What Is the Percent of Wage Garnishment on IRS Back Taxes?
The Internal Revenue Service (IRS) can order you to pay back taxes if it determines that you have underpaid your income taxes. If you do not do so voluntarily, the IRS can garnish your wages -- that is, take a percentage of your paycheck each pay period until your tax bill is paid. The IRS only garnishes your wages if you repeatedly ignore its communications.
Other People Are Reading
-
Garnishment Formula
-
The IRS adds the standard deduction for your filing status and the amount of all your claimed exemptions, then divides this number by 52, to determine how much of your paycheck is exempt from garnishment. It then takes the rest of your paycheck each pay period. For example, suppose your standard deduction is $5,800 and your exemption amount is $3,600. The IRS adds these together for a total of $9,400 and divides by 52 -- $180.77 of each paycheck is exempt from garnishment and the IRS may take the rest. Depending on how much you earn, the IRS can take between 30 and 70 percent of your paycheck.
Garnishment Process
-
The IRS must send you a notice of back taxes and demand for payment before it can garnish your wages. If you ignore this notice, the IRS must send a second notice informing you of its intention to garnish your paychecks and giving you 30 days to contest the garnishment in court. After the 30 days have elapsed, the IRS may begin proceedings to garnish your paycheck. You can avoid garnishment by contacting the IRS to make payment arrangements.
-
Purpose
-
The IRS garnishes wages because taxpayers often cannot afford garnishment and are forced to contact the IRS regarding back taxes. If a taxpayer refuses to talk to the IRS after garnishment begins, the IRS will continue to get the money the taxpayer owes, so the taxpayer ends up paying the debt whether he negotiates with the IRS or accepts the garnishment.
What to Do
-
If the IRS garnishes your wages, contact an attorney who specializes in tax law. Tax attorneys can negotiate on your behalf with the IRS. The IRS may accept an agreement to pay your back taxes in installments and stop the garnishment. You can negotiate with the IRS on your own, but BusinessTaxRecovery.com does not recommend this course of action because the IRS can use your statements against you and you may end up paying a larger tax bill.
-
