When you owe money to the IRS and they feel that they have run out of options on collecting the money that you owe, they will deduct money from your paychecks until your debt has been paid. The IRS uses this tax collection method (also called a wage levy) after sending multiple letters and notices that taxes are owed. Wage garnishments can cause great hardship to those whose paychecks are being reduced by the IRS.
It is always best to work with the IRS if you are notified that you owe back taxes. Do not ignore their notices. Although they attempt to leave you with enough money to pay your bills, this does not always happen. The IRS can actually garnish close to 80% of your wages until your debt has been paid.
The IRS can garnish salaries, bonuses, wages, commissions, pension earnings, retirement money and properties. They are required to send you a final notice of their intent to garnish your wages as well as details about your right to have a hearing at least 30 days before they will begin to garnish your wages or seize property.
Of course, you can avoid a wage garnishment by filing and paying your taxes every year. If you cannot afford to pay the IRS, you must stay in contact with them to arrange a payment agreement. If you have questions or get into trouble with the IRS, it’s a good idea to work with a tax professional right away. Tax professionals can help you make sense of IRS notices as well as negotiate with the IRS on your behalf.