Overview

When the IRS issues a wage garnishment notice it means the agency has escalated collection efforts after earlier notices and attempts to collect the debt. The notice explains the tax balance, gives limited time to respond, and — unless you act — can lead to a continuous levy that directs your employer to withhold the nonexempt portion of your pay.

How the levy amount is calculated

  • The IRS uses published tables and your filing status to determine how much of your wages are exempt from levy; only the remaining disposable earnings can be taken. (See IRS guidance on levies.)
  • There isn’t a fixed flat percentage that applies to every taxpayer; while garnishments often reduce take-home pay by roughly 15–25% in practice, the actual amount varies by income, dependents and allowable deductions.

Typical notice and timeline

  • You will receive multiple collection notices before a levy. One of those is a final notice advising the IRS’s intent to levy and your right to challenge the action. Federal law generally gives you an opportunity to request an administrative hearing before the levy is made.
  • If you do not respond or arrange a solution, the IRS can issue a continuous levy to your employer until the debt is paid, you enter a resolution, or the levy is released.

Your immediate steps (practical, prioritized)

  1. Read the notice carefully — it includes the tax year, the amount owed and how to contact the IRS. Keep a dated record of all communications.
  2. Contact the IRS right away to confirm balances and available options. You can often stop a garnishment by entering an approved payment plan or by showing you requested a hearing. (See IRS options for paying tax debt.)
  3. Consider an installment agreement or other relief. Setting up a payment plan is the most common way to stop wage levies. For step‑by‑step help, see FinHelp’s guides on setting up an installment agreement and applying online.

Professional options and appeals

  • Installment agreement: You can apply for a monthly payment arrangement; the IRS may release the levy once the agreement is approved and payments begin. (See linked FinHelp guides.)
  • Offer in Compromise: If you qualify, you might settle the debt for less than the full amount.
  • Collection Due Process (CDP) or equivalent appeals: You can request an appeal to contest the levy or request a hearing based on hardship.
  • Hardship release: The IRS can temporarily release a levy if it creates an immediate economic hardship (e.g., cannot pay necessary living expenses).

Common mistakes I see in practice

  • Waiting: Ignoring the notice usually makes matters worse. A quick response preserves options.
  • Assuming a fixed percentage: People assume a set % of wages will be taken; the IRS calculation depends on exemptions and disposable earnings.
  • Failing to document: Do not rely on verbal promises — get agreements in writing.

Real-world example (from practice)

A client with multiple years of unpaid tax notices ignored earlier letters. After receiving the final notice they called, applied for an installment agreement, and provided proof of monthly direct debit. The IRS released the levy once the agreement was accepted; the client’s employer stopped withholding after the first confirmed payment.

Helpful resources

FinHelp internal resources

Frequently asked questions

  • Can I stop a garnishment once it starts? Often yes — by entering an approved payment plan, getting a hardship release, or successfully appealing the levy. Act quickly and keep records.
  • How long does a garnishment last? A levy continues until the tax is paid, the IRS releases the levy, or other legal relief is granted.
  • Can my employer fire me for a garnishment? Federal law does not prohibit employer action, though some states limit or prohibit termination for a single garnishment. Check state rules and consult an attorney if needed.

Final advice and disclaimer

If you receive a wage garnishment notice from the IRS, respond promptly, gather documentation of income and expenses, and consider professional help. In my experience, early contact and a realistic payment proposal produce the best outcomes. This article is educational only and not a substitute for professional tax advice; consult a qualified tax professional or attorney for personalized guidance.