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What Is An IRS Or State Wage Garnishment?

What Is Important To Know About Wage Garnishment

If you owe the state of New York or the IRS back taxes, these governmental organizations have the authority to garnish your wages. The IRS and New York must follow certain guidelines. Understanding the rules and procedures can help you prepare, and in some cases, take the proper steps to stop it.

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Prior To IRS Wage Garnishment

The IRS will assess an individual’s taxes each year. If their tax return in not correct, and a person owes money or more money than they paid, the IRS will send a Demand for Payment notice listing the amount due. If a person does not submit payment after receiving this notice, they will be sent a Final Notice of Intent to Levy, as well as a Notice of Your Right to a Hearing. These two notices are sent a minimum of 30 days prior to the start of wage garnishment. Tax experts recommend individuals contact the IRS prior to the start of wage garnishment and try to resolve the issue. It is possible in most cases to work out some type of payment plan.

Understanding Wage Garnishment in New York

Wage Garnishment in New York can occur when a tax warrant, also referred to as a Tax Lien or Judgment, is issued by the New York State Tax Department. The tax warrant is what empowers the Tax Department to proceed with the seizure of assets through levies, wage garnishment, and direct seizure of property.

It can only be filed once a tax debt becomes final. Before that happens, the taxpayer has to be given notice of the debt and an opportunity to be heard. In many cases though, the taxpayer defaults in responding to the notice of the debt and the proceedings escalate.

Stopping IRS Wage Garnishment

Unless someone is willing to work out a payment plan with the IRS, their options for ending a wage garnishment are limited, but it does happen. It’s possible the IRS could discover the time period to collect past due taxes expired before the garnishment procedure started. The IRS did not provide a person with an entire 30 days to respond to their notice as is required by law. The IRS offers a compromise solution for making payments when the case is in the appeal process.

Having a tax expert experienced with negotiating with the IRS is also an excellent option. The right tax resolution company can have the wage garnishment stopped and work out an affordable solution with the IRS.

Wage Garnishment in New York

The income execution laws in New York limit the amount of money that can be taken from a person’s wages. Once a creditor in the state of New York has won a court judgment, they can garnish 10 percent of a person’s gross wages or 25 percent of their disposable income, whichever is less. Should an individual’s disposable income equal less than 30 times the current minimum wage, their income won’t be able to be garnished. Disposable income is identified as the money left after a person has had all the legally required deductions taken from their paycheck.

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New York State and IRS Wage Garnishment help

When a person experiences a wage garnishment, the creditor has received a judgment against them. The only way to remove this judgment is to have it vacated in court. Once this is done, the money will no longer be removed from a person’s wages. The best solution is to take action before the wage garnishment begins.

This process will require the assistance of a tax professional. If you’d like to know more about how we can help you resolve your tax problem, call us for a FREE Tax Help Consultation at (855) 829-8477.

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