How and When the IRS Will Garnish Your Wages

wage garnishment

If you’ve received notices from the IRS, you may be worried the agency will soon come after your assets. It’s stressful to face the potential consequences of not paying taxes, such as penalties, legal trouble, or wage garnishment.

But when will the IRS garnish wages? Can the IRS garnish wages without warning? And how do you know if the IRS will garnish your wages?

The IRS may take this significant step if you haven’t taken any action to try to rectify your tax debt, whether by paying it off or contacting the IRS about a payment plan or other type of tax relief. The IRS garnishes wages to cover what you owe if you continue to ignore notices or fail to pay.

Find out what wage garnishment entails, the notices you’ll receive prior to wage garnishment, how to prevent it, and other details about how it works.

The IRS Wage Garnishment Process

It’s first helpful to walk through the process of wage garnishment and what that may look like for you. The IRS has the legal right to try to collect taxes owed in the form of asset seizure, also known as levies. 

The first step is when you fail to pay your tax debt by the deadline. If you receive a notice about taxes owed, and you ignore this notice, the IRS will continue its collection actions to try to get you to pay. If you continue to be unresponsive, the agency may file a federal tax lien, which indicates to other creditors that they have a stake in your property. If they pursue a levy, this means they plan to seize your assets to cover your debt—which may include real estate, financial accounts, and even your wages. 

But the law puts strict guidelines in place about what the IRS can and can’t do in this process. After you receive an initial notice about what you owe and a Demand for Payment, the IRS must eventually send you a Final Notice of Intent to Levy and a notice regarding your hearing rights. The IRS must send you these last two documents at least 30 days before they can start wage garnishment.

The IRS isn’t subject to typical wage garnishment laws, so it can usually seize a larger portion of your income to cover your tax bill. When you’re afraid of what will happen if you’re facing wage garnishment, make sure you talk to a tax professional right away for assistance in resolving your issue.

When Does the IRS Garnish Wages?

The first trigger for this process is your failure to pay taxes; next comes notices; and finally, the IRS will let you know that it is intending to levy your wages or other property if you don’t act within 30 days. Note that if a revenue officer gets involved with the case, the process could move more quickly.

So, can the IRS garnish wages without notice? How many notices does the IRS send before garnishment? 

The good news is that the IRS won’t seize your assets without plenty of notice. These are the different notices you’ll receive from the IRS prior to wage garnishment:

  • CP14 Notice: This is the initial notice the IRS sends you about the taxes you owe after you’ve missed the deadline. This will include your full balance, including any penalties and interest, and when payment is due.
  • CP501 Notice: This is the Remainder of Balance Due notice that will come next. This notice breaks down your unpaid tax balance, the applicable tax year, penalties, interest, due dates, and how to remit payment.
  • CP503 Notice: This next notice is the Second Notice of Balance Due, which will indicate the same information as well as more urgency. The IRS outlines the next actions they’ll take if you don’t contact them about a plan to rectify your taxes or pay what you owe.
  • CP504 Notice: This fourth and final notice indicates the IRS’s intent to levy your assets because of your outstanding balance. This notice explicitly states that if you fail to pay what you owe immediately, the IRS may levy your income, bank accounts, or property, and that they can file a Notice of Federal Tax Lien against your property. However, you’ll receive another Intent to Levy notice that notes your right to request a hearing before the agency moves forward with garnishment.
  • LT11 or Letter 1058: You may also receive this notice if the IRS hasn’t received payment for overdue taxes. This notice also includes your rights to appeal the IRS’s intended actions. 

When you get a notice that says you have 30 days and the right to request a hearing, you must act within that time frame, and if you don’t, the IRS will contact your employer and start garnishing your wages. If you respond during the 30 days, you will usually be able to set up payments or make other arrangements. 

No matter the stage you’re in within this process, take action now and don’t ignore any IRS notices. Talk to a tax expert at Seattle Legal Services to find out what options you have to avoid wage garnishment.

Exceptions to the 30-Day Deadline

There are only a few exceptions to the 30-day notice requirement. If the IRS thinks that the tax collection is in jeopardy, they can seize assets or garnish wages without warning. Also, if you’re dealing with a disqualified employment levy, the IRS can garnish without warning. That said, if the agency doesn’t give you adequate warning as outlined in the Tax Code, you may be able to stop the garnishment based on that fact.

How to Stop a Wage Garnishment

There are also circumstances in which the IRS must stop wage garnishment, including:

  • The time to collect the debt expired prior to the IRS issuing a wage garnishment notice.
  • You weren’t given a full 30 days to respond to the IRS notice.
  • You are under consideration for an offer in compromise or installment agreement during an appeal.
  • You have declared bankruptcy.

Additionally, the IRS states that if the levy is creating a financial hardship, you may call the number on your notice right away to explain your situation. The IRS may decide to “release” the levy if it is “creating an immediate economic hardship.” Note, however, that this doesn’t necessarily forgive your debt. It just means the IRS will work with you to come up with a payment plan or settlement to help you avoid the hardship.

How Much of Your Paycheck Can the IRS Garnish?

The big question for many taxpayers then becomes: How much of your paycheck can the IRS garnish? The exact amount the IRS will garnish will depend on your circumstances. Factors the IRS considers include your income level, disposable income, if any, and your number of dependents.

