Immediate Steps to Take If You Discover a Tax Wage Garnishment

Immediate steps to take (clear, prioritized actions)

1. Stay calm and gather the paperwork

• Carefully read the notice and note the agency name, amount owed, the date the levy started, and any deadlines. The IRS will send a “Final Notice of Intent to Levy and Notice of Your Right to a Hearing.” Keep copies of every letter and any employer correspondence. (See IRS guidance on levies: https://www.irs.gov/businesses/small-businesses-self-employed/levies.)

1. Verify the garnishment’s legitimacy

• Confirm the sender is the IRS or your state tax agency. Scammers sometimes fake garnishment notices. Call the agency using the phone number on their official website (not a number on the notice if you suspect fraud). The Consumer Financial Protection Bureau also has guidance on spotting fake garnishment demands (https://www.consumerfinance.gov/).

1. Ask your employer payroll or HR for details

• Ask what portion of your paycheck is being withheld, when the withholding started, and whether the employer received a levy or court order. Get any employer communications in writing.

1. Contact the tax agency immediately (don’t wait)

• Ask for an account balance and the notice type. Ask whether you qualify for immediate relief: an installment agreement, an Offer in Compromise (OIC), or temporarily “currently not collectible” status. The IRS explains OIC and payment plans here: https://www.irs.gov/individuals/offer-in-compromise and https://www.irs.gov/payments.

1. Request a Collection Due Process (CDP) hearing or other appeal if eligible

• If you received a final notice of intent to levy, you generally have a limited time (usually 30 days) to file for a CDP hearing with IRS Appeals. Filing a timely CDP or equivalent state appeal can pause collection while the appeal is pending. Learn more from IRS Appeals guidance: https://www.irs.gov/appeals/understanding-a-collection-due-process-cdp-hearing.

1. Propose a workable resolution

• Short-term: Ask for a partial-payment installment agreement or a short deferral to cover immediate cash needs. Use IRS Form 9465 for many installment agreements. For longer-term relief, an Offer in Compromise may settle the debt for less than full balance if you meet strict criteria.

1. Ask for a levy release for financial hardship

• If the garnishment makes you unable to meet basic living expenses, request a release or reduction. The IRS can release a levy if it creates an immediate economic hardship. Be prepared to provide current budget documentation (rent/mortgage, utilities, dependent needs).

1. Consider professional help

• A CPA, enrolled agent, or tax attorney can negotiate with the agency, prepare an Offer in Compromise, or file appeals correctly. In my experience advising clients, early professional help often stops unnecessary withholding sooner.

1. Rebuild cash flow and document everything

• Rework your budget immediately to account for the reduced take-home pay. Keep a dated file of calls, names, and any documents you submit; this record can be vital if you need to prove timely action.

Key rules and common misunderstandings

• Federal tax levies vs. private creditor garnishments: private creditors are limited by the Consumer Credit Protection Act (typically the lesser of 25% of disposable earnings or amount over 30× federal minimum wage). Tax levies follow tax-collection law and procedures—contact the tax agency to learn the specific withholding amount and calculation. (See CFPB and IRS resources referenced above.)

• Ignoring notices makes things worse: you may lose appeal rights and face continued garnishment, liens, or asset levies.

• Don’t assume bankruptcy will solve all tax garnishments: certain tax liabilities survive bankruptcy unless they meet strict age and filing criteria. Consult a bankruptcy attorney for your situation.

When to escalate

• If you can’t pay basic living expenses because of the withholding, treat it as an emergency. Request a hardship release and, if needed, consult a tax attorney to explore immediate protective remedies.

Helpful links and next steps

• How Wage Garnishments Work and How to Stop Them (internal guide): https://finhelp.io/glossary/how-wage-garnishments-work-and-how-to-stop-them/
• Relief Options for Taxpayers Facing Wage Garnishment (internal): https://finhelp.io/glossary/relief-options-for-taxpayers-facing-wage-garnishment/
• IRS levies and collection information: https://www.irs.gov/businesses/small-businesses-self-employed/levies

Short FAQ (quick answers)

• Can I stop a tax wage garnishment? Possibly—by filing a timely appeal (CDP), negotiating a payment plan, or proving economic hardship.
• How long will garnishment continue? Until the debt is paid, the agency releases the levy, or you obtain an alternate resolution.
• Should I pay a third-party company that promises to stop the garnishment? Be cautious—only authorized tax professionals and the IRS/state agencies can negotiate properly. Avoid upfront-fee scams; verify credentials.

Professional disclaimer

This article is educational only and not personalized tax advice. For guidance tailored to your facts, consult a qualified tax professional (CPA, enrolled agent, or tax attorney) or contact the IRS/state tax agency. The guidance above references IRS resources current as of 2025.

Author note

In my practice advising clients for over 15 years, the most effective outcome comes from acting quickly, documenting every step, and using available collection alternatives (appeals, installment agreements, or OICs) rather than ignoring notices.