IRS Debt Wage Garnishment

In general terms, taking payment for an individual's debts directly from an employer (involuntarily) constitutes legal garnishment. The procedure for IRS wage garnishment for tax debts is quite similar. Most employers already deduct federal withholdings for taxes, social security contributions (FICA) and Medicaid assessments. When an individual taxpayer owes past due tax debts, the IRS may increase income deductions to pay arrearages, without the necessity of employee consent.

Removing Withholding Orders

The IRS is open to discussions designed to facilitate the payment of taxes owed. When an order of wage garnishment is in place for tax debts, the IRS seems somewhat emboldened because of the ready source of cash flow. Nevertheless, if offering a substantial lump sum payment, wage orders can be lifted. Also, if filing Chapter 13, the trustee in bankruptcy may also require mandatory wage withholdings for monthly payments of debt as a condition of plan confirmation.

An additional opportunity for removal of a withholding order pertains to changed employment. A few taxpayers successfully argue that a wage order may result in termination and, if supported by a period of full and timely payment of debts, receive permission to continue payments without notifying the employer of the employee's obligation to repay back taxes.