The IRS is taking part of my paycheck. How does it stop?
An IRS wage levy, often called a wage garnishment, does not end after one paycheck. It continues from the day it is first made until the IRS releases it. Part of your pay is exempt; the rest goes to the IRS each pay period.
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A levy that continues.
Unlike a bank levy, which reaches only the money on deposit when it is made, a levy on wages or salary keeps attaching to each paycheck until it is released.
- The levy is served on your employerYour employer is legally required to comply, and can be held liable for amounts it fails to surrender.
- An exempt amount stays with youEach pay period, a portion of your pay determined by law is exempt from the levy.
- The rest goes to the IRSPay above the exempt amount is sent to the IRS, every pay period, until the levy is released.
IRC §6331(e) (continuing levy on salary and wages); §6331(b); §6332(a) and (d) (surrender, and the employer's liability and penalty for failing to surrender).
The exempt amount.
The exempt part of your pay is based on the standard deduction for your filing status plus an amount for each dependent, converted to a weekly figure and applied to your pay period.
Unless you give the IRS a written, verified statement of your filing status and dependents, the exempt amount is figured as if you were married filing separately with no dependents, which is usually the smallest exemption. Submitting the statement promptly matters.
Pay needed to comply with a court-ordered child support judgment entered before the levy is also exempt.
IRC §6334(a)(8)–(9) and (d), including §6334(d)(4) for years in which the personal exemption amount is zero, as it is for taxable years beginning after 2017 under §151(d)(5). Dollar amounts are adjusted for inflation each year.
When the IRS must release a wage levy.
A wage levy ends when the IRS releases it. Release is requested from the IRS with the grounds stated; it is not automatic.
The liability is paid or no longer collectible
Including when the IRS's time to collect expires: a continuing wage levy must be released at the end of the collection period.
An installment agreement is in place
Once you have entered into an installment agreement, the levy must be released unless the agreement provides otherwise.
Economic hardship
For an individual, the levy must be released if the IRS determines it is leaving you unable to pay reasonable basic living expenses. The IRS will consider your financial information, and you must act in good faith.
An agreement that the tax is not collectible
If the IRS agrees with you that the tax is not collectible, it must release the wage levy as soon as practicable.
IRC §6343(a)(1)(A)–(D) and §6343(e); Treas. Reg. §301.6343-1(b)(1)(ii), (b)(3) and (b)(4). A release does not prevent a later levy (§6343(a)(3)).
A different question from releasing this one.
Some rules stop the IRS from making a new levy. They do not, by themselves, undo a levy that was already made before they applied.
A pending offer in compromise
While an offer is pending, and for 30 days after a rejection (and during a timely appeal), the IRS may not levy for the tax the offer covers.
A pending or active installment agreement
The same restriction applies while an installment agreement request is pending, while an agreement is in effect, and for 30 days after a rejection or termination (and during a timely appeal).
A timely Collection Due Process hearing
A hearing requested within the 30-day window after the notice suspends the levy actions it covers while it is pending.
A levy made in violation of the law
For example, without the required hearing notice or while an offer in compromise was pending. The IRS will release it and return the property.
IRC §6331(k)(1)–(3), which excludes levies first made before the request (by reference to §6331(i)(3)(B)(ii)); §6330(e); Treas. Reg. §301.6343-3(d).
A levy follows notice.
Before levying, the IRS generally must give written notice of its intent to levy, and of your right to a Collection Due Process hearing, at least 30 days in advance. That notice is usually an LT11 or Letter 1058. Limited exceptions apply.
If the 30-day window has passed, an equivalent hearing can still be requested within one year of the notice. Appeals considers the same issues, but collection is not required to stop and there is no Tax Court review of the decision.
IRC §6331(d); §6330(a), (e) and (f); Treas. Reg. §301.6330-1(i).
We take it from here.
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Primary sources: Internal Revenue Code §6331, §6332, §6334, §6330, §6343 and §151; Treasury Regulations §301.6343-1, §301.6343-3 and §301.6330-1. General information, not advice for your situation.