Employer sill garnishing my wages after chapter 13 filing

[davdes44]

Hi guys,

I work for a private employer and get payed cash every week. He started garnishing my wages after receiving a letter from the IRS. I recently filed for chapter 13 bankruptcy and he is still garnishing my my wages claiming he hasn't gotten or heard anything from the IRS stating otherwise. Any advice for this situation, He is garnishing almost 40 percent of my weekly wages and that affects me drastically.

Thanks in advance.

[kornellred]

The IRS can garnish 25% of an employee's net pay, maximum. So if your employer is reducing your wages by 40%, you are being cheated.

[davdes44]

Well I gross about 600 weekly and currently am paying out 235 to a levy. I have the tax records showing the payments made on the levy, so I know its not my boss cheating me(at least not in this aspect).

[olivies]

Well I gross about 600 weekly and currently am paying out 235 to a levy. I have the tax records showing the payments made on the levy, so I know its not my boss cheating me(at least not in this aspect).

WOW. I would definitely have your attorney, or a seperate tax attorney, address that levy. I didn't think they could take that much.

[DesdemonaB]

HI all

As someone who as being garnished - I filed CH7 and it took two pay periods to stop and only when my employer received a writ of garnishment release that came directly from the court that awarded the judgement. BUT my garnishment was civil - Cap One judgement, not the IRS. It's my understanding that taxes can't be discharged in either CH7 or CH13 - but Ch13 allows up to 5 years to pay back without additional intrest.

Now for the 40% being taken out - you should have asked about that on the very first deduction - you stated it's a private employer so just ask for a few mintues of their time with your paperwork or ask to see what was sent to him by the IRS and just ask why an additional 20% is being taken. My paperwork clearly showed the maximum % my employer could deduct per pay period - if there was miscommunication or an error I don't believe you are intitled to a refund as you filed CH13 and taxes are non-dischargeable anyway, but the % should be corrected for all future pay checks.

[papie]

From my personal experience in the HR industry-

In the garnishment order that employers receive, there is usually a statement saying that they cannot stop the garnishment until they receive written notice, so your employer is not in the wrong. The IRS even adds in a nice little paragraph stating that they'll charge the employer for any garnishments they neglected to collect UNLESS they receive that written order.

Levies do not adhere to a certain percentage.

Normally the employer receives a statement and they are supposed to have YOU fill it out with the number of "exemptions" you have and your filing status. The statement is then sent back to the IRS. What you put on this statement directly relates to what they garnish. Here is a link to the table they use to figure garnishments:

http://www.irs.gov/pub/irs-pdf/p1494.pdf

I'm kind of giving your employer the side-eye for not having you fill anything out before he garnished your wages. Sometimes, if you have other tax issues, the IRS will also demand they withhold your wages at a rate of 0 and single, maybe that's why he didn't have you fill anything out. Who knows.

In any case, you have a right to see the documents he received from the IRS and I would not hesitate to ask him for a copy.

[kornellred]

Thanks for that info, papie. IRS wage garnishment is a form of administrative levy, and does not need to be executed through a court of law. Therefore, the federal law controlling the maximum amount that can be garnished (25%) does not apply. Apparently, when people refuse to pay their taxes, the IRS goes for all of your wages except for what is needed to survive, contingent upon the number of persons in a household. Any garnishment amount is going to be too much, so it is a real good idea to just pay your taxes when they are due and be done with it.