IRS Wage Garnishment Checklist
Understanding Wage Garnishment
A wage garnishment occurs when the IRS legally orders your employer to send part of your paycheck directly to the government to satisfy unpaid tax debt, continuing each pay period until it is resolved. Federal law grants the IRS authority to garnish wages without court approval. Still,
four conditions must be met first
1. Assessment of your tax liability and delivery of a Notice and Demand for Payment.
2. Your neglect or refusal to pay after receiving billing notices.
3. Delivery of a Final Notice of Intent to Levy at least thirty days before garnishment begins.
4. Advance notification of Third Party Contact, informing you that the IRS may contact third parties regarding your tax liability.
Garnishment continues removing money from each paycheck until you resolve the situation through payment, agreement, or formal appeal.
Who Should Use This Checklist
This checklist applies to you if
- The IRS sent a Final Notice of Intent to Levy (Notice LT11 or Letter 1058) stating your
wages will be garnished.
- Your employer informed you that the IRS issued Form 668-W and that money is being
withheld from your paycheck.
- Back federal income taxes, self-employment taxes, or trust fund taxes remain unpaid,
and collection notices have arrived.
- You need to understand your appeal rights and options before or after garnishment
starts.
This checklist does not apply to you if
- No federal tax debt exists, or unfiled current-year returns represent the only issue.
- Money being withheld from paychecks is for child support, student loans, or state taxes.
- An audit notice arrived, but no collection action has been proposed.
What Determines the Outcome
The outcome depends on how quickly you respond and whether you protect your right to appeal within thirty days of the Final Notice date. Missing this deadline eliminates your automatic right to stop collection and your ability to appeal to the Tax Court. However, you retain important appeal rights through an Equivalent Hearing (available up to one year after the notice date) and the Collection Appeals Program, though these options do not automatically suspend collection activity while your case is reviewed.
1. Locate your IRS notice and identify which type you received. The Final Notice of Intent to
Levy appears as Notice LT11 or Letter 1058. Form 668-W is sent directly to your employer and begins actual wage withholding. Write down the notice date and any case number listed.
2. Calculate the thirty-day deadline from the date on your Final Notice. Count thirty days forward from the notice date shown on LT11 or Letter 1058. If your employer has already received Form 668-W and begun withholding, the thirty-day period has likely passed.
3. Verify the tax years and amounts the IRS claims you owe. Compare the notice information against your own tax records and document any discrepancies immediately.
4. Check with your employer whether Form 668-W was received and when withholding started. Ask your payroll department for a copy of the levy form and review your pay stubs for deductions labeled "Federal Tax Levy."
5. Request a Collection Due Process hearing if it is within thirty days of your Final Notice.
Complete Form 12153 and mail it to the address shown on your notice before the deadline expires. Filing this form stops levy action while your hearing is pending and preserves your right to appeal to the Tax Court.
6. Request an Equivalent Hearing if the thirty-day deadline has passed, but less than one year has elapsed. Use Form 12153 and send it to the address on your notice. An
Equivalent Hearing considers the same issues but does not automatically stop collection and does not provide Tax Court review rights.
7. Contact the IRS immediately if garnishment is causing genuine financial hardship. Call the phone number on your levy notice and explain why the garnishment prevents you from paying necessary living expenses. The IRS can release a levy that creates immediate economic hardship.
8. Request an installment agreement if you cannot pay the full amount now. Apply online at
IRS.gov using the Online Payment Agreement tool, call the number on your notice, or submit Form 9465. When an installment agreement is approved, the IRS typically releases existing wage levies as part of establishing your payment plan. Contact the IRS to confirm levy release once your agreement is in place.
9. Gather complete financial documentation before proposing payment arrangements. List all monthly income sources, necessary living expenses, outstanding debts, and assets you own. The IRS requires this information to evaluate hardship claims and payment proposals.
10. Submit an Offer in Compromise only if you qualify and understand the process. Use
Form 656 and complete all required financial disclosures. While submitting an Offer in
Compromise does not automatically stop or release an existing wage levy, the IRS typically halts most collection actions, including wage garnishments, once your application is under consideration. However, this is not guaranteed—contact the IRS to request a levy release based on your pending offer and financial circumstances. Be aware that interest and penalties continue to accrue during the review period.
11. Keep detailed records of all IRS correspondence and communications. Maintain copies of every notice, letter, form you submit, and notes from phone calls, including dates, representative names, and what was discussed.
Mistakes That Worsen Your Situation
Ignoring notices because you hope the problem will resolve itself only ensures the garnishment continues taking money from every paycheck. Missing the thirty-day deadline to request a
Collection Due Process hearing eliminates your automatic levy suspension and Tax Court review rights.
However, you retain other appeal options, including Equivalent Hearings (within one year) and the Collection Appeals Program. Changing jobs without informing the IRS of your new employer simply delays inevitable collection. It may result in the IRS issuing a new levy to your current employer once they locate you.
Making partial payments without an approved written agreement does not stop garnishment because the IRS applies payments to interest and penalties first, while continuing to collect through the levy. While your employer cannot refuse to comply with an IRS levy or stop the garnishment on your behalf, they can provide you with copies of the levy notice (Form 668-W)
and information about the exempt amount calculations, which may be helpful as you work to resolve the levy with the IRS directly.
When Professional Help Becomes Necessary
Seek professional assistance when the thirty-day hearing deadline is within five days, and you are uncertain how to respond properly. Complex cases involving multiple tax years or debts exceeding ten thousand dollars benefit from someone who understands IRS procedures and negotiation strategies.
Professional help becomes critical when you believe the debt amount is incorrect or was already paid, and you need to obtain IRS transcripts and present evidence in the proper format. If the
IRS scheduled a Collection Due Process hearing or you are preparing an Offer in Compromise, these processes involve specific documentation requirements where mistakes can result in denial.
When direct communication with the IRS produces no progress, and the garnishment continues despite your attempts to resolve it, professional representation often reopens negotiations and moves your case forward.
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