solutions may be able to prevent the garnishment from happening and avoid further collection action.