The Power of IRS Wage Garnishments
Few things are as financially disruptive as an IRS wage garnishment. Unlike private creditors, the IRS doesn’t need a court order to garnish your wages or seize funds from your bank account. Instead, they can bypass traditional legal hurdles and directly claim a portion of your paycheck, often leaving taxpayers in financial distress.
If you’ve received a Notice of Intent to Levy (Letter 1058 or LT11), it’s a serious warning that the IRS is preparing to legally seize your income. Many taxpayers are unaware of the full scope of IRS garnishment powers or how representation can help stop or reduce these enforcement actions.
How Does an IRS Wage Garnishment Work?
The IRS wage garnishment process is governed by IRC § 6331(a), which grants the IRS authority to levy wages, salaries, commissions, and other income when a taxpayer has unpaid tax liabilities. The levy remains in place until:
The debt is fully paid off
The IRS releases the garnishment
The Collections Statute Expiration Date (CSED) is reached (typically 10 years from the date of assessment, per IRC § 6502)
Once the IRS decides to garnish wages, they issue Form 668-W, Notice of Levy on Wages, Salary, and Other Income, to the taxpayer’s employer. Unlike private creditors who are restricted by state wage garnishment limits, the IRS uses its own calculation under Publication 1494, which determines how much of a taxpayer’s wages are exempt from garnishment. The rest goes directly to the IRS.
For reference, the Internal Revenue Manual (IRM) 5.11.5.2 states that wage levies are continuous, meaning they stay in place until the debt is satisfied or another arrangement is made. This is unlike bank levies, which are one-time seizures of funds.
The Consequences of an IRS Wage Levy
1. Continuous Wage Garnishments
Unlike one-time bank levies, an IRS wage garnishment continues indefinitely (IRM 5.11.5.2.1). That means every paycheck you receive will have a portion deducted and sent directly to the IRS until the debt is resolved. This can leave many taxpayers struggling to cover rent, utilities, and other basic expenses.
2. Limited Exemptions for Take-Home Pay
Unlike private wage garnishments that are subject to state law limitations, the IRS determines how much you can keep. Publication 1494 provides a chart based on filing status and number of dependents, but in most cases, taxpayers end up with significantly reduced income, sometimes below what is necessary to maintain a reasonable standard of living.
3. Impact on Your Employment
While federal law (15 U.S. Code § 1674) prohibits employers from firing an employee due to a single wage garnishment, multiple garnishments—especially from the IRS—could still jeopardize job security. Employers may view an IRS levy as a financial burden or an administrative hassle.
4. Bank Account Levies & Property Seizures
If wage garnishments aren’t enough to satisfy the debt, the IRS may freeze and seize bank accounts under IRC § 6331(a). This means any funds in your checking or savings account could be legally taken after a 21-day holding period. In extreme cases, the IRS can even seize real estate, vehicles, or other valuable assets.
How Tax Representation Can Stop or Reduce Wage Garnishments
If you’ve been hit with a wage garnishment, professional tax representation is critical. With professional representation, you can regain control, protect your income, and negotiate a path forward.