This table provided by the IRS makes it easy to view the amount exempt from wage garnishment. For example, single filers with one dependent have a monthly exempt amount of $2,050.01 in 2024. Joint filers with zero dependents have a monthly exempt amount of $2,433.33.

Find out more about how much the IRS is likely to garnish and get in touch with a tax expert.

Types of Income the IRS Can Garnish

Also note that the IRS can seize other forms of income outside of your regular wages. Here is a full list of what the IRS can levy as far as your pay:

  • Wages or salary 
  • Sales commissions
  • Bonuses
  • Retirement account distributions
  • Pension payments
  • Social Security income
  • State or federal tax refunds

This is income that you rely on for your everyday expenses. The last thing you want is for the IRS to seize any of it. 

How to Prevent IRS Wage Garnishment

Fortunately, even if you have received notices about an intent to levy, you can still take certain steps to avoid wage garnishment. Here’s what to do:

Pay as Soon as Possible

The most sure-fire way to avoid wage garnishment is to pay off your tax bill when you get a notice. This way, you’ll also avoid building penalties and interest, which can add up quickly and multiply your tax bill. Prioritize paying off your tax balance whenever possible.

Don’t Ignore IRS Notices

Act quickly when you receive an IRS notice of any kind. Don’t think that the issue will just go away or that the agency won’t notice if you don’t do anything. The situation only gets worse and more expensive if you continue to do nothing.

Set Up a Payment Plan

The IRS allows taxpayers to set up a payment plan, or installment agreement, when you can’t afford to pay your tax bill in one lump sum. This is an option if you just can’t afford the full amount but can pay it off monthly. You can apply online or contact the IRS using the information provided on your notice to request a plan.

File an Appeal

If you don’t agree with the information the IRS has sent you, including the amount owed or other details provided, you can file an appeal. However, you must be within the 30-day period from the date of the notice to request an appeal and associated hearing to discuss the situation with the IRS. If you miss the 30-day deadline, you can still appeal, but by that point, the garnishment may already be in place and your options will be more limited.

Negotiate with the IRS

You have other options outside of a payment plan in some cases. Here are additional ways the IRS may agree to pause collections or settle what you owe:

  • Offer in compromise: Not all taxpayers will qualify for this type of offer. However, if you can’t afford your tax bill, you can send in an offer to the IRS explaining and showing why this is all you can afford to pay them. They may accept the offer if they don’t think they can collect any more than that amount from you. 
  • Partial payment installment agreement (PPIA): This form of payment plan will allow you to pay your agreed-upon monthly payment until the end of the collection statute expiration date (10 years), and at that time, the IRS will not be able to collect the rest of the balance owed.
  • Currently not collectible (CNC) status: If you’re dealing with a hardship that’s getting in the way of your ability to pay, you can let the IRS know. If they agree, they may put your account in CNC status to temporarily delay collections. You will eventually have to pay your balance, however, unless you stay in this status until the statute expires after 10 years.

If you’re interested in negotiating something with the IRS, contact the agency right away per what the notice indicates. If you do so within the 30-day time frame, you could avoid wage garnishment.

Talk to a Tax Expert

Another important step is talking to a tax professional about your situation. They will be able to tell you the rights you have, requirements the IRS must follow surrounding levies, what the steps are within the wage garnishment process, and ways you can avoid these drastic measures.

Getting Help When Facing IRS Wage Garnishment

As soon as you receive an IRS notice about an overdue balance, take action. If you don’t, you will continue to receive notices that outline your overdue balance and building penalties and interest on your account. Even if you can’t pay off what you owe right now, you can contact the IRS about setting up a plan, whether an installment agreement or offer in compromise.

Seek professional help when you’re facing an IRS levy on your property. This is no small matter, and you want to avoid the IRS taking your financial assets, such as wages or other forms of income. 

The team at Seattle Legal Services is here to help you throughout this process. Our experienced legal team can help you set up a solution with the IRS to get your tax bill paid off, and we will help break down the law so you understand your obligations and rights. We also help with tax audits, unfiled tax returns, tax appeals, and tax relief forms. 

Contact Seattle Legal Services to get started now.

FAQs About IRS Wage Garnishment

When Does the IRS Start Garnishing Wages?

The IRS will only proceed with tax levies and wage garnishment after they have sent you multiple notices in the mail, indicating that you owe taxes and that penalties and interest charges are building. After the fourth notice, the IRS could levy your wages.

How Long Does It Take for the IRS to Garnish Wages?

It will usually take months from the time the IRS sends you the first notice of payment owed until wages are seized. This gives you time to come up with payment or to set up some kind of relief option or payment plan with the agency.

Does the IRS Send You a Letter Before They Garnish Your Wages?

Yes, the IRS sends out several notices when you owe them money, including CP14, CP501, CP503, and CP504. Follow the instructions on these forms closely to pay off your amount, request an appeal hearing, contact the IRS with questions, or apply for a different payment option, such as an installment agreement.

How Much of Your Paycheck Can the IRS Garnish?

The IRS usually cannot take every penny of your wages, but limits will depend on your filing status, number of dependents, and other particulars about your financial situation. Talk to a tax expert when you’re not sure what to expect.