How would I know if my wages are getting garnishment?

Besides noticing a change in your regular pay, you employer will inform you, and you would have already received one or more notices informing you of their intent to do so and ask you to make other payment arrangements.

What is Trust Fund Penalty?

A Trust Fund in terms of employment tax should not be mistaken with a trust fund in terms of wealth management. This is the payroll tax amount assessed to the officers of the business. Tax resolution can help reduce and or arrange the payment of these taxes.

What is a Trust Fund Recovery Penalty (TRFP)?

A Trust Fund Recovery Penalty can be assessed if the unpaid trust fund taxes cannot be immediately collected from the business. This often happens if the business falls on hard times and taps into that fund for any reason. According International Revenue Code 6672(a) an individual can be held liable for penalty for willful failure to collect, account for, or pay to the IRS the taxes for the business.

Who is Held Responsible for the TRFP?

According to the IRS, the TRFP can be assessed against any person who is: responsible for collecting or paying withheld employment taxes, willfully fails to collect or pay the taxes.

Wage Garnishment Release

What is Wage Garnishment?

Wage garnishment is a way the IRS can obtain your wages and earnings through your employer. This is to satisfy a tax debt that you have not attempted to pay off. Similar to any other tax levy, the IRS obtains the right to your property. In this case, your paycheck in order to collect the debt you owe. For this method, your employer withholds a portion of your paycheck and sends that portion to the IRS to pay off your tax debt. Wage garnishment can affect your gross wages, salary, bonuses, commissions, retirement benefits. It and can even affect your disability, VA and social security benefits.

How Will I know If My Wages Are Being Garnished

The IRS will typically send you a number of notices. This is to let you know that you have a tax debt in need of being paid. If you do not attempt to pay off your debt in full or through an installment agreement, the IRS will then garnish your wages. The IRS will not notify you that your wages are being garnished. Instead, the IRS will directly issue a notification of garnishment to your employer. Then your employer will proceed to notify you that your wages are being garnished.

What is a Wage Garnishment Release?

A Wage Garnishment Release is just as the name presents. It is a way for the IRS to release your wages from garnishment. In order to obtain a Wage Garnishment Release, you must first request it from the IRS. There are three main reasons that the IRS will consider releasing your wages from being garnished:

In addition to those three main reasons, you may also be able to greatly reduce the amount of collections by amending or filing any missing or incorrect tax documents. Or by having a tax professional look at your taxes to see if any tax deductions have been missed.

Am I Eligible for a Wage Garnishment Release?

Although it can be difficult to be approved for a wage garnishment release as the IRS is not very lenient given that they usually send many warning notices before resorting to wage garnishment, it is not impossible. Wage garnishment is not usually ideal for the IRS as there are many rules and fees that come with it which make it more difficult to obtain the full balance of your tax debt. If you meet any of the above criteria and you are in full tax compliance, meaning that you have filed all required tax returns, you are likely eligible for Wage Garnishment Release.

To break it down, you may be able to release your wages from garnishment if:

You file for an Extension to Pay (ETP) - If you have not previously filed for an extension to pay and you have followed through on previous payment agreements, the IRS will typically accept an extension to pay which would automatically release your wages from garnishment.
You enter a payment plan with the IRS - If you file for any type of installment agreement or other form of payment (OIC, CNC), the IRS typically releases your wages however, if for any reason you do not follow through on your payment agreement, the IRS will garnish your wages once again.
You are able to prove that garnishment of your wages would cause severe financial hardship and make it nearly impossible to meet your basic living expenses.

Next Steps:

If you are in fear of your wages being garnished or have already received notice of garnishment from your employer, the best course of action is to speak with a tax professional who can evaluate your specific tax situation and advise you on how to best move forward. Give us a call today to discuss how you can avoid wage garnishment or how you can be released. See more of our tax resolution services.