So, the time has come when you have to pay the taxes. But you forgot the due date, packed up, and left for Hawaii! On returning, you realize you have spent all the money, and now you do not have enough to pay the taxes. It has happened quite a few times, and the IRS sends that dreaded message or notice.
You ignore it and move ahead with life as if nothing has gone wrong. But when you receive the Final Notice, you realize all of the mistakes you have made in life with money. This is when you ask yourself, 'can the IRS garnish wages?'
The answer is plain, yes, and this could be through the creditors dragging you to court. The penalties are high, and there are ways to prevent any issues regarding paying back. Here's how!
Pick the Installment Agreement
You have the option to pay back in small installments. You may know of the financial constraints or the EMI you may have to pay back for your home loan. But it is also for you to note that the IRS will garnish nothing more than 25% of the disposable income or whatever the amount is more than 30 times the federal minimum wage.
Pay Back in Whole
Now that you decided to pay back, you can alternatively go for repaying in one whole amount. It is great as it may cause no headache whatsoever. There are different ways of paying back this, even if you have a few hours left or immediately wish to stop the garnishments. Call the number and pay on the phone or even use your bank account to pay back.
Try Convincing about Low Salary
It may so happen that you can state your low income and the struggles you may face. It means you tell the IRS your financial state, and they might reconsider your amount. They may reduce the payback amount considering your hardship. You may even bargain and try to reduce the amount by a huge margin. It has to comply with the eligibility criteria they would have set.
Go for the Dispute
If you have never failed to date or have all the supporting files in place, you may even earn a chance to file a dispute. It means you have the chance to reduce the payback amount. You may even go for filing for bankruptcy. However, when you opt for Chapter 13, you are telling the IRS that you are a wage earner. You will also need to file the tax returns four years after filing for bankruptcy.
Ensure that you are just placing your debts in order and not just discharging the same. Make these payments over a time when you can pay back in time.
The Cautious Step
Many people try to struggle and make some cost cuts to pay back all of these dues and save themselves from any penalties from the IRS. It is advisable to go for the same and ensure there is less hassle from the IRS.
The IRS garnishes your wages, and it's very painful. In addition to the above tips, you can hire tax professionals from Silver Tax Group. Contact them for a free evaluation.