Wage Garnishment in New York City
& Finding a Wage Garnishment Lawyer
If you did not file your taxes properly and owe back taxes to the IRS or the Comptroller of New York, don’t wait to get control of the situation. You could face significant penalties with far-reaching consequences. Both the IRS and the Comptroller of New York have numerous methods they can employ to seek repayment of unpaid tax debt, some of which can be devastating to a taxpayer’s individual financial situation.
An experienced tax attorney is a tremendous asset if you have received Notice and Demand for Payment from the IRS or the Comptroller of New York. They can be your first line of defense against aggressive debt collection tactics. Depending on the amount you owe and your record of filings and correspondence with these agencies, you could face severe collection action, including wage garnishment.
What Is Wage Garnishment?
Wage garnishment is a debt collection vehicle the IRS or the Comptroller of New York may enact against a taxpayer when the agency has notified the taxpayer of an unpaid debt but has been unable to pay it in full. Wage garnishment means the agency collecting a tax debt you hold takes a percentage of your paycheck. The agency filing for wage garnishment will coordinate with the taxpayer’s employer, who will deduct the approved garnishment amount from the employee’s paycheck until the employee has repaid their debt.
Typically when a creditor needs to pursue legal action against an insolvent debtor, they must obtain approval from the court to pursue wage garnishment. However, the IRS and the Comptroller of New York do not have to wait for the court’s permission. Once one of these agencies has initiated wage garnishment action against a taxpayer, it is very difficult for the taxpayer to have the garnishment lifted until their debt is paid in full.
Why Is Wage Garnishment Such a Severe Penalty?
Many different creditors can pursue wage garnishment against a debtor for an unpaid debt, but the court process required for most of them is lengthy. Generally, those in debt have some flexibility to pay the debt in question or securing an alternate resolution. Since the IRS and the Comptroller of New York do not need to meet this requirement, a taxpayer facing wage garnishment must act very quickly to challenge the garnishment determination or obtain release from the wage garnishment action.
Another key difference between government collection agencies and private creditors is the way these two types of parties calculate garnishments. Private creditors are beholden to state and federal laws, which restrict the amount they can deduct from a debtor’s pay. The IRS and the Comptroller of New York do not follow this formula for determining how much they may take and instead calculate how much a taxpayer may keep from each check. They determine their garnishment amount based on the taxpayer’s claimed W4 exemptions and paycheck frequency.
Wage garnishment is a major problem for many New York City taxpayers because they do not expect how much the IRS or the Comptroller of New York may take from each of their paychecks. It’s not uncommon for a taxpayer hit with wage garnishment for federal or state tax debts to be left with too little from their pay to afford basic living expenses. This can easily create a compounded financial disaster for the taxpayer, potentially even leading to further collection efforts from private creditors they are unable to pay.
Potential Remedies for Wage Garnishment in New York City, New York
Both the IRS and the Comptroller of New York are aggressive when pursuing wage