When you live with unpaid federal tax debt, you will face certain consequences, such as the IRS enacting a tax garnishment on any source of income you may have, including your wages or salary. When the IRS enacts a wage garnishment, they apply directly to your employer for the funds. This makes many people uneasy because it means they can no longer hide their IRS problems from their employer and fear retribution, especially termination. However, you do not need to fear, because you have rights provided to you by the Consumer Credit Protection Act Title 3.
What is the Consumer Credit Protection Act Title 3?
The Consumer Credit Protection Act includes many rules and regulations for the credit industry, including the rights of borrowers. Title 3 is the part of the law that provides limits on any wage garnishments, including how much can be taken from your wages and whether or not you can be fired. The IRS is exempt from the limits placed on wage garnishment by this act, as they follow their own guidelines. However, you are still protected from termination by this act.
Your Protection from Termination
According to the law, you cannot be fired because of one instance of a wage garnishment, including that by the IRS. Even if you have other liens and levies against your property and assets, as long as you only have one garnishment from one debt, then you are safe. If your employer does terminate you due to your tax garnishment, then you have the right to take action, and your employer faces a large fine and a potential prison sentence.
What About Multiple Garnishments?
If your financial situation is so bad that you have multiple creditors enacting wage garnishments, then you are no longer protected by the federal Consumer Credit Protection Act in regards to your employment and can be terminated. However, some states have implemented their own legislation that protects you against termination even if you have multiple instances of garnishment. You will have to check with your state to see your rights.
Fix the Problem and Avoid Termination
If you are still worried that your federal tax garnishment will cause you problems with your employer, then you have ways to negotiate a tax relief settlement to get rid of the levy on your wages and other sources of income. Even if you feel safe in your job, it will still benefit you to take care of your tax debt as quickly as possible to avoid any other potential negative effects on your financial situation.
The easiest way to end a tax garnishment is to pay off your tax liability, but many people in this situation have difficulty finding the funds to do so. You have other options, including an Offer in Compromise and Installment Agreements. By working with a tax relief specialist, you can find out the options you have to finally break free of the IRS and be in compliance with your taxes.