The IRS can garnish the wages of both you and your spouse for joint tax debt. The IRS policy is generally to garnish the wages of the higher earning spouse, but they may deviate from this rule if you’ve flagrantly refused to pay your tax debt.

Wage Garnishment

When you owe tax debt and the IRS has sent you several notices demanding payment, you may be at risk for enforced collections. A wage garnishment is a common IRS collection tactic, which involves taking a portion of each paycheck you receive and applying it to your tax debt.

A taxpayer gets an exempt amount that cannot be garnished based on their filing status and number of dependents. For example, a married taxpayer who files jointly and has two dependents will receive $2,733.33 per month. The rest of your wages will be sent to the IRS until your tax debt is paid off in full.

If you receive any bonuses or commissions, the IRS can also seize 100% of these amounts.

Joint Tax Debt

When you owe tax debt on a joint return, the IRS can go after either or both spouses to collect the money.  The Internal Revenue Manual states that it is IRS policy to generally levy only the wages of the higher-earning spouse unless the taxpayer has committed flagrant misconduct.

Flagrant misconduct can involve tax fraud, cases where the Trust Fund Recovery Penalty has been assessed, or a pattern of uncooperative behavior to delay collection. In these cases, the IRS can garnish the wages of both spouses.

If you are still married, only one spouse can claim the standard deduction for figuring the amount of exempt wages. If you are no longer married, both spouses can claim the standard deduction for their respective filing statuses.

Avoiding Wage Garnishments

You are generally better off making monthly payments on an IRS installment agreement than having your wages garnished. In particular, taxpayers with high incomes may pay much less each month by negotiating an installment plan.

You should also see if you could benefit from other tax resolution strategies, such as innocent spouse relief. A tax resolution attorney can go over your case and advise you how to proceed.

Have a tax question? Contact Venar Ayar.