The Continuous Levy on Salary, Wages, and Commissions
An IRS Wage Garnishment is the most invasive and financially debilitating tool in the IRS collection arsenal. Unlike a Bank Levy, which captures a specific balance at a specific moment in time, a wage garnishment is continuous. This event is triggered when the IRS Master File (IMF) records that the 30-day window following the Final Notice of Intent to Levy has expired without the taxpayer filing a Collection Due Process (CDP) appeal or establishing a formal resolution. The IRS then serves Form 668-W (Notice of Levy on Wages, Salary, and Other Income) directly to your employer's payroll department.
Legally, the trigger is the employer’s receipt of Form 668-W. Under Internal Revenue Code (IRC) § 6331(e), a levy on salary or wages has a "continuous effect" from the date the levy is first made until it is formally released. This means your employer is legally compelled to withhold a portion of your paycheck every pay period and send it directly to the U.S. Treasury. Failure of the employer to comply makes them personally liable for the tax debt, plus a 50% penalty under IRC § 6332(d). For the taxpayer, this represents a permanent reduction in take-home pay that often results in the inability to meet basic living expenses.
A wage garnishment is an administrative seizure of your income stream at the source. It is not limited by the 25% cap found in the Consumer Credit Protection Act (CCPA) that restricts private creditors. Instead, the IRS utilizes a formula found in IRC § 6334(d) to determine a "Minimum Exemption" amount—which is the only money you are allowed to keep. The IRS takes everything else.
Internally, the IRS categorizes this as Status 60 (Levy Active). The IRS sends Form 668-W along with Publication 1494, which contains the tables used by your employer to calculate your exempt amount based on your filing status and dependents. The garnishment remains in effect until the tax is paid in full, the 10-year CSED expires, or the IRS issues a Form 668-D Release of Levy. For the professional community, this is known as the "Maximum Leverage" phase of collection.
The IRS does not take a percentage; they take everything above a "floor." The amount you are allowed to keep is based on your Standard Deduction and the number of dependents you claim. For 2026, the calculations have been updated for inflation, yet they remain insufficient for most taxpayers living in high-cost areas.
A common "trap" occurs when taxpayers fail to return the "Statement of Dependents" to their employer within three days of the levy being served. If this form is not returned, the employer is legally required to calculate the exemption as "Married Filing Separately" with zero dependents—the highest possible garnishment rate, often leaving the taxpayer with almost nothing.
The consequences of a wage garnishment extend far beyond the immediate financial loss. The most severe impact is Career Damage. While federal law prohibits an employer from firing an employee for a single garnishment, the administrative burden of calculating and remitting an IRS levy creates significant friction. It signals a lack of financial responsibility to HR and can impact security clearances, professional licensing, or advancement in the financial and government sectors.
Additionally, because the garnishment is continuous, it creates a Debt Spiral. Interest under IRC § 6621 continues to compound daily on the unpaid balance. In many cases, the amount being garnished barely covers the accruing interest and penalties, meaning the taxpayer is losing their paycheck but the debt is not actually decreasing. This "Stagnant Debt" status can last for years until the 10-year collection statute finally expires.
Stopping a wage garnishment requires the IRS to issue Form 668-D. This will not happen because of a phone call; it requires a formal status change on the Master File. The three primary pathways are:
Strategy: Establishing a formal Installment Agreement is the fastest way to stop a garnishment. Once the IRS accepts the monthly payment plan, they are legally required to release the levy, as the agreement serves as the new compliance status.
Strategy: If the garnishment prevents you from meeting basic living expenses (housing, food, medical care), you can request a release under IRC § 6343. This requires a full financial disclosure via Form 433-F to prove your "Net Disposable Income" is zero.
Strategy: Filing an Offer in Compromise triggers a statutory "Stay" on most collection activity. While it takes months to process, it can be used to stop the garnishment if you can prove you have a lump sum available for settlement.
The biggest mistake taxpayers make is trying to "negotiate" with their employer. Your employer cannot help you. They are legally bound to follow the 668-W or face personal liability. Another mistake is quitting a job to stop a levy. The IRS will simply follow you to your next employer via your new W-4 filing—often within 60 days of your first paycheck at the new company.
Expert strategy involves the "Hardship Fax." A professional negotiator can often secure an immediate release by proving that the garnishment is preventing the taxpayer from paying for essential medical care or housing. This buys 30 days of full paychecks, which can then be used to fund a Settlement. We also audit the levy for Statute of Limitations (CSED) expiration; if the 10-year window has passed, the levy is illegal and all garnished funds must be returned.
A wage garnishment is a permanent tax on your labor. It will continue until the debt is paid, the statute expires, or you force a legal release. Clarity means moving from "Surviving on Exemptions" to a formal "Account Resolution." Every pay period you wait is a pay period where the IRS takes the majority of your earnings.
Stop the bleeding today. Use the Tax Assassin Command Center to calculate your exact exempt amount, model your hardship eligibility, and generate the 433-F financial package required to secure a Form 668-D Release of Levy before your next payday.
The IRS will continue to take your paycheck until you act. Launch the Command Center now to prove financial hardship or set up a payment plan and get your full paycheck back.
Launch TaxAssassin.app →