How to Stop IRS Wage Garnishments and Take Back Your Financial Life

by Neal Frankle, CFP ®

If you need IRS tax debt relief, you might need to know how to stop IRS wage garnishments. That’s because if you owe the IRS unpaid taxes, they can take a bite out of your wages. Of course, this doesn’t happen overnight. The IRS will send you letters for months before this will happen. That’s probably the most serious step the IRS will take against you before they try to send you to jail. The IRS would much rather find a friendly solution to your debt, and this is an important point to remember. They only garnish your wages when they think they have no other option.

What Not to Do if This Happens to Youhow to stop irs wage garnishments

Understand that your employer will have to comply with the IRS wage garnishment. If they don’t, they IRS will come after them for your debts. Typically, the IRS will take 25% or more of your income. They don’t care if you are left with enough to pay your bills or not. They just want their money. In most cases, it won’t even help if you are self-employed and are structured as a Professional LLC. (Even if your husband or wife is the person who is delinquent, the IRS could still come after you. Read “Innocent Spouse” for ways to deal with that problem.)

They are forced to leave you with some money, but not much. It’s probably not going to be enough for you to survive on. Of course, they’ll continue taking their cut until your debt (plus penalties and interest) is paid.

Believe me, if you can avoid the IRS wage garnishment, do it. You’ll pay less if you come to an agreement with the IRS than if you allow the garnishment to be put in place.

Before they garnish your wages, the IRS must demand payment for a tax liability and you must have failed to respond. Then, the IRS will send you a final notice of intent to garnish your wages 30 days before it starts. This is your window to act. Again, the IRS would rather come to an agreement with you, even accept less money, rather than garnish your wages. This isn’t because they feel bad about it. It’s because wage garnishment is an expensive process that gives them a bad rap. You can use this to your benefit.

How to Get a Wage Garnishment Release

1. Assume the position.

Before you get the IRS to play nice, you have to comply with their rules. That means you have to file taxes for every year.

2. Pay them off.

Obviously, if you pay all your debts, the IRS will call their dogs off you. Borrow the money or sell an asset. Do whatever you have to do (legally) to get these guys off your back as soon as possible. You’ll live a lot longer because of the stress release.

3. Make them an offer (in compromise) they can’t refuse.

This isn’t easy to get, but it’s worth a try. Basically, this is a situation where you get the IRS to accept less than what you owe. Before going down this road, you would be smart to hire a good tax attorney who has a lot of experience dealing with similar problems.

4. Make payments.

Often you can get the IRS to agree to an installment agreement. This will give you three years to pay off your IRS debt. Even if you don’t have a great credit score, as long as you haven’t flaked on previous debts, the folks at the IRS will probably let you go this route.

5. Plead poverty.

If you can convince the IRS that the wage garnishment causes financial hardship, they might let up — at least until your financial situation improves. If you can’t pay for basic living expenses as a result of the wage garnishment, you’ll probably get them to agree to wait. This is another case where a tax professional might be helpful. They usually know the exact formulas the IRS uses to determine if you face hardships that meet their definition or not.

6. Take the job and shove it.

Understand that the IRS wage garnishment is specific to an employer. If you change employers, the IRS has to get a new garnishment, and that will take them several months. This can also work if you simply quit your job temporarily. If your employer informs the IRS that you don’t work there, the garnishment won’t be valid. Then if they rehire you, the IRS will have to go back to get another garnishment. Too bad for them. Whaaaaa.

Another tactic is to work part-time. This might reduce your income to the level the IRS thinks is basic living.

7. The nuclear option

If you file for bankruptcy it will stop the IRS wage garnishment. Of course if you go this route, it will have a major impact on your financial life. Of course, you won’t get out of IRS tax debt, but it will stop the wage garnishment for awhile.

Have you ever had an IRS wage garnishment? How did you handle it?



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{ 13 comments… read them below or add one }

mark June 24, 2014 at 1:17 AM

My monthly installment letter has stopped. Does that mean I’m in the clear with the IRS? I made my payment through official payments last month even though I didn’t get my monthly notice. Still no notice for this month. What if I stop making payments?


Neal Frankle, CFP ® June 27, 2014 at 7:25 AM

Mark, are you paid up according to the terms of the agreement? If not, I think you should talk to a qualified attorney before deciding to change the payment schedule. Just because the IRS are slobs, it won’t stop them from nailing you to the wall when they discover their mistake down the road.


john August 2, 2013 at 12:50 AM

Im being garnished. I was the perfect tennant been at the same apartment for 7yrs. I havent paid rent for the past 6 months, I dont have any money. I put on 40lbs because i cant afford to eat healthy food. I filled up my gas tank so i could goto work $60 and had $88 left for 2 weeks until I get paid again. I make $20hr.
Im thinking of selling everything I own on craigslist and disappearing.
I spoke to the IRS on the phone and told them I couldnt live like this and her reply was “why not?” I wanted to do the offer in comprimise but depression has such a tight grip on me Im not even able to function.
that bum you see on the park bench is probably me, just ignore me its my own doing and Im sorry if my being there upsets your cheery day.
What are my options? Fake iD and start a new life? Move out of country? Quit my job and shack up with a fat section 8 lady?
I fear Im at my end.


