Wage Garnishment: How It Starts, How It Works, and How to Stop It

An IRS wage garnishment, formally known as a wage levy, allows the government to legally seize a portion of a taxpayer’s paycheck to satisfy unpaid tax debt. Unlike private creditor garnishments, IRS wage levies are not capped by state law limits and can take a substantial portion of income. Once initiated, a wage garnishment continues until the tax debt is resolved or the levy is released. Understanding how wage garnishments begin and what options exist to stop them is essential for protecting income and maintaining financial stability.

How IRS Wage Garnishments Begin

Wage garnishments do not happen without warning. The IRS must first assess the tax, send a series of collection notices, and issue a Final Notice of Intent to Levy along with notice of the right to a Collection Due Process hearing. If the taxpayer fails to respond or resolve the matter, the IRS can serve a wage levy directly on the employer. Once received, the employer is legally required to comply.

How Much the IRS Can Take

The IRS determines how much income is exempt from levy based on filing status and number of dependents. Unlike consumer garnishments, which typically cap withholding at a percentage of wages, the IRS allows the taxpayer only a minimal exempt amount for basic living expenses. Everything above that amount is sent directly to the IRS, often leaving taxpayers with severe cash-flow problems.

The Impact on Employment and Finances

An IRS wage garnishment can create immediate financial strain, making it difficult to pay rent, utilities, and other essential expenses. It can also strain employer relationships, as the levy must remain in place until released. For business owners, garnishments may extend to accounts receivable or other income sources, compounding the financial pressure.

How Wage Garnishments Can Be Stopped

Wage garnishments can often be stopped by taking prompt action. Filing missing tax returns, entering into an installment agreement, qualifying for Currently Not Collectible status due to hardship, or submitting an Offer in Compromise can result in levy release. In some cases, requesting a Collection Due Process hearing or appealing the levy may halt enforcement while the matter is reviewed.

Why Professional Representation Matters

A tax professional can communicate directly with the IRS, ensure procedural compliance, and negotiate the fastest path to levy release. Proper representation helps structure payment arrangements that reflect actual financial ability, prevents repeated levies, and protects the taxpayer from escalating enforcement actions.

Conclusion

IRS wage garnishments are aggressive but not irreversible. With timely action and proper strategy, taxpayers can stop the garnishment, regain control of their income, and resolve their tax debt in a structured and manageable way.