If you have received a letter from the IRS informing you that your wages are going to be garnished because of taxes owing and unfiled taxes, or if a wage garnishment is already in place, there are still a few options available to you. In either case, the fastest way to secure a wage garnishment release is to pay your taxes owing and to file all your returns. If this is not possible for you, you can also negotiate a monthly payment or installment plan where you will commit to paying back your taxes in full over a period of time. For many people however, a monthly plan would cause undue hardship and is beyond their financial capabilities. If this applies to you, in addition to requesting a wage garnishment release, you may also want to apply for Currently Non Collectible status.
One of the advantages of Currently Non Collectible status is that your wage garnishment release will be secured and you will not have to make monthly payments. The amount you owe, however, will still be subject to penalties and interest and the IRS can still place a lien on your property. This special status is designed to enable you to save up the amount of money you owe, and ultimately, pay it off. You will have to prove that your monthly expenses and your liquid assets are greater than your monthly income. You will also have to fill out copious forms as well as negotiate all of this with the IRS.
While you can negotiate a wage garnishment release and apply for Currently Non Collectible Status on your own, it can also be a good idea to consult with a tax attorney. Tax attorneys are well versed in income tax law and will be able to help you fill out the forms and better yet, deal with the IRS on your behalf. They can also discuss another possibility with you, which is an Offer in Compromise Settlement where you can pay off a reduced amount of taxes and be cleared of your obligations once and for all.
