IRS wage levies – Can you win?

An IRS wage levy or garnishment is no laughing matter.  You’ll know it’s coming down when your employer tells you it’s received an administrative garnishment order from the IRS, to tap part of your wages.  In short, that means you will not be receiving your entire pay check unless you take prompt and immediate steps.

First let’s discuss the bad news.  The bad news is that 1) you likely owe a substantial amount of back federal income taxes, which means you also owe substantial interest and penalties; 2) you likely have put your head in the sand and ignored the many efforts by the IRS to work out a payment arrangement; and, worst of all, 3) theoretically the IRS can take as much 70% of your wages.

If that is you, or even close, you might be panicking.  Not that you shouldn’t be nervous, but there is, however, some good news.  The good news is that an IRS wage levy or garnishment can be stopped.  What is required by you is a showing of financial hardship to you and/or your family.

It should go without saying, but because you are in this tight spot perhaps in the past you have failed to heed the magic words: time is of the essence.  You will need to call the IRS immediately, request the appropriate hardship form, accurately summarize your financial information and gather the proof to support your summary.

What will you have to show?  That the wage levy or garnishment would create a hardship in terms of your ability to meet basic living expenses.  This is not the missed payment for your weekend ski boat.  These expenses are those that cover your rent or mortgage, utilities, food for your family, transportation for work and school, and necessary items of this nature.

To be clear: hardship does not mean you barely paid your bills and now you only have a few dollars left.  It means you can’t meet your bills.  The IRS, of course, has wide discretion, so do not monkey around with the numbers and overstate things you cannot prove.  Be ready with your written bills, proof of lack of funds in your bank account and things like that.

The IRS is open for business hours during the week, not the weekend.  If you move with diligence, you can get the garnishment lifted immediately or reduced.  Thus, today’s featured article walks you through the steps to regain your money and your peace of mind.

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