Taxes may be one of life’s certainties, but that doesn’t mean we have to like it. We do have to pay them, however. The IRS isn’t something you want to mess around with.
So, what happens when you don’t, or can’t pay them? You can look forward to phone calls, letters, and eventually wage garnishments. Maybe you didn’t mean to let it get this far. Your hours might have been cut, you could have fallen ill, there may have been an accident, or maybe there was a layoff.
Either way, the taxes have piled up, and now the IRS is taking their money out of your paycheck. If you’re looking for ways to stop IRS garnishment of your wages, this guide will help you sort through the options you might have available.
Why It’s So Important
Any lost wages are going to make things hard for you, obviously. In a lot of cases, if you could afford to make tax payments, you probably wouldn’t be facing a garnishment to begin with.
Most garnishments can still be worked around, even though things will be very tight. That’s because there are laws regulating how much most creditors can garnish from your wages. This prevents them from leaving you unable to live off of your wages.
The IRS, on the other hand, doesn’t follow those laws, using their own guidelines instead. While they make allotments for basic living expenses and base it on the number of deductions you have, it’s still possible that they can take upwards of 70% of your pay.
This often leaves you unable to pay even your most essential bills, and that’s why it’s imperative to stop IRS garnishment actions as soon as you can.
Ways You Can Stop IRS Garnishment Actions
While it is possible to stop IRS garnishment actions, it’s not going to be an easy task. Some of these options might also seem less than ideal to you, but when you think about the alternative, which is really better?
Pay It Off
From all of the options available, this is the choice that’s most ideal. It’s also the one that’s probably the most unrealistic, depending on your financial situation.
You probably don’t want to create more debt by selling off assets or finding a loan from someone. However, if your tax debt is small enough, it’s wiser to pay it off in one chunk if you can. You’ll likely end up paying less in interest and penalties in the long run if you can go this route.
Make Payment Arrangements
This is your next ideal choice, financially. Sure, you’ll still be paying money out of your paycheck, there’s no getting around that. This option gives you a choice of how much that is.
There are two very good reasons why this choice is your best bet. For one, you’ll be showing the IRS and other financial institutions that you’re willing to pay your debts and work with them to take care of things. For two, you’ll be paying on your own terms, not theirs. It might still be rough, but it should more manageable.
Make a Compromise Settlement Offer
If your debt can’t be paid off in the time allotted on a payment schedule, or the payments will still be too much of a hardship, you can try this option.
They’ll likely be reluctant to take this offer at first, but that’s the whole point of a compromise. You’ll work together with the IRS to find an amount that you can pay, and they’ll accept, that will cover your debt. They’re still getting their money in the end, and that’s what matters to them.
Have Yourself Declared Financially Uncollectable
In certain cases, this could be used as an option to stop IRS garnishment actions.
If you can prove that any kind of collection would put you in an unfair financial hardship, this can temporarily stop any garnishments or collections from the IRS. It is only temporary though, as they will re-assess your situation periodically. They’ll pick back up as soon as they determine you can afford it, whether you can or not.
If you get this reprieve, use it to work as hard as you can to fix your tax situation before they do a re-assessment. Otherwise, you’ll be right back in the same boat.
Try The Bankruptcy Route
This option is less than ideal in this case, and should not be your preferred or first choice when it comes to tax debt.
The truth is bankruptcy often does not dispel tax debts, even if it does shed other financial obligations. At most, it usually just stalls the IRS until the process is complete, and then they come right back after you.
Not only that, but it has a huge impact on your credit and other aspects of your financial future. If you’ve got other debt that’s making life difficult on top of the taxes, then this may be the way to go for now. If not, then save this as a last resort.
Go Job Hopping
Essentially, this amounts to either switching jobs, or quitting a job temporarily and then being rehired later.
The reason why this is considered an option is that a garnishment is filed for that specific employer, at that specific time. If you switch jobs or quit, then the garnishment is no longer valid.
The problem is, it will only give you a couple month’s reprieve at a time. Yes, there will be a period where you won’t have to deal with any wages being taken away. As soon as the garnishments start back up, however, you’ll have to repeat the process all over again, if you’re not taking any other steps to fix the problem.
In the end, this will more than likely make things even more financially unstable than the garnishments will. It should only be used as an absolute, bottom of the barrel, no other options available kind of solution. A temporary one, at that.
Get The Right Help On Your Side
No matter what route you take to stop IRS garnishment actions, you’re absolutely going to need professional help at your side.
Without an attorney on your side, the IRS will try to pressure you into deals and payments that you can’t afford to make. They also won’t even consider some of the options presented, unless you have someone helping you make the right offers and decisions.
If you need help, we’re here for you. Schedule a free consultation today, and together we’ll find the course of action that works best for your situation.