Neal Frankle August 2, 2013 at 2:42 AM

John, I can’t possibly respond with anything useful to you other than I suggest that you have faith, live one day at a time and create a gratitude list.

At this point, you don’t really have a problem – the IRS does. Find something to be grateful for today. What is it?


dick June 14, 2013 at 9:25 PM

Extortion is hidden behind what US govt calls the present income tax system…”A system of voluntary compliance by the making of a return.”
Its voluntary because the office of the collector and assessor were done away with leaving federal employees really liable for the tax.
(1) Curious about the F-u plan.
(2) Write complaint letters to the taxpayer advocate and your rep’s saying the IRS is waging war on you and you are a non-violent victim of their abuse. [They are…..what would you call out and out theft of,shelter?] Why the letters? See if you can get to CNC status. One trip point to CNC hardship is via the Taxpayer Advocate. I haven’t met a woman yet that can’t scream/squeak loudly and that door will get the oil.
(3) Start thinking beyond the IRS. Learn a lot about the original power of government from the posts for free on this website. The education won’t come overnight…because the forces of servitude propaganda have been great…but the knowledge is well worth it.


Pam May 2, 2013 at 10:02 AM

I have a wage garnishment now. Because of my husband’s business, we owed almost $100,000 to the IRS for an audit of three years – our accountant during that time has since been fired and investigated by the IRS – I hope he goes to jail. That total was from last January. We’ve PAID OFF over $45,000 of it in fifteen months. Yet they still want to garnish because the payments we are making every single month like clockwork aren’t an official payment plan. And the amount of the garnishment is not even as much – in fact, it’s not even close to it – as we’ve been paying.
That being said, what I did was what I was trying to avoid: I applied for a payment plan. I didn’t want to because the IRS makes you fill out a form that tells them what bills you pay and how much they all are, and then THEY decide how much you can pay. I did NOT fill out this form. I just told them how much I’d pay per month (the same amt we’ve been paying all along) and I’m waiting to see what they say. Meanwhile, I claimed every last person I could for the exemptions – and if you read it carefully, you’ll see that it doesn’t say to write down all the exemptions you claimed on your taxes, just all the ones you could claim. My lawyer (amazing lady – she saved us from killing ourselves and each other) told me to do that, so I hope it doesn’t come back to bite me. If I hadn’t done that, they IRS was going to leave me a grand total of $750 per month to live on. Yes, that’s right. To pay all my expenses, they were very generously leaving me $750. How can anyone live on that? How would I even pay rent/mortgage? As it happens, I’m getting divorced because of this fiasco, so this job truly is my only income. There’s no way I could live on $750/month. And STILL they would have been receiving less than what my husband has been paying them each month. (Because he’s self-employed, he can say he doesn’t draw a salary. He doesn’t, actually) The IRS is full of idiots, I’m convinced of this. Either way, I hate the effing IRS and wish them all the worst.
By the way, my lawyer has something she refers to as the “F-U Plan.” This involves putting off the IRS for ten years. After ten years, the debt goes away. I wish now that I would have done that. They lien your house, bank accts, etc. but it would be worth it just to screw them.


Ronald R. Dodge, Jr. February 13, 2011 at 1:18 PM

I never had to face wage garnishment, but I have faced being audited by the IRS cause of the fact I went for so many years without reporting cause of the fact I met the requirements not to have to report, and I expected no tax refund. As a result, in 1997, they audited me as far back as tax year 1988 (the tax year I turned 18). Given the fact I didn’t file tax returns even though I met their requirements, it didn’t start the statutory time limits, which I knew about them, but didn’t think they were going to come after me over it.

When I got the letter, I didn’t ignore it, but rather thank God, I saved all of my W-2s, so I sent them their copies of the W-2s, along with a letter of explanation. After that, I never heard from them again as I just assumed they ended the audit.

What have I changed since that audit took place?

No matter if you meet the filing requirements to not have to file a such tax return with the IRS, always file with the IRS, just so as that 3 year and now 6 year time clocks are started. Even if the return has a dollar amount of “$0.00” for both the “Gross Income” and “AGI”, do it anyhow. This way the IRS can’t come back down onto you some 30 or 40 years later for such tax years.

Back in the 1990’s, the time clocks were 3 years and 7 years, so the 7 year one had been reduced down to 6 years.

What is the difference between the 3 year and 6 year time clocks?

As a general rule, the IRS only has 3 years to audit you from the later of either the tax return due date or the date the return was filed (thus if there is no return filed for such tax year, there is no file date to start the statutory time limit for such same tax year). However, if the reported “Gross Income” on the return has omitted at least 25% of the “Gross Income” that was suppose to be reported on the tax return, then the IRS has 6 years to audit such tax returns.


