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What is the Best Way to Stop IRS Wage Garnishment?

By Amanda R. Bell
Updated May 16, 2024
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The best way to stop an Internal Revenue Service (IRS) wage garnishment depends on each individual's circumstances. For those threatened with garnishment or who have recently had a wage levy placed on them, negotiating with the IRS may be best. In many cases, the IRS may be willing to work out a payment plan, settle the debt, forgive the debt, or stop IRS wage garnishment if it is proven to be a financial hardship. For those who have tried to work with the IRS to no avail, taking the matter to court may be the best course of action. In some cases, filing bankruptcy may be the best way to stop IRS wage garnishment.

The simplest way to stop an IRS wage levy is to pick up the phone and call the agency before a garnishment is ever implemented. In most cases, the IRS will work out a payment plan for back taxes if a person is unable to pay the full amount. While this amount will typically also include fees and penalties, it will prevent any legal action from being taken as long as the taxpayer makes the required payments on time to stop IRS wage garnishment before it ever happens.

If a garnishment is already in place, negotiating with the IRS is still one of the best ways to stop IRS wage garnishment. The IRS can sometimes be convinced to settle the tax debt for less than what is owed or to write it off completely. There are very specific income guidelines and other requirements for this to even be considered, however, especially in the case of writing off the entire debt. A settlement or write off, if appropriate, can nonetheless be a good way to stop IRS wage garnishment.

In the same vein, the IRS can look at a person's total income and expenses and determine whether or not the garnishment is putting undue strain on the taxpayer or the family. If the IRS decides that a person is financially able to deal with the wage levy, the taxpayer can still appeal the decision before a judge. A judge who finds that the levy is putting a person in a position of financial hardship can rule to stop IRS wage garnishment.

While negotiating with the IRS is one of the best ways to stop the garnishing of wages, it may not always work. For those with a large amount of other debt in addition to their back taxes, filing bankruptcy can put an immediate stop to wage garnishment. If the bankruptcy is granted, the debt might be forgiven, although this depends entirely on the judge overseeing the case and current tax laws. While this may be the best option for some people, it is typically not the ideal resolution for most. Bankruptcy can ruin a person's credit score, making it extremely difficult to make any large purchases until the bankruptcy comes off of the credit report. This removal can take anywhere from seven to 10 years, and a bankruptcy can increase the interest rate on other new debts.

Cooperating with and talking to the IRS is the best way for most people to stop IRS wage garnishment. It is important to note, however, that the ending of an IRS wage garnishment does not automatically mean the tax debt is forgiven. In most cases, once taxpayers are in a better position financially to pay back the debt, they will be expected and required to do so. The failure to do so can result in a wage garnishment being enacted again.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

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