If you owe back taxes, one of the most common, and most stressful, questions is whether the IRS can take money directly from your paycheck.
The short answer is yes. The Internal Revenue Service (IRS) has the legal authority to garnish wages through a process called a wage levy. However, this action does not happen automatically or without notice. There are specific legal steps the IRS must follow before your employer is required to withhold part of your earnings.
This article explains how wage garnishment works in Maryland, what protections apply, and what options may be available if you are facing enforcement.
What Is an IRS Wage Garnishment?
Technically, the IRS does not use the term “garnishment.” Instead, it issues a wage levy.
A wage levy is a legal order sent directly to your employer requiring them to withhold a portion of your wages and send it to the IRS to satisfy unpaid tax debt.
Unlike many private creditors, the IRS does not need to obtain a court judgment before levying wages. Its authority comes from federal tax law.
Does the IRS Have to Notify You First?
Yes. Before issuing a wage levy, the IRS must complete several required steps:
- Assess the tax and send you a bill (Notice and Demand for Payment).
- Send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing (commonly issued as Letter 1058 or LT11).
- Provide you at least 30 days to request a Collection Due Process (CDP) hearing.
If you request a CDP hearing within that 30-day window, the IRS must pause enforcement action while the hearing is pending.
If you do not respond within the required timeframe, the IRS may proceed with a levy.
How Much of Your Wages Can the IRS Take?
This is where many people are surprised.
For private creditors in Maryland, wage garnishment is generally limited under federal law to:
- 25% of disposable earnings, or
- The amount by which weekly wages exceed 30 times the federal minimum wage, whichever is less.
However, the IRS is not bound by those same 25% limits.
Instead, the IRS calculates the amount you are allowed to keep using tables published annually (Publication 1494). The exempt amount depends on:
- Your filing status
- The number of dependents you claim
- Your pay frequency
Everything above the exempt amount can be levied.
In some cases, this means the IRS may take significantly more than 25% of your paycheck.
Is an IRS Wage Levy Ongoing?
Yes. An IRS wage levy is typically continuous, meaning it remains in effect each pay period until:
- The tax debt is paid in full
- The IRS releases the levy
- You enter into an approved resolution program
- The collection statute expires (generally 10 years from assessment, with exceptions)
This differs from a one-time bank levy, which attaches only to funds present in the account at the time of levy.
How Does This Work in Maryland Specifically?
Because the IRS is a federal agency, its levy authority applies nationwide, including Maryland.
Maryland’s state garnishment limits apply primarily to private creditors and certain state-level debts. Federal tax levies follow federal procedures and override state garnishment percentage caps.
If you work for an employer in Maryland and the IRS issues a wage levy, your employer is legally required to comply. Failure to do so could make the employer liable for the amount that should have been withheld.
Can You Stop an IRS Wage Garnishment?
In many cases, yes, but timing is critical.
Once a levy is issued, you still have options. The IRS may release a levy if:
- You enter into an Installment Agreement
- You qualify for Currently Not Collectible (CNC) status due to financial hardship
- You submit or secure approval for an Offer in Compromise
- The levy is creating immediate economic hardship
- The levy was issued in error
The most effective time to intervene is before the levy begins, during the 30-day window after receiving the Final Notice of Intent to Levy.
However, even after wages are being withheld, it may still be possible to negotiate a release.
What Is “Currently Not Collectible” Status?
If paying your tax debt would prevent you from covering necessary living expenses, the IRS may classify your account as Currently Not Collectible.
In that status:
- Wage levies are generally released
- Active collection efforts pause
- Penalties and interest continue to accrue
CNC status does not erase the debt, but it can provide immediate financial breathing room.
What About Bankruptcy?
In some cases, bankruptcy may temporarily stop IRS collection through the automatic stay. Whether tax debt is dischargeable depends on several factors, including:
- The type of tax
- The age of the tax
- Whether returns were filed properly and on time
This is a complex area of law and requires careful legal analysis.
How to Protect Yourself Before a Levy Happens
If you have received IRS notices, the worst approach is ignoring them.
Early action can significantly expand your options. Practical steps include:
- Confirming all required tax returns have been filed
- Verifying the total balance owed
- Reviewing whether penalties may qualify for abatement
- Exploring resolution options before enforcement begins
Once a levy is in place, negotiating becomes more reactive. Addressing the issue proactively often allows for more favorable outcomes.
Key Takeaways
- Yes, the IRS can garnish (levy) your wages in Maryland.
- The IRS does not need a court order to do so.
- You must receive prior notice and have a 30-day window to request a hearing.
- IRS levy limits differ from Maryland’s standard 25% garnishment cap.
- A wage levy is continuous until resolved.
- Several resolution options may stop or prevent garnishment.
Final Thoughts
An IRS wage levy can feel overwhelming, especially when it affects your ability to meet everyday financial obligations. But it is not a random or immediate action. It follows a structured legal process, and there are defined rights and procedural safeguards available to taxpayers.
If you are concerned about wage garnishment or have received a Final Notice of Intent to Levy, seeking experienced legal guidance early can make a significant difference in how the matter is resolved.
Understanding your rights, and acting before enforcement escalates, is often the most important step you can take. Book a consultation today with Beverly Winstead and know your rights.