Wage Garnishments: What Are They?
A court order requiring an employer to withhold a portion of a worker’s wages to settle a debt is known as IRS wage garnishment. They must be delivered to a third-party organization by employers. Until the debt is settled, IRS wages are routinely deducted from employees’ paychecks.
Child support payments, school loans, and debt commitments are common examples of IRS garnishments against wages. Employees have legal rights about what an employer may and cannot do about their income, regardless of the IRS wage garnishment.
How to look up Garnishments
- Lookup Court Records
Before the creditor may seize money from the debtor’s accounts or income for most consumer debts, such as when someone has missed payments on a bank loan, it must first get two court judgments. The first is a debt judgment, establishing the debtor’s financial obligation to the creditor. The second is a court order for a bank IRS wage levy or IRS garnishment. Both of these verdicts will be recorded in the court’s files.
If there are any “active” garnishment judgments on file, the local county court clerk where the debtor resides and works will often be able to let you know. If a researcher is familiar with the debtor’s name and the county, they can check some courts’ online databases of court judgments.
As county courts have jurisdictional limits, the garnishment order could have originated from a higher court, such as the District Court, if the debt is exceedingly significant (for example, above $200,000 – the clerk can set the maximum jurisdiction amount). It’s just a new case inquiry mechanism, but it’s still possible to search up a case.
- Check your credit
The relevant agency may begin garnishing the debtor’s earnings without a court judgment for some debts, such as student loans, unpaid IRS taxes, and child support. This implies that a search of court records will not turn up these garnishments.
However, the three main credit bureaus are likely to have received a report if the obligation is sufficiently past due. The pertinent information should be available by pulling the person’s credit report.
But not everyone has the choice to do a credit check, and you can’t look into someone’s finances without that person’s permission. The Fair Credit Reporting Act limits who can request a person’s credit report to employers, insurance underwriters, lenders, landlords, and potential creditors.
Before making a credit offer, these businesses frequently check to see whether there is an IRS garnishment since garnishments are a sign that the debtor is using bad money management.
How to Stop Wage Garnishments
- Object to the Tax Assessment
The IRS has the right to submit a replacement tax return on your behalf if you fail to do so. The replacement return could not account for your credits and deductions, reporting that you owe more money than you do. Your salary shouldn’t be garnished to pay a tax debt based on false tax information.
If you disagree with the IRS tax assessment, you can appeal to the U.S. Tax Court or the IRS Office of Appeals to contest IRS tax findings, audits, or liens.
- Eliminate Your Tax Debt
The IRS automatically removes the tax lien when the person settles their tax bill. It can take a few days after the IRS issues a release before your employer acknowledges it and stops deducting money from your paycheck.
Unfortunately, many taxpayers who owe more money to the IRS than they have in the bank are unable to pay up the whole amount of back taxes.
- Immediate Economic Difficulties
If the IRS determines that you are experiencing an immediate financial difficulty, they may potentially discharge a wage levy. This is decided for each circumstance. “Economic hardship,” according to the IRS, is when a tax burden makes it difficult for a person to cover minimal living costs.
However, a tax levy postponement due to financial difficulties could only be short. The IRS has the right to reinstate the levy and resume deducting funds from your salary if they feel that your circumstances have changed.
- Installment Contract
If you make consistent payments toward your tax obligation, the IRS may be ready to accept an individual payment plan to lift the tax lien. The person must still pay off the tax obligation, including penalties and interest, under a payment plan.
The IRS should release the lien, but payments can be paid gradually and as long as you adhere to the conditions of the installment arrangement.
- In-Compromise Offer
An offer of compromise can be your best choice if you owe more money in taxes than you are likely to be able to pay back. An offer in compromise (OIC) is a deal you make with the IRS to pay off your tax liability in a single payment or over time.
The IRS will only use this option as a last resort based on the taxpayer’s income, expenses, assets, and capacity to pay. Consult a tax attorney to learn how to resolve your tax liability through an offer in compromise.
Overall, we comprehend that dealing with creditors may be frightening and that figuring out why your earnings have been garnished can be a difficult undertaking in and of itself. You don’t need to do this on your own; a lawyer can guide you through any uncertainty you may have regarding the IRS wage garnishment of your earnings.
Your company or the payroll department will be able to provide you with further information on this. Though, if you have looked through your paychecks and are still unable to determine why your earnings have been taken, an tax attorney will be able to assist you if you’re still unclear.