A wage garnishment is the process in which the Internal Revenue Service (“IRS”) deducts unpaid taxes from the taxpayer’s salary or wages.  The wage garnishment continues into effect until released by the IRS.

Generally, there are only three requirements that must be satisfied before the IRS starts a wage garnishment:

• The IRS must have assessed the tax and sent a Notice and Demand for Payment;
• The taxpayer must have neglected or refused to pay the tax;  and
• The IRS must have sent a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy.

The IRS can serve the Final Notice in person, leave it at the taxpayer’s home or usual place of business, or send it to the last known address by certified or registered mail. The taxpayer should note that the IRS is only required to send the Final Notice to the last known address.  In other words, the taxpayer does not need to actually receive the Final Notice for it to be legally effective. Many taxpayers never receive the actual Final Notice and are not aware the approaching storms of an IRS levy action.

There are defenses or exemptions to a wage garnishment. For example, the following items may be excluded from the taxpayer’s gross pay in computing the amount exempt from wage garnishment:

• Federal income tax withholding,
• Federal and state income tax liens,
• State income tax withholding,
• Social Security withholding,
• Health, car, and accident insurance premiums,
• Retirement contributions,
• Union dues,
• Court judgments (family support),
• Savings Bonds,
• Credit Union deposits, and
• Annuity deductions.

For more information or questions about your specific tax matter, please contact the office or click CONTACT US.

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