Debunking the myths about IRS Wage Garnishment

Ignoring the debt of the IRS can be serious. They have the power to seize your assets and take money right out of your paycheck. If you haven’t paid the outstanding amount in full, the IRS can garnish your wages. Wage garnishment is when the court asks the employer to pay off your debt by withholding a part of your income. So, if you have received notices from the IRS, you need to take immediate action. When this happens, the first step should be notifying your employer about your financial situation. Also, you should seek the help of professionals to get you out of this.

The whole process of garnishment can sound pretty simple. However, there are still some confusion and myths regarding this. Here, we will help bust the most common myths regarding wage garnishments:

Myths regarding Wage Garnishments

All forms of garnishments are the same

IRS wage garnishment is just one form of garnishments. Different types of debts are fulfilled through this. Also, there are different rules, laws and legal requirements for each one of them. Some other forms include:

  • Child support
  • Creditor garnishments
  • Student loans
  • Tax levies

For some of these, the legal requirements can differ from state to state. To ensure compliance, you need to have an understanding of all of them. Also, the employer and the creditor have to determine the amount of garnished wages.

Complying with the requirements of garnishment is simple

IRS garnishing wages and wage garnishments release
IRS garnishing wages

Dealing with the legal requirements of wage garnishment can be a daunting task. If done incorrectly, the employer might end up paying the complete debt amount. They might also have to pay some severe penalties. Also, employees can face some penalties as well, like the revocation of the driver’s license or a passport. An employer can provide resources and training to the employees on the garnishment. Also, they have to track the ongoing legislation. The employer has to reduce the financial risk of employee’s garnishment. They also have to help the employees deal with the anxiety that comes with garnished wages. This is an administrative challenge. This becomes more difficult when the business is operating in different states.

There are no new legislations regarding the process of wage garnishments

There have been new legislations that are changing the landscape of garnishments. This involves judicial developments requiring employers to take fast actions. They have to adjust to how they want to process garnishment while staying compliant with the law. Some proposed changes include the following:

  • Acceptance of electronic signatures on the responses
  • Standardization of the timeframes
  • Limiting the maximum penalties
  • Requiring employers to provide additional documents to the employees.

Therefore, the employers, as well as the employees, have to be aware of the pending and the imminent rules. The Uniform Law Commission (ULC) is currently working with the APA. They want to standardize the garnishment process. Also, this will simplify the process for businesses. This can change the management of the garnishment process. Therefore, to get an understanding of this, it is best to take the help of a tax resolution service.

IRS Garnishing wages is a paper-based process

Almost all areas of business now carry out processes electronically. This is now extended into the wage garnishment process. Take the example of child support payments. The states send an electronic income withholding order (e-IWO) to the employers. The employers have the option to accept or reject electronically. This has made the practice more popular. In 2015, the number of e-IWOs sent jumped to 1.6 million from 926,000 two years ago. The automated systems mas make electronic processing even easier.

There is only limited data regarding the trend of wage garnishments

There have been several studies shedding light on the wage garnishment. These studies break down data for specific industries. The rise in the studies is because of electronic tracking and processing. Organizations are able to collect and analyze large sets of data. Also, it helps in working on identifying industry-specific, regional, and national trends.

You can get fired because of a wage garnishment levy

The employer cannot fire you after receiving the first notice from the court for a garnishment levy against you. But, if you have many garnishments, the employer can end your employment.

You will have enough money for covering your expenses

According to the law, the government can take 25% of your disposable earnings. During the process of wage garnishments, it is not necessary that they will consider your financial expenses. However, some funds are exempted from the local, state and federal taxes. This includes social security payments, unemployment insurance, etc.

Wage garnishment is for only one debt at a time

The government doesn’t have to garnish your wages for just one debt at a time. Your wages can be garnished for all of them at the same time. The different entities to which you can owe money are:

  • Creditor
  • The bank
  • IRS

In this case, where the garnishment is for multiple debts, your employer has the right to fire you. Also, some people believe that only back taxes and child support debt can be fulfilled through garnishment. This is not true at all. Debts like civil monetary judgments, court fines, student loans, and alimony can be collected through garnishment in some states. With the right knowledge of the garnishments, employers can work on their compliance strategies. This reduces the risk of penalties and fines. To help you with this, you can always turn towards the professionals. Platinum Tax Defenders is a tax resolution service that can help you with the wage garnishment process. We are the top tax defenders in Los Angeles.

So, if you are an employee with garnishment against you, our tax relief experts can help you remove it. To know more about garnishment, talk to the tax relief experts at the Platinum Tax Defenders today!