Few things in life get people’s attention faster than a letter from the IRS. And when unpaid taxes enter the picture, you might ask yourself, “Can the IRS garnish my wages or bank account?”
If you are dealing with IRS debt in Tennessee, you will want to know how this works, so you can take back some control in this situation.
How Does IRS Garnishment Work?
Yes, the IRS can garnish your wages or bank account. They use a levy to collect unpaid taxes. This levy allows the IRS to seize property to satisfy tax debts. Some of these assets may include:
- Wages
- Bank funds
- Other assets
This is different from a private creditor garnishment. The IRS does not need a court order. Plus, they can move faster than most people expect once certain steps are met.
Once a wage levy is in place, your employer is required to send a portion of your paycheck directly to the IRS.
Unlike most creditors, the IRS does not take a percentage. You are only allowed to keep a small exempt amount based on your filing status and number of dependents. The rest goes to the IRS.
Remember that IRS wage garnishments do not expire after a few pay periods. It will continue until the tax debt is paid, the statute of limitations runs out, or the levy is released.
Can the IRS Take Money from My Bank Account?
In short, the answer is yes. When the IRS issues a bank levy, your financial institution must freeze the funds in your account, including up to the amount owed. Federal law requires the bank to hold the funds for 21 days before sending them to the IRS.
This 21-day window is important. Many times, this is the last chance to resolve the issue, request a release, or set up an alternative arrangement before the money is gone.
Will the IRS Warn Me First?
Yes. The IRS is required to give notice before taking action. The process looks like this:
- You receive bills and notices demanding payment
- The IRS sends a Final Notice of Intent to Levy
- You’re given 30 days to respond or appeal
Failing to address these notices can lead to garnishment. You want to respond, even if you cannot pay in full. Many times, this can stop enforcement action.
How to Stop or Prevent IRS Garnishment
Fortunately, garnishment can be avoided by taking a few steps. Some of your options may include:
- Installment agreements to pay over time
- Offers in compromise to settle for less than the full amount owed
- Currently not collectible status if payment would cause financial hardship
- Appeals or levy releases in certain circumstances
Once the IRS sees that you are actively working toward a resolution, enforcement actions such as wage and bank levies are often paused or lifted.
When to Talk to a Tax Attorney
If the IRS is threatening garnishment, or you have already received a levy notice, you need to seek professional help. These situations move quickly. Unfortunately, any small mistakes can cost real money.
At Easter & DeVore, Attorneys at Law, we help Tennessee residents with tax debt issues. We work to:
- Communicate directly with the IRS
- Explore relief options that fit your financial reality
- Stop or release wage and bank levies when possible
- Create a plan to resolve tax debt without wrecking your future
You never want to ignore any of those notices. They will not go away on their own. By not taking action that can lead to last-ditch efforts by the IRS, such as garnishing your wages and bank accounts.
We Can Assist with Tax-Related Issues
Can the IRS garnish my wages or bank account? Yes, the IRS can do this, but it is rarely the first step. And this doesn’t have to be the last word.
The earlier you act, the more options you usually have. If IRS notices are piling up or you’re worried about your paycheck or savings being at risk, getting help can make all the difference.
At Easter & DeVore, Attorneys at Law, we can help you discover your options. Let’s take those next steps. Reach out to us to schedule a consultation.
