wage garnishment

If you are reading this then you are probably already in trouble with the IRS.

You are getting letters concerning wage garnishment, your bank accounts being levied or a lien put against your house. They can make you sell everything you have to pay them off.

The IRS is not really the cruel, heartless monster that most people think. Yes, wage garnishment, tax levies, liens are all tools that they use. It is really just a business. If you owe them money they want it. BUT if you don’t pay them and ignore them then they get mad and come after you.


Obviously paying them solves everything. As my dad used to say “Money Solves Money Problems.”

Problem is most of us don’t have the kind of money they are asking for (those sneaky penalties can hit 25% and the interest keeps on going on).

There are 4 basic options:

Don’t do anything.

Let the IRS move forward with Wage Garnishment, Tax Levies & Liens. (not usually suggested because this is the most expensive option.)

Make a payment plan.

If you owe under $50,000 you can go up to 6 years in installment payments (interest does keep on going through that time) without filing any financial forms. Consider it a 6 year loan payment agreement. But…(there is always a but)…you have to be in compliance meaning that you have to be up to date with filing all your taxes and once you start the plan if you break it you will owe all the money at once. If you owe over $50,000 then they will want full financial forms which you may not want to provide. But…(yup there is one) if you pay down the tax to under $50,000 you can put the rest on a payment plan with no financials.


If you can prove that you really don’t have the money to pay them they will stop trying to collect it. At the end of 10 years it will fall off the table. But…(you knew that was coming)…if you have assets (house, bank accounts, investments etc.) they will tell you to sell them off and pay them. They don’t care that you don’t make enough money to pay your bills and them.

Offer and Compromise.

This is what you hear all these tax relief companies advertising on TV and Radio about. The IRS Fresh Start Program. The reality is that maybe 1 or 2 % of the people with tax problems are eligible for this. It is a long drawn out process and the fees they charge you are a killer. Don’t fall for these scams. What this all about is that if you sell off everything you own and the money you get is less than what you owe them, then they will take that amount in settlement. So you OFFER them all you have and they COMPROMISE and take less money. But….(yup that again)…if you make a decent living, or have the potential to make one, or young enough for them to wait you out then they tend not to give it to you.

The attitude of the IRS is that they will grab your wages or bank accounts and get their money in the long run. Plus you are under their scrutiny for the next 5 years and if your situation changes they rescind the deal and go after more money (think about getting better paying jobs, inheritance, hitting the lottery, your house goes up in value).

What NOT to do. Allowing wage garnishment, levies & liens are not advisable. That should never be the solution as it is the most costly to you.



If I can help I will. As I always say there is no magic pill you can only work within the rules they have. But……. (we can talk about that face to face.)