Most creditors are required to obtain a judgement detailing the amount of wages they can garnish from your paycheck. However, the Internal Revenue Service sets its own rules for how much it can garnish. The IRS will give you plenty of notice before a garnishment sets in, however, and there are ways to prevent this action from taking place.
The IRS gives ample opportunities and notice before garnishing your wages. First, the IRS will assess the tax that you owe and send a Notice and Demand for Payment if it doesn't receive a timely tax payment. If you refuse to pay or ignore the notice, they will send a Final Notice of Intent to Levy at least 30 days before they plan to levy. Once that period of time has passed, the IRS has the right to levy your bank account, wages or other property to satisfy the debt.
Most creditors are required to obtain a judgement before garnishing wages. Judgements generally dictate how much in wages the debtor can garnish. The IRS, on the other hand, doesn't need a judgement to take this action and retains its own table for how much it will garnish. The table is publicly available and determines how much of an individual's income is exempt from garnishment. The exact amount the IRS will leave depends on your wages and your family size. For example, if you are single with no dependents and earn $396 every two weeks, $242 of those wages are exempt from garnishment.
Avoiding a Garnishment
Once the IRS has enacted a garnishment, the taxpayer has very little recourse except to comply. However, there are a few situations in which the IRS must stop a wage garnishment. If the statute of limitations for your debt expired before the garnishment notice was sent, the IRS cannot collect. Declaring bankruptcy is another way to get out of a garnishment. The IRS also is required to provide you 30 days notice to respond to the garnishment notice. If this didn't happen, you can appeal the IRS garnishment.
Alternatives to Garnishment
If you can't pay your taxes, there are actions you can take to avoid wage garnishment. Taxpayers can enter into installment agreements with the IRS, which provides a flexible way to pay down your balance. Installment agreements are available for taxpayers who owe $50,000 or less in taxes. If you're unemployed, you may qualify for penalty relief, which will limit the amount of failure-to-pay penalties the IRS can charge you. If your financial situation is particularly dire, the IRS may allow you an Offer in Compromise in which they accept a discounted lump sum tax payment.
Based in San Diego, Calif., Madison Garcia is a writer specializing in business topics. Garcia received her Master of Science in accountancy from San Diego State University.