When you owe severely delinquent back taxes and do not resolve your debt with the IRS, the agency may collect from you through your wages. Also known as an IRS wage levy, a wage garnishment forces your employer to withhold a specific amount of your paycheck that the IRS takes to address your tax debt. This portion of your wages will be withheld each pay period until the tax balance is paid in full or a resolution is made.

The IRS can garnish a significant portion of your wages. However, certain exemptions may apply to reduce the amount taken from your paycheck. Following the exemption table, the IRS determines the garnishment amount based on:

• Disposable income
• Pay period
• Filing status (e.g., Single, Married Filing Jointly, Head of Household, etc.)
• The number of dependents claimed on your tax return.

The remaining portion of your paycheck is applied toward your outstanding tax balance. In some cases, the garnishment can create severe financial hardship, making it challenging to afford essential living expenses.

If you received a notice warning you of a garnishment, you must contact the IRS or a tax professional as soon as possible to discuss repayment or tax resolution options.

However, if a wage levy has already been applied to your paycheck, you may still be able to obtain an IRS wage garnishment release by taking the following actions.

1. Pay Your Tax Debt in Full

The fastest way to remove a tax garnishment is to pay the full amount owed. Once your tax bill is addressed, the IRS will remove the garnishment.

2. Enter an Installment Agreement With the IRS

A structured repayment plan with the IRS allows you to make manageable monthly payments toward your tax debt instead of paying it all at once. In many cases, setting up an installment agreement can lead to the release or reduction of the wage garnishment.

3. Submit an Offer in Compromise (OIC)

An Offer in Compromise is a settlement in which the IRS accepts a lower amount than what is owed based on the taxpayer’s inability to pay the full balance. It can significantly reduce tax liability, but is challenging to qualify for and requires documented proof of financial hardship. Taxpayers are also expected to pay the new offer balance within the deadline to remain compliant with the IRS, or the offer will fall through. 

If you believe an Offer in Compromise could help your situation, consulting with a tax professional to understand the qualification requirements is highly recommended. Because the eligibility process is rigorous, leveraging the help of a professional may also increase the chance of your offer being accepted.

Allowing a wage levy to continue will harm your overall financial stability. Professional assistance can make a significant difference if you are facing IRS wage garnishment.

At TaxRise, we help hardworking taxpayers remove their garnishment and address their tax bill through personalized solutions. Call us at 833-419-RISE (7473) or schedule a free consultation with a tax expert and explore your options today.