For many individuals and businesses, unresolved tax issues can lead to significant financial and professional consequences. Wage garnishments, in particular, are one of the most immediate and disruptive actions the IRS or state tax agencies can take. In some cases, they can even lead to job termination.
Here’s what you need to know about addressing tax debt before it spirals out of control.
The Real-Life Consequences of Wage Garnishments
Imagine this scenario: An employee’s wages are garnished due to unpaid taxes. Their employer, unaware of the tax debt beforehand, learns about it through the garnishment process. In some instances, this discovery has resulted in the employee being terminated.
While wage garnishment doesn’t always lead to job loss, it’s not a situation most want to face. Garnishments not only create financial strain but also bring unnecessary stress and embarrassment.
Why Tax Agencies Are Increasing Collection Efforts
In recent months, the IRS and state tax agencies have ramped up enforcement actions. For example, the IRS has resumed issuing LT11 notices, and final notices of intent to levy which were largely paused during the pandemic. These notices signal the IRS’s intent to garnish wages, levy bank accounts, or file liens.
States like Virginia have also become more aggressive, with garnishments on paychecks and bank accounts becoming increasingly common. Employers may withhold a portion of wages sometimes as much as 25% until the debt is resolved.
How Garnishments Impact Your Financial Stability
When a garnishment is issued, it’s not just your paycheck that’s affected. It can disrupt your ability to manage daily expenses, pay bills, or maintain financial stability. Even if you contact the state or IRS after a garnishment, negotiating a reduction often leaves a significant percentage of your wages withheld.
Without proactive measures, taxpayers risk losing appeal rights or being unable to contest inaccuracies in their tax liabilities. This can eliminate options like tax court, which could otherwise serve as a critical tool for resolution.
What You Can Do to Avoid Wage Garnishments
The best way to deal with garnishments is to prevent them from happening in the first place. Here’s how:
- Respond to IRS Notices Promptly: Ignoring notices like the LT11 can escalate the issue quickly. Take action as soon as you receive one.
- Work Out a Payment Plan: Contact the IRS or state agency to negotiate a resolution. Even partial payments or installment agreements can prevent further action.
- Show Proof of Hardship: If garnishment would cause undue financial hardship, provide documentation to support your case. This can help reduce or release garnishments.
- Seek Professional Assistance: Tax professionals can help you navigate complex situations, from negotiating with tax agencies to ensuring compliance.
Protect Your Future by Acting Now
Wage garnishments and aggressive tax enforcement actions are more than just a financial inconvenience they can jeopardize your career and livelihood. Whether you’re facing action from the IRS or a state like Virginia, taking proactive steps to resolve your tax issues can save you from unnecessary hardship.
At Back Tax Expert, we specialize in helping individuals and businesses resolve their tax issues efficiently. Our team understands the urgency of these situations and works to protect your income and professional stability.
Don’t wait for garnishments to disrupt your life. Visit our website at https://backtaxexpert.com/ or contact us for a free consultation to take control of your tax challenges and secure your future.