One of the most powerful collection tools the IRS can use is wage garnishment (also known as a wage levy). Garnishment can be sudden, leaving the taxpayer with inadequate income for monthly expenses. The taxpayer also faces the risk of job loss. 
To levy income, the IRS sends a notice to the taxpayer’s employer. The IRS directs the recipient to give the taxpayer a copy of the notice immediately. The IRS can also garnish 1099 income from investments or self-employment. The levy remains in effect until the IRS releases it. Fortunately there are steps the taxpayer can take to ease an impending or existing wage garnishment:
- Respond quickly to the IRS levy notice. Fill out the form and return it to the suggested IRS address. If the taxpayer fails to meet the three day deadline, the IRS allows only one exemption for calculating the levy amount.
- Make certain the IRS is not levying more than the guideline amount. The taxpayer can verify this by checking IRS Publication 1494: “Tables for Figuring Amount Exempt For Levy on Wages, Salary and Other Income”. The IRS updates the amounts in this publication yearly.
- If the taxpayer is experiencing genuine hardship, contact the IRS immediately to get the garnishment lifted or reduced. Please refer to blog post “How To Qualify For IRS Hardship Status“.
- The taxpayer should consider other tactics if they do not qualify for IRS hardship status. These would include strategies like the installment agreement and the offer in compromise program. It is advisable the taxpayer seek the advice of a tax problem specialist.
