Unpaid income taxes can quickly lead to a financial nightmare. Both the state of Missouri and the federal government can garnish your wages if you don't pay your taxes. Unlike with most other wage garnishments, the government doesn't have to win a court judgment before initiating garnishment proceedings. You will receive notice of a pending garnishment.
Wage Garnishment Basics
Wage garnishments for most debts require a lawsuit and a court order, but the state or federal government can garnish your wages without a judgment. The government will send a garnishment order to your employer, and your employer will take money directly from your paycheck to pay your taxes. If you are unemployed or an independent contractor who does not receive paychecks, your wages can't be garnished, but the Internal Revenue Service can place liens on your property.
Although the government doesn't have to get a judgment, you'll still get plenty of notice that a garnishment is pending. You'll first receive a bill, then a demand for payment with a list of repayment options. If you don't agree to a payment plan or pay the amount in full, you'll then get a notice indicating that your wages are about to be garnished.
Alternative Payment Arrangements
It's much better to work out a deal with the IRS than to have your wages involuntarily garnished. If you know you can't afford to pay your full tax debt, you can offer a settlement to the IRS. This is called an offer in compromise. You can also sign up for a payment plan, but must pay the full amount within the time specified under your repayment agreement. A tax attorney can help you review your options.
Limitations on Garnishments
The amount of money that can be garnished for owed federal income taxes is set by federal statute instead of state law. Rather than limiting the garnishment amount, the law establishes specific amounts the IRS must leave in your paycheck. The amount varies depending on your income, exemptions, number of dependents and how frequently you are paid, but the IRS publishes a garnishment table that can help you anticipate how much money you'll lose. For example, a single person paid biweekly who has only one exemption must keep at least $390.38 from every pay check.
Van Thompson is an attorney and writer. A former martial arts instructor, he holds bachelor's degrees in music and computer science from Westchester University, and a juris doctor from Georgia State University. He is the recipient of numerous writing awards, including a 2009 CALI Legal Writing Award.