When you have a tax debt which you owe the IRS, there is a likely chance that the IRS will garnish part of your wages in what is known as “continuous levy.” If you do not respond to their request for repayment, the IRS will send a notice your employer and a major part of your paycheck will automatically go toward your tax debt balance. They can decide to take a quarter or more of your monthly income, which can mean heavy financial damage. Fortunately for taxpayers, there are many available options for how to stop IRS wage garnishment. Make a choice on which option is suitable for you so you can stop IRS wage garnishment and reduce the financial burden.
1. Pay off the debt in one lump sum
If you are financially buoyant enough, it is advisable to pay off your tax debt as soon as you find out about the wage garnishment. For the wage garnishment to commence you have to fail to reply to the IRS although, it’s possible you missed these communications. You can make payment over the phone, by mail, via money order, or online with your debit or credit card or straight out of your bank account. This is the quickest method for stopping wage garnishment if you have the means to make it happen. If you need an additional boost to pay off the IRS, you may consider selling or liquidating an asset.
It is important to note that if you have never promised to pay your debt in full before, the IRS may fully release your wage garnishment with a common promise to fully pay your tax bill within 60 days.
2. Set up a repayment plan
You can apply for a payment plan for paying off your tax debt.
An installment agreement between you and the IRS implies that you can pay off all of your debt in part installments. You make monthly payments that fit your budget depending on a financial statement or a fixed monthly amount for up to six years. Evaluate the plans and begin the process online or over the phone. The IRS will charge a user fee to your overall balance when you set up an installment agreement. If you are a low-income taxpayer, you may be qualified for a fee waiver that encompasses the user fee for your plan.
3. Settle your tax debt for less than you owe
Negotiate a payment plan that offers you the option to pay less than you actually owe.
You should go to the IRS website and complete the OIC pre-qualifier to see if you may be eligible to settle your debt for less than what you owe. If you qualify, it will lower the overall amount of tax debt you have to pay back with a legal settlement. Before the IRS will consider allowing you to use an OIC, you must file all your tax returns. If you are offered an OIC, you must also stay completely up to date on your tax for five years following. Note that if your OIC request is not accepted, you can appeal the rejection within 30 days of receiving your assessment from the IRS.
4. Declare hardship
Get in touch with the IRS and make it clear that the wage garnishment is causing you financial hardship.
If the IRS listens to your story and deems it fit that you really need the income they would take from you, they may cease the levy on your wages. However, this is not implying that you never have to pay off your tax debt. Declaring hardship will just help in buying you more time because you qualify for Currently Not Collectible status. The IRS will only continue collection actions again once your financial situation gets better. The point to note here is that you should ensure to do your research about your financial situation before you call the IRS to make the process go faster.
5. Declare Bankruptcy
File for bankruptcy to get tax debt eliminated.
You can put a stop to IRS wage garnishment if you declare bankruptcy. When you file for bankruptcy, you get an automatic stay that stops all collection actions. These collection actions include garnishment, repossession, and foreclosure. This can result in a big hit to your credit score, so make sure you do not take this option lightly. But bankruptcy can actually be a good way to get a clean break from tax debt, including back taxes.
6. Get professional help
Get in touch with a professional to help you stop IRS wage garnishment.
Having your wages levied is a complex and stressful experience. Make sure you are making the right decisions and understand all of the options available to you by seeking the assistance of a professional who knows the exact steps to take in order to stop IRS wage garnishment. A good tax professional will be able to apply his skills to leverage your financial information in such a way that safeguards you and results in a solution to the IRS Collections problem you are going through. You can also get a free consultation from a qualified tax resolution specialist to identify the right solution for your needs. Keep away from tax professionals who are not experienced in IRS collections.
7. Quit your job
Resign or switch jobs to avoid paying debts right away!
This is not the wisest option to consider when preventing IRS wage garnishment. As matter of fact, most tax professionals or experts would say you’re insane for trying this. But, because it takes some time for the IRS to file for wage garnishment with a new employer, quitting is a way to avoid paying your tax debt right away. Just bear in mind, the IRS will eventually find you and when they do, they will likely have less compassion. At a minimum, you’ll face higher penalties, which will only increase how much you owe. A candid advice is to create a game plan before you even think about putting in your two-week notice.