Can the IRS garnish my paycheck?

On: June 16, 2019

Yes. Wage Levies/Garnishments are a common means of collecting taxes from taxpayers who have an outstanding tax liability and have not responded to the IRS previously and made alternative arrangements to get current with the IRS.  An IRS levy permits the legal seizure of your property to satisfy a tax debt. It can garnish wages, take money in your bank or other financial account, seize and sell your vehicle(s), real estate and other personal property. If you receive an IRS bill titled Final Notice of Intent to Levy and Notice of Your Right to A Hearing, contact a tax professional right away. If the IRS levies (seizes) your wages, part of your wages will be sent to the IRS each pay period until:

• You make other arrangements to pay your overdue taxes,
• The amount of overdue taxes you owe is paid, or
• The levy is released.

Part of your wages may be exempt from the levy and the exempt amount will be paid to you. The exempt amount is based on the standard deduction and the number of personal exemptions you are allowed. The IRS mails Publication 1494(PDF) with the levy which explains to your employer how to determine the amount exempt from levy. Your employer will provide you with a Statement of Exemptions and Filing Status to complete and return within three days. If you do not return the statement in three days, your exempt amount is figured as if you are married filing separately with one exemption. If you have other income sources, the IRS may allocate the exemptions to the other income source and levy on 100% of the income from a particular employer. Bonuses The IRS would receive the entire bonus since the exempt amount is based on the time period that your wages and bonus are paid. For wage levy purposes, the term salary or wages includes compensation for services paid in the form of fees, commissions, bonuses, and similar items. Child Support If your employer did not include child support in your exempt amount, you should contact the IRS at the phone number listed on the Form 668-W(c)(DO) & Form 668-W(ICS). The IRS will release from levy the amount you need to pay court-ordered child support that the court ordered before the levy was received by your employer. If support is allowed, the same child cannot be claimed as an exemption for figuring the exempt amount.