Taxes are a major issue for the tax payers when IRS comes into question. It is generally the case that the IRS is not very lenient in forgiving taxes of the tax payers. The financial conditions of the taxpayers are not taken under consideration by the IRS. As such if you owe taxes on your debts you are required to pay them back. If you default on the taxes you can be fined, put under bars or penalized in other ways.
One of such tools used by IRS is Wage Garnishment. IRS can use it to collect the taxes you owe to them. However you can stop IRS garnishment with some help and prior thoughts:
- You can plan out a repayment plan with the IRS directly if you think you cannot pay your taxes. They may even ask for your take home pay, owned properties or your paycheck if you cannot pay back. It is therefore better that you ask for a payment plan through which you can pay with affordable installments.
- If the IRS notifies you regarding garnishing your wages, take steps immediately. The notice will specify that IRS will herewith take away most of your take home pay to clear your IRS tax debts. They may allow for some amount of exemptions but that will not be much. Therefore do not wait for the notification to arrive. Try paying of most of your debts so you can avoid wage garnishment later.
- Get professional assistance from a tax debt attorney of your state. Conduct a market research to find out a reputable law firm that is capable of handling your case. Make sure the initial consultation is free of cost and the fee structure is affordable. If you think the company profile then reliable consult your case with a tax attorney. Depending on your financial situation there are various options available. You may be eligible for a reduction in the amount of taxes you owe (offer of compromise) or a payment plan.
- Your tax attorney may also refer your case to a bankruptcy lawyer if your financial situation is severely hampered. Know the fee structure and consultation charges before you start working with the company. This will help you to avoid any financial issues with the company later.
- The last resort can be to declare bankruptcy. Bankruptcy filing may not eliminate your tax debt, but it will free all garnishment. For availing them you need to meet the eligibility criteria for Chapter 7 and Chapter 13. The bankruptcy trustee will take care of your debts and chalk out payment plans likewise. They can also put you into a payment plan from where a part of your payments will be paid to the IRS. This process will help in putting a stop to all interest and fees stop on your debts and taxes.
Moreover in order to make this process active the IRS also needs to extend support by lifting the garnishment. With Chapter 7 you can discharge your unsecured debts but you will still be left with your tax debt. The garnishment will not be active while you are in bankruptcy but you can definitely get some protection afterwards.