Release of IRS Garnishment | Wages and Bank | Flat Fee Tax Service
Updated: Nov 22, 2019
How to Stop or Release an IRS Garnishment
Once you receive an IRS final notice of intent to levy, you have 30 days to stop levy enforcement. If you do not reach out to the IRS by that deadline or request a hearing, the agency can order your employer and move forward with the wage garnishment or wage levy. The IRS garnishment will continue until you pay the tax debt in full, you set up an agreement with the IRS, or until the arrival of Collection Statute Expiration Date for tax years that carry a liability. Fortunately for you, there are some resolutions to stop or release an IRS garnishment.
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The best resolution of your IRS tax problem, is mostly based on your total balance, as well as your tax return compliance and current financial situation. In almost all the options below, you will need to be current on all your tax filings. You need to file all tax returns required before the IRS will consider setting up a tax resolution with you.
Procedures to Stop or Release an IRS Garnishment or Wage Levy.
1. Request a Collection Due Process Hearing
A Collection Due Process Hearing (CDP) is a procedure of the IRS Office of Appeals. It is an independent organization within the IRS that is separate from the collection office that initiates the wage levy. If the IRS sends you a final notice of their intent to levy, you can request a CDP hearing 30 days from the date of the IRS’s notice of your right to a hearing. If you move forward with a CDP hearing, collection activity will usually cease (exceptions for jeopardy, a federal contractor, DET, and state refund levies).
You need to fill out IRS Form 12153 and send it to the address on the letter or the IRS revenue officer on your case. As you wait for your hearing, it would be a good idea to work with a tax professional who can represent you and work out a tax resolution with the IRS on your behalf.
If you don’t propose a collection alternative, or offer a defense or claim hardship (discussed below), the wage garnishment can resume once the IRS issues a determination. See IRS Publication1660 for more information.
2 File for an Offer in Compromise (IRS Tax Settlement)An Offer in Compromise is a “collection alternative” the IRS will accept (if approved) to stop or release an IRS garnishment. A successful Offer in Compromise will settle your tax debt for less than you owe. You will have to apply for this tax settlement option. The Offer in Compromise process can be confusing and difficult. As in "all things IRS" an Offer in Compromise is not meant to be easily understood. Our very best advice is this: get professional help.Yes, you will be charged a fee for professional IRS help. Make sure your aren't over-charged.
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3. Prove Financial Hardship - Currently not CollectibleIf you can prove that the IRS garnishment causes financial hardship, the IRS will declare you as Currently not Collectible (#CurrentlymotCollectible). The IRS will temporarily (18 to 24 months) pause all collection actions until your financial situation improves. To get financial hardship status, you have to provide a lot of detailed financial information to the IRS.
If you are declared by the the IRS to be Currently not Collectible the IRs will file a federal tax lien. The Statute of Limitations will continue to run which will reduce the amount of time the IRS has to collect.
4. Change Employers or Temporarily Quit Your Job
Yes, this is a terrible and totally unnecessary option. There is no need to quit your job either temporarily or permanently. We get calls from taxpayers who ask us if this is a viable solution to an IRS garnishment. THERE ISN'T ANY NEED TO QUIT YOUR JOB.
Quitting your job doesn't settle your tax debt. You need to settle your tax debt. As soon as the IRS realizes that another employer is paying you, the wage garnishment will start up again.
An IRS garnishment is one of the IRS’s most serious enforcement actions. If you have received a final notice to levy or if the IRS garnishment has already started, you should get help from a tax professional as quickly as possible.