How to Stop Wage Garnishment & Protect Your Income from the IRS

Owing the International Revenue Service (IRS) is stressful, but those stress levels can surge once the situation turns into wage garnishment. What’s more, the IRS doesn’t need a court order to start garnishing wages, unlike private creditors. Once they’ve sent you notices and the deadlines pass without a response, the IRS has the authority to begin collecting a portion of your income.

Key takeaways

• Once the IRS starts garnishing your wages, you can stop it by proving error, establishing hardship, or getting an approved payment plan or settlement.
• To stop a garnishment before it starts, appeal or set up payments as soon as you receive the Final Intent to Levy notice.
• The best option is to avoid a wage garnishment by making payment arrangements proactively.

There are several ways to stop or prevent wage garnishments, but it’s important you act fast. The longer you wait, the harder it becomes. Here’s a quick breakdown of how to stop an IRS garnishment – then keep reading for more details.

Quick tips for stopping in-progress wage garnishments

• Appeal the garnishment.
• Establish financial hardship.
• Get approved to settle taxes for less than owed.
• Set up a payment plan that stipulates the IRS stop the garnishment.
• File for bankruptcy – may only provide temporary or limited relief.
• Talk with an attorney about personalized options.

How to Appeal a Wage Garnishment Notice

Prior to the IRS garnishing your wages, you’ll receive several notices. The IRS will inform you of your past-due taxes, urge you to contact them about payment arrangements, and inform you of their right to seize your wages or other assets. 

The last notice you receive is a Final Notice of Intent to Levy and Notice of Your Right to a Collection Due Process Hearing. This notice is your last chance to challenge the wage garnishment. At this point, you have 30 days to appeal and stop the garnishment before it starts.

When you request a CDP hearing, you get to explain why you don’t want the IRS to garnish your wages and talk about payment plans or settlements.

If you do not take immediate action to address your tax debt, the IRS will move forward with wage garnishment.

How to Stop an Active IRS Wage Garnishment

Once the garnishment is underway, there are a few different ways to stop it. Take a look at the main options: 

Pay the debt in full

The fastest way to stop wage garnishments is to pay your tax debt in full. If this is an option you’re considering, you can dip into your savings, make a credit card payment through a third-party service, or use a personal loan to clear your debt. 

Prove financial hardship

If the garnishment makes it impossible to cover essential living expenses, you may be able to get it stopped by providing financial hardship; however, that can be difficult, as the IRS already leaves taxpayers an exempt amount, and the agency expects you to be able to live on that amount. 

If you are able to prove hardship, you may be able to get your account marked as currently not collectible. To be eligible for CNC, you must prove that you’re going through financial difficulties. According to the IRS, financial hardship is when you’re unable to “meet basic, reasonable living expenses.” So if the IRS is garnishing your wages and you’re struggling to pay your mortgage or rent and buy food, you might be eligible for financial hardship.

When the IRS approves your CNC status, it puts a temporary hold on the collection efforts, including wage garnishments. Keep in mind that the CNC status doesn’t mean your tax debt is forgiven; the IRS will keep reviewing your eligibility to make payments. 

On the bright side, if the Collection Statute Expiration Date (CSED) runs out before you, you are no longer considered currently not collectible; the IRS will no longer be able to collect from you.

Get approved for a tax settlement

If the IRS agrees to a settlement, they will stop the garnishment. An OIC involves settling your tax debt for less than you owe. For example, if you owe $20,000 in tax debt, you might convince the IRS to accept $15,000 and discharge the remaining $5,000. The amount you pay will be based on your disposable income and the equity in your assets.

To be eligible for OIC:

• You must have filed all your tax returns – generally, the last five years.
• You can’t be in an active bankruptcy.
• You must be up to date on your quarterly estimated payments.

Unfortunately, the IRS rejects almost two-thirds of OICs, so if you’re considering this option, we highly advise working with a tax professional. 

Request a payment plan

IRS installment agreements are a popular option for those who cannot pay their tax debt upfront but can fit a monthly payment into their budget. It’s typically easy to get a payment plan if you request one before the garnishment starts. Once the garnishment starts, it’s still possible, but be prepared to share financial details to get approved.

Appeal with an equivalent hearing

If you miss the 30-day deadline to request a CDP hearing, you have up to a year (from the date of your levy notice) to request an equivalent hearing. You must do that with the same form used to request a CDP hearing. 

Making this request won’t stop the garnishment right away, but it will give you a chance to talk with the IRS about alternative options and why they should stop the garnishment.

Hire a tax professional

If the IRS has threatened to garnish your wages or is actively garnishing them, talking to a wage garnishment tax attorney can help approach the situation in the best way possible. Benefits of hiring a tax professional include: 

• Personalized advice based on your financial situation.
• Experience working with the IRS and detailed knowledge about their processes.
• Work directly with the IRS to take the pressure off you.
• Deep understanding of tax laws and what options are best for handling any kind of tax debt. 

While choosing a qualified tax professional, talk to a trusted friend or family member for a referral. Alternatively, if you’re ready to start the process now, you can schedule a short call with us (no strings attached). 

Frequently Asked Questions ( FAQ)

Can the IRS garnish my wages without notice?

No, the IRS must give you 30 days to respond after sending the Final Notice of Intent to Levy, and then the agency may start garnishing wages. 

Can bankruptcy stop wage garnishment? 

When you file for bankruptcy, the courts issue a “stay” which requires the IRS to immediately stop wage garnishment. Then, you may be able to discharge some of the taxes through the bankruptcy process. However, after the bankruptcy is complete, the IRS may resume the garnishment to collect the nondischargeable taxes. 

Although filing for bankruptcy can help stop garnishment, it should be a last option, especially because most types of bankruptcies don’t even discharge tax debt. Bankruptcies also stay in your credit report for up to ten years, so it’s not something you want to take lightly. 

Can quitting my job stop wage garnishment?

Quitting your job or changing employers can slow down the IRS from garnishing your wages. For instance, the IRS may take time before finding your new employer, but as soon as they realize you’re being paid, they will start garnishing your wages. Quitting your job can only provide very temporary relief, because the IRS has enough resources to find you. 

We don’t recommend quitting your job to stop wage garnishments; instead, work with a professional and find long-term solutions. 

How long does an IRS wage garnishment last?

The wage garnishment will continue until your debt is fully paid or you make an arrangement with the IRS. You can arrange for a payment plan, apply for OIC, or declare hardship. The garnishment will also stop if the tax debt expires, which happens about 10 years after assessment.

What happens at a Collection Due Process (CDP) hearing?

A CDP hearing is an informal hearing that’s often held over the phone. The hearing is conducted by an impartial settlement officer who has no prior involvement in your tax case. During the hearing, you or your tax attorney can present your financial situation, your debt, propose alternatives, or dispute the wage garnishment. 

Need Help Stopping Wage Garnishment?

When facing a threat of IRS wage garnishment, every minute counts. Whether you just received your first notice or your wage garnishing has already started, time isn’t on your side. 

At Damiens Law, we pride ourselves on giving all our clients 100% of our attention until their issue is resolved. You can trust us to review your case and determine the options you have. 

Schedule for a 15-minute discovery call ( and as always, it comes with no strings attached).