Can the IRS take your paycheck?
How IRS wage garnishments work and what to do next.
- TaxSolve Editorial Team
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When you owe back taxes and haven’t set up an agreement with the IRS for the debt (using an extension to pay (ETP), payment plan, currently not collectible status, or an offer in compromise—all depending on your situation), the IRS can levy your income and assets.
What is a wage garnishment?
One of the most common forms of levy is the wage garnishment, which is when the IRS takes a portion of your paycheck to pay down tax debt. Another common levy is the bank account levy, where the IRS takes the funds in your bank account to pay your tax bill.
What will happen if I get garnished?
The IRS won’t just dip into your bank account without warning. First, they’ll send you a series of letters, including a notice and demand for payment (CP14, CP501 or CP503) and a notice of intent to levy (CP504), encouraging you to pay.
If that doesn’t work, you’ll get a Collection Due Process hearing warning (LT11), which is the last step before the IRS starts taking your paycheck. You have 15 days to respond or the garnishment order will be issued.
After the IRS issues a Final Notice of Intent to Levy, your employer will start withholding money from your paycheck to send directly to the IRS.
How much can the IRS take from my paycheck?
The IRS can garnish up to 25% of your disposable income (after taxes and other required deductions). They can also take money from your bank account and Social Security.
Can I stop a garnishment?
Wage garnishments only stop when you resolve your tax debt. Here are some of the things you can do:
- Set up an Installment Agreement. Apply for an IRS payment plan to pay your tax debt over time and avoid garnishment.
- Respond to IRS notices. Don’t ignore IRS letters or notices. Early response may prevent further action.
- Negotiate an Offer in Compromise. If you can’t pay your full tax debt, you may qualify for an Offer in Compromise (OIC), which allows you to settle for less than the full amount owed.
- Seek professional help. Work with a tax resolution expert, like TaxSolve, to resolve your tax issues and stop your garnishment.
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