Garnishment Release Letter

As we know, we can be sure of two things in life: death and taxes. If for whatever reason you relax and accrue taxes, these will catch up with you at some point. 

One way this can happen is through wage garnishment. Wage garnishment is when the tax collection agency writes to the employer of the taxpayer in default. This letter requires the employer to withhold wages, salaries, and non-wage payments and submit these to the department to settle the taxpayer’s tax liability. 

While this may feel challenging for an employer, wage garnishments are legal procedures and it’s unlawful for an employer to refuse to execute a garnishment. 

Once the tax lien is cleared, then a garnishment release letter is issued.

What Is A Garnishment Release Letter?

The IRS will only require your wages to be withheld and submitted to the agency up until the outstanding amount is clear. When this happens, they stop further remittances and inform the taxpayer that they have been released from the garnishment. 

This communication to the taxpayer is done through a garnishment release letter. 

A garnishment release letter can also be issued after a defaulting taxpayer enters an Installment Payment Agreement with the IRS.

What Do I Do About A Garnishment Release Letter?

A garnishment release letter, unlike many IRS notices, is a positive letter. You have possibly heard about replying to the IRS and not ignoring any of its notices. 

However, you don’t need to respond or do anything about a Garnishment Release Letter. This letter merely tells you that the IRS has stopped your employer from making deductions from your salary or wages. There is no action required from your end. 

If you have multiple garnishments, then your employer will continue servicing the rest, excluding the one you have been released from. 

You can also have your earnings garnished again in the future should you fail to remain current on your taxes. 

Wage Garnishment Process

Luckily, the IRS does not wake up one day and decide to garnish your wages. Before they do this, they first send you several letters and notices urging you to make payments. These are called bills.  You should respond to these letters by making payments or entering a payment plan with the IR on how you intend to settle your back taxes. 

Should you fail to do this, the IRS escalates its efforts by sending at least three notices of its intention to garnish your wages. These are sent to your last known address before your wages are garnished. 

Also important to know is that an individual can have their wages garnished for their spouse’s back taxes. This however only happens when a married couple files a joint return. If a married couple files individually, the IRS cannot garnish one partner’s wages for another’s tax lien. It can, however, levy a joint bank account if your income is deposited into the said account. 

While other creditors would need a court order to garnish wages. The IRS doesn’t. You will however receive sufficient notices before the garnishment commences. You can also request a hearing to stop the IRS from garnishing your wages, or better still, enter into a payment plan. 

There also isn’t a set amount of money that triggers the IRS to constitute a wage garnishment. Still, while these amounts vary, you are unlikely to face wage garnishment for nominal amounts. 

What If An Employer Keeps Making Deductions After the Garnishment Release Letter?

Once a Garnishment Release Letter is issued, your employers should refund any amounts they are holding back to you or your account. Similarly, the IRS refunds any overpayments directly to the taxpayer. 

However, if you have additional garnishments with the IRS or other state agency, the overpayment is applied to settle those debts. 

How Else Can A Wage Garnishment Be Stopped?

There are several ways you can get a wage garnishment released. 

The first is to make a lump sum payment to the IRS settling your liability. Once you clear the outstanding amount, a garnishment release letter will be issued. 

The second way is by entering into a voluntary payment plan with the IRS, and the third is to prove that the garnishment is causing you financial hardship. While the IRS wants to recover its money, it should leave you enough to live on. 

How We Can Help

At the Cumberland Law Group, we have helped numerous clients with tax and IRS issues. While problems with the IRS might make you feel boxed in and with no reprieve, this is not always the case. 

As qualified tax attorneys, we have represented our clients with the IRS, whether in court or during negotiations with the IRS. We can do the same for you and help you regain some control over your life and finances. Talk to us today.