IRS wage garnishment help in New York City
Your employer handed you an IRS letter, or your paycheck came in much smaller than it should be. A wage garnishment is stressful, and you didn't want your boss involved. I understand.
I'm Solomon Grosinger, an Enrolled Agent based in Brooklyn. I help people across New York City deal with IRS and New York State collections, including wage garnishments. Here is how they work and what can be done.
How an IRS wage levy works
The IRS calls it a wage levy. It is different from a bank levy in one big way: it is continuous. A part of every paycheck goes to the IRS, pay period after pay period, until one of three things happens:
you make other arrangements to pay,
the debt is paid, or
the levy is released.
Part of your pay is exempt and still comes to you. That exempt amount is based on the standard deduction and the number of dependents you're allowed. Your employer will give you a Statement of Dependents and Filing Status to fill out. Return it within three days. If you don't, your exempt amount is figured as if you were married filing separately with no dependents. That leaves you with less money.
A few more things people don't expect:
A bonus paid separately can go entirely to the IRS, because the exempt amount was already applied to that pay period.
If you pay court-ordered child support directly, you can ask the IRS to release the amount needed for that support, if the order came before the levy.
If you have other income, the IRS may apply your exemption to that income and take more from your job.
New York State garnishments
New York State has its own version, called an income execution. The state files a tax warrant first. Then it asks you to pay voluntarily, generally up to 10% of your gross wages each payday, starting within 20 days of the notice. If you don't, the state sends the income execution to your employer, who takes it out of your pay. For New York City residents, keep in mind that NYC income tax is handled by the New York State Tax Department, so a NYC balance is collected through the state.
How a garnishment gets released
The IRS will release a levy in situations like these:
You enter an installment agreement whose terms don't allow the levy to continue.
The levy is causing an economic hardship, meaning you can't cover basic, reasonable living expenses.
You pay the balance.
Releasing the levy will help you pay.
So the real work is building the right arrangement. That means accurate financial information, the right type of plan, and every required return filed. The IRS usually won't agree to a plan while returns are missing.
What I do
Read the levy notice and your letters to see who is collecting, for what years and how much.
Get your authorization signed so I deal with the IRS or the state, not you.
Pull your IRS transcripts and check for missing returns.
Prepare your financial picture: income, necessary expenses, assets.
Propose a resolution that fits: an installment agreement, Currently Not Collectible status, or, if your numbers truly support it, an Offer in Compromise.
Request the release and follow up until it's processed by the IRS and your employer.
Who I work with
I take people who are committed to fixing this and who have a real chance at a better result. That means sending documents, picking up when I call and staying current on taxes going forward. I don't handle criminal tax matters. And I never promise outcomes. Every case is different.
Common questions
Can an IRS wage garnishment be stopped? It can be released once there is an acceptable arrangement, like an installment agreement, or if it causes economic hardship. The debt still has to be dealt with, so the plan matters.
How much of my paycheck can the IRS take? Part of each check is exempt, based on the standard deduction and your dependents. The rest can go to the IRS. Returning your Statement of Dependents and Filing Status within three days protects your full exemption.
Will my employer fire me over a tax levy? I can't speak for your employer. Their legal role is to follow the levy. The best way to end their involvement is to get a release in place as soon as possible.
New York State is garnishing me, not the IRS. Is that different? Yes. New York uses an income execution, generally up to 10% of gross wages, after it files a tax warrant. I handle both, and often both are happening at once.
Do I need to file missing returns first? Usually, yes. The IRS generally wants all required returns filed before it agrees to a payment plan. I help get those done in the right order.
Let's stop the bleeding
Book a free 30-minute call to go over your case. For a quick question, you can call (718) 510-3166. Have the levy notice in front of you. I'll tell you straight where you stand.
General info, not advice for your specific case. Past results don't predict yours.