When you cannot pay your federal taxes, then you might find yourself in a difficult situation if you do not take action. As the most powerful collection agency in the country, the IRS has the right to take collection action without a court order. When you owe money and have made no attempts to pay it, the IRS can enact a tax garnishment on your wages, salary, or other income to get the money it is owed. When you find yourself with an IRS wage garnishment, there are a few actions you should not take.
Ignoring the IRS is often what leads people to having a tax garnishment in the first place. If you continue to ignore it, then you will have your wages garnished and be left with barely any money to pay your living expenses until you have paid off your tax debt, which could be years. Therefore, as soon as you receive a letter from the IRS about their intent to impose a levy on your wages, you need to take action. You can stop the wage garnishment before or after it begins.
Quit Your Job
A tax garnishment on your wages or salary is typically job specific. Therefore, you can technically get out of the situation by quitting your job. However, this is not a good solution for many reasons. You are still responsible for the complete amount of your tax liability, including any interest and penalties. Additionally, you will no longer have any income for paying for your tax debt or your living expenses. Finally, the IRS will eventually once again find you and impose a new tax garnishment, so you will be back in the same place you are now.
Many people react to their IRS problems with their emotions, especially fear and panic. This does not let you think clearly and logically, so the problem does not find a solution. Instead, you need to keep a level head so that you can take action to stop the IRS wage garnishment and find the right tax relief settlement for your situation.
Just because the IRS has enacted a tax levy on your wages or salary does not mean you are left with no action to take. You can prevent and stop a wage garnishment by negotiation an Offer in Compromise, applying for an Installment Agreement, demonstrating a financial hardship, and other tax relief solutions.
Bankruptcy should be the last resort if you find yourself in a financial hardship, because it has long reaching implications and will impact your ability to get credit in the future. Additionally, bankruptcy only stops the wage garnishment for a period of time, and you are still liable for your federal tax debt. Therefore, it does not provide a true tax relief solution.
Try to Do Everything Yourself
There are solutions to stopping the wage garnishment and settling your tax debt once and for all. However, the application process can be complex and requires very specific information. Therefore, you should work with tax professionals to ensure that you complete everything correctly. Additionally, they can help you to not just remove or prevent the wage garnishment but to also decide upon the right action for your tax relief based upon your financial situation and ability to pay your taxes. Working with tax professionals also can help to reduce much of the stress you feel, and help you to no longer worry about the IRS taking action against you.