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Tax Services: IRS Wage Garnishment
The threat of an IRS wage garnishment should be taken very seriously. When you receive an IRS Notice of Intent you need to contact people experienced in dealing with the IRS. Make sure that you do have all your paperwork in order and that if you have any unfilled tax returns you get them submitted as soon as possible.
With an IRS wage garnishment, if you have any bank accounts in which the money is locked in for a period of time, once the funds are garnished, you will still have to pay the bank charges or penalties associated with taking out the funds earlier. Garnishing your wages could mean that you do not have enough money left to make your mortgage payments or pay your bills and have no other choice but to declare bankruptcy.
If your salary is garnished due to an IRS wage garnishment, then the levy stays in force until you have the account paid off. There is a limit as to how much of your wages can be taken for tax payments. It is not allowed to exceed 25% of your weekly income. There are also exceptions to this rule. If you have a high-paying job and earn more than the federal minimum hourly wage, then the garnishment could be the amount by which your income exceeds thirty times that minimum hourly wage. The IRS can take everything you earn above $3.83 an hour, which wouldn't leave you with very much money. Actually, the IRS takes the lesser amount. If you support your spouse and have dependent children, the levy cannot exceed 50% of your net income, but it you are single, that percentage rises to 60%.
For more information on IRS Wage Garnishment, please visit our Frequently Asked Questions and IRS Guidelines.