Erik Morris September 4, 2011 at 3:51 AM

regarding the time clocks addressed, if I have not filed a tax return in 10+ years, how far back can the IRS go in terms of money owed, based on the clock year values?


Ronald Dodge September 7, 2011 at 10:21 AM

For any years there has been no tax return filed, they are allowed to go back to those years.

Here’s why:

If you have not filed a tax return, you have not set a File Date, thus there is no file date to apply the 3 year and 7 year time rules.

There was a time when I didn’t file my taxes even though I met the exception rules back in the late 1980’s and early 1990’s. Came 1997, they started the audit process on me for all of those years. I didn’t turn 18 until 1988, and thank goodness I had taxation in my Accounting course at the Genesee Area Skill Center (Vocational high school in the county), as I learned about that rule while in high school. On the other hand, I didn’t think it would hit me, but sure enough, the IRS tagged me with it. Hence, the oldest tax return was to be filed 9 years earlier and they still tagged me.

Good thing though about it, I kept all of my W-2’s and sent in copies of every single one of them into the IRS while also wrote in a letter explaining to them as to how I met the requirements. Guess they wondered how I was making it (or as another person had put it, I was an “under reporter”), but then I was also getting Child SSDI during most of those years too (that was until July 1994, 3 years after I had the laser brain operation done to get rid of them seizures permanently which started when I was 10 months old).

After I did that copying, explaining and sent it into the IRS, they ended their audit with me.

So as you can see, by not filing, there is no statutory time limit set in place for when the IRS must not audit for those years any more just as my own experience goes to show.

As such, I highly recommend to anyone file every single year (including helping their elders to file, even if their sole income is only Social Security), even if you (or your elders) meet the exception to not have to file. That way, the statutory time limit is put into place which starts the later of either the file date (date posted on the mail or the electronic sent date of when the IRS accepted your return) or the due date of the tax return (due date is typically April 15th, but could be later either due to Emancipation holiday or to the weekend depending on what day of the week April 15th falls on).

By filing (preferably on a timely basis), you don’t give the IRS the chance to go back some 30 or 40 years on you, which by that time, you more than likely will not be able to prove your case let alone have recollection of what exactly took place that far back.


Ronald Dodge September 7, 2011 at 10:32 AM

If the IRS audits you for those years you didn’t file including those that’s 10+ years back and find that you owe them money for those different years, they can not only apply that amount, but also the penalties and the interest charges as set for on a year by year basis from the tax due date to the present time (or should we say the time you pay them). That can add up to be a huge bill when you factor in the compounding factor of interest.

Once that is done, the only plausible recourse you may have left is to do a compromise with the IRS, which I can not say how that will turn out as I have heard of it going either way. Chances are, unless you are in very poor financial health, the IRS most likely will stick to their guns as a result of you not filing as required by law and what that indicates by not filing.


M. Randolhp Hamilton August 18, 2014 at 7:21 AM

You cannot be required to show your records to the IRS for three reasons;

1. If you are a citizen of the United States corporation, it is a violation of your 5th amendment rights to force you to testify against yourself.

2. 26 USC section 7806 ssays that Title 26, the income tax code is not law.

3. As one of the people of the united states of America, no law passed by any legislative branch of government within the united states of America applies to any sovereign people without that specific consent of each people. One of the primary reason the governments have immunity against daamges from law they pass is because the laws are just suggestions. They are not mandatory on sovereirgn people. I have not file a tax return since 1996. The IRS has made a few feeble attempts at bringin me back into the fold, but I am not as ignorant as most people (anymore, there was a time) and the IRS, a private company conducting business for the Federal Reserve Bank, a private bank, does not have any legitimate authority over people. You just have to know what to say when the iRS contact you after you stop filing. As a matter of fact, when you sign a tax return, you are testifying under penalties of perjury that you are a federal officer.


krantcents February 9, 2011 at 11:30 AM

I have never had a wage garnishment, but I have had to execute these garnishments. You are right, the IRS would rather handle it in another way. Too many people ignore the letters or do not cooperate at the early stages with the IRS. If at the very first sign of trouble or letter, the person would respond and discuss the issue it would never get to a garnishment.


Broke in OR August 14, 2014 at 10:08 AM

This is actually untrue. I have received 0 notice from the IRS saying they are going to garnish me. None. I received a letter from them that said I could apply for a payment plan, which I did and they declined. They also said I could fill out a form and ask for some of the penalties to be waived if there was a hardship, I filled out the forms, submitted all proof of my hardship ( my fathers death). That was 3 months ago. They never responded, and two weeks ago they started garnishing my wages. No notice what so ever.
They are leaving me with enough to pay my rent on my crappy little apartment & buy some food. I cannot make my car payment or car insuance, so I I’ll lose my car.


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