The tax industry has its own vernacular, which can be confusing for the average taxpayer. With terms like wage garnishment, liens, and levies floating around, it can be hard to determine exactly what your issue is and what can be done about it.
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When you owe money on your federal taxes, wage garnishment is one of the most common actions the IRS will take. Legally speaking, wage garnishment allows a lender or legal entity to take money directly from your paychecks in order to cover your balance owed. A portion of your wages will be continuously withheld and given to the entity owed until the balance is paid in full. Once a wage garnishment is in place, your employer must comply. While your employer cannot fire you due to a wage garnishment, the practice typically leaves you with very little on which to live.
How Can I Resolve Wage Garnishment?
The simplest way to avoid wage garnishment in the first place is to pay back the debts you owe. Avoid taking out loans that you are not absolutely certain you will be able to pay back, and ensure all payments are made on time. In order to resolve or stop a wage garnishment, you must get back into good standing with the IRS, either by paying your balance in full or beginning a payment plan.
However, most taxpayers who have been affected by wage garnishment are unable to afford the payments. Thanks to the IRS’ Fresh Start Program, other options are available, such as Installment Agreements, which allow you to choose a reasonable amount for your monthly payment rather than being forced to pay a large sum each month.
You can also apply for an Offer in Compromise, a rather selective program which allows you to settle your tax debt for less than what you actually owe. You also have the option to claim financial hardship if you can prove that wage garnishment would significantly prevent you from meeting you and your family’s basic needs. If approved, the IRS may temporarily cease collections.
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How can FreshStartInfo Help?
Warranting a wage garnishment is understandably an incredibly difficult and stressful situation, but it’s not something you have to face alone. Here at FreshStartInfo, we partner with tax professionals who know the ins and outs of the program and have proven experience working with the IRS to remove wage garnishments.
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