The execution of Form 668-W instructs an employer to remit a substantial portion of an employee’s wages directly to the Internal Revenue Service (IRS). Unlike a bank levy, which captures funds at a single moment in time, an IRS wage garnishment is a continuous levy. Once processed by a payroll department, the attachment remains active against every future paycheck until the tax liability is fully satisfied or the statute of limitations expires.
This enforcement action bypasses the percentage limits that restrict standard commercial creditors. The IRS possesses the authority to seize the majority of a taxpayer’s earnings, leaving only a calculated subsistence amount.
Navigating this crisis requires immediate procedural intervention from an IRS wage garnishment attorney. Because the garnishment is continuous, delay results in the repeated loss of income during every pay period that the levy remains in place.
The Internal Revenue Service derives its authority to seize wages from IRC § 6331. This statute permits the levy upon all property and rights to property, including salary, wages, and commissions, for the non-payment of assessed taxes.
For the garnishment to be lawful, the IRS must adhere to a specific procedural timeline defined by statute. The enforcement action generally follows this chronological sequence:
If the Final Notice period expires without a resolution or appeal, the IRS issues Form 668-W, Notice of Levy on Wages, Salary, and Other Income. This document is delivered directly to the employer. Upon receipt, the employer is legally compelled to comply. Federal law removes employer discretion in this matter.
If an employer fails to withhold the required funds and remit them to the U.S. Treasury, the employer can be held personally liable for the full amount of the debt plus penalties. Consequently, employers function as compliance agents for the IRS during this process.
Unlike other IRS seizure methods, the wage garnishment does not require a new notice for each pay period. Under IRC § 6331(e), the effect of a levy on salary or wages is continuous from the date the levy is first made until the liability is satisfied or the levy is released.
A common misconception is that the IRS is limited to taking 25% of disposable income, as is common with consumer debts. This limit does not apply to federal tax levies. The determination of take-home pay under a levy follows a strict federal formula defined in IRS Publication 1494.
The calculation process operates as follows:
The continuous levy attaches to all forms of compensation derived from the employment relationship. Coverage extends to:
The most effective defense against wage garnishment is to halt the enforcement action before Form 668-W is issued. If a Final Notice of Intent to Levy has been received, several statutory mechanisms exist to stop IRS wage levy actions legally.
These interventions function as legal barriers to the issuance of Form 668-W:
If Form 668-W has already been executed and wages are being garnished, the objective shifts to securing a release of the IRS wage garnishment. Under IRC § 6343, the IRS is required to release a levy under specific circumstances.
The most common statutory ground for release is economic hardship. The IRS must release a levy if it determines that the levy is creating an economic hardship for the taxpayer. Hardship is defined as the inability to meet “reasonable basic living expenses.”
We utilize IRS National Standards to demonstrate that the garnishment prevents the taxpayer from paying for housing, food, or medical care. Once documented, the levy must be released or modified.
A garnishment may be invalid if the IRS failed to follow due process. We scrutinize the administrative record to identify the following defects:
The government bears the burden of ensuring that all statutory protocols have been meticulously followed before seizing a taxpayer’s income. A wage levy is not valid simply because a tax debt exists; it requires strict adherence to due process requirements.
If the administrative record reveals that any mandatory step was skipped, mismanaged, or improperly documented, the enforcement action may be legally unenforceable. The validity of the enforcement action depends on the following elements:
At this critical stage, professional representation is essential for effective levy resolution. McCauley Law Offices, as your IRS levy lawyer, ensures your procedural rights are fully asserted, the government stays strictly within its statutory boundaries, and unnecessary financial impact is minimized.
We follow a structured protocol to achieve wage levy relief:
Contact McCauley Law Offices to arrange a confidential consultation and discuss your case.
Question | Answer |
How much of my paycheck can the IRS take? | The IRS is not limited to a percentage. They use Publication 1494 to calculate a small “exempt amount” based on your filing status and dependents. The IRS takes everything above that amount, which often results in the seizure of 70% or more of net pay. |
Does a wage garnishment stop automatically? | No. A wage garnishment is a continuous levy. It remains in effect for every single pay period until the tax debt is paid in full, the statute of limitations expires, or the IRS issues a formal Levy Release. |
Can my employer fire me for an IRS garnishment? | Generally, no. Federal law prohibits employers from terminating an employee for a garnishment arising from a single debt. However, the administrative burden on payroll can create significant professional tension, making a quick resolution advisable. |
Can I stop a garnishment once it has started? | Yes. As your IRS wage garnishment attorney, we can release the levy by proving economic hardship, entering into a formal installment agreement, or demonstrating that the levy was issued in error. Immediate submission of financial documentation is typically required. |
Does the garnishment apply to bonuses and commissions? | Yes. The continuous levy attaches to “wages, salary, and other income.” This includes bonuses, commissions, and severance pay. The IRS typically captures the entire amount of these payments if the exempt amount for the pay period has already been met. |
Frightened by a threatening letter from the IRS, the taxpayer’s attempts to establish communication went unanswered, resulting in an unexpected wage garnishment. Helpless and anxious, the taxpayer reached out to McCauley Law office for assistance. We swiftly intervened, releasing the wage garnishment and skillfully negotiating a partial pay installment agreement with the IRS to tackle the outstanding tax liabilities. We emphasize the importance of formal agreements with the IRS to spare taxpayers the embarrassment of wage garnishments.
