What Are Your Options After Receiving An IRS Garnishment Letter?
If you fail to address your debt, you will eventually receive an IRS garnishment letter, also known as a “notice of intent to levy.” This serves as a final warning from the government that they are ready to collect any unpaid taxes through an IRS levy.
During this process, the IRS has the authority to seize your wages, property, or other assets to satisfy your outstanding tax liabilities.
Receiving an IRS garnishment letter can understandably cause anxiety and concern. However, it’s crucial not to panic. There are several proactive steps you can take to prevent potential financial repercussions.
Understanding IRS Garnishment Notices
When facing IRS garnishment, it’s crucial to understand the sequence of notices you might receive:
- Initial Notices: These may include:
- Notice for unpaid taxes
- Reminder of due taxes
- Second reminder
- Notice of Intent to Levy: This serves as a final warning.
- Final Notice: Indicates imminent action if no response is received.
Legal Requirements and Appeals
According to the Internal Revenue Code 6330:
- The IRS must provide written notification before seizing assets.
- You have the right to appeal, which can delay the process as your case moves through review.
Options After Receiving an IRS Garnishment Letter
Upon receiving an IRS garnishment letter, consider these options:
- Full Payment: If financially viable, paying the tax bill in full.
- Installment Agreements: Monthly payment plans to manage debt.
- Offer in Compromise: Settling debt for less than owed, possibly reducing interest.
- Hardship Declaration: Demonstrating inability to meet basic living expenses to avoid garnishment.
Considerations Before Bankruptcy
- Last Resort: Bankruptcy clears debt but impacts credit significantly.
- Consultation: Seek professional tax relief services to explore viable options based on your financial situation and IRS history.