Have you received a notice from the IRS that they will begin garnishing your paychecks in order to fulfill a tax liability that you have not paid? You are not alone.
This collection action is one of the most effective tools the IRS has for collecting money owed to them.
Legally, the IRS cannot garnish more than 25% of your weekly paycheck.
If this is happening to you, or the IRS is threatening to do so, don't panic, there are things you can do to get it removed.
The first thing you need to do is determine why your wages are being garnished.
Is it because you simply have not paid your taxes? This is generally the case, and if so, are the balances real or based on estimates? Let me clarify this point further...
There are times when individuals do not file their taxes for several years.
When this occurs, the IRS will eventually prepare your return for you based on the information they have on file.
These returns are called SFR, or Substitute For Returns, and there is an entire department in the IRS dedicated to this.
The information they use are any wages reported to them (W-2s, 1099s, Cancellation of Debt, Home Sales, etc.
), less itemized deductions or adjustments from income such as Mortgage Interest and Student Loan interest paid.
The returns that the IRS prepares for you are generally not in your best interest as they don't take into consideration any information not reported to them such as: Contributions (qualified donations), Property Taxes, Dependent Care Expenses, Unreimbursed Employee Expenses, Business Expenses, and so on.
If you discover that the IRS has prepared SFRs for you, all is not lost.
In fact, you can simply prepare your corrected returns and file them to a special department.
It may cost you a good chunk of change to have them all prepared (especially if you have multiple years), but you may end up eliminating more tax debt than you are spending to have the returns prepared.
In most cases, you will eliminate much, much more debt than you will pay to the tax preparer.
In many cases, if all the returns you have prepared show that you don't owe any money or get refunds, removing the garnishment is as simple as calling the IRS collections department and faxing them your returns.
Once they see you don't really owe them anything, they will generally remove the garnishment on the spot.
So you've prepared your returns and your tax debt has been reduced, but you still owe more than you can afford to pay.
All is not lost.
You may be eligible to set up a payment plan with the IRS called an Installment Agreement.
Once the IRS sees that you are trying to get back on track and become compliant, they will usually work with you.
If they accept your proposed monthly payment amount, they will remove your wage garnishment.
Can't afford the monthly payment amount? At this point things begin to get a bit more difficult, and you should consider consulting a tax professional with experience in these matters.
There are ways to get your monthly payment amount to be less than what the IRS requires, but it is not easy.
In addition, there are ways to not pay anything until you become more financially stable, or to settle your entire debt for a fraction for what you owe, but they are difficult.
Still having trouble getting it removed or feel like you need to consult a professional? Call Professional Tax Resolution at (877) 889-6527 and speak with a tax professional for a free consultation.
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You can also visit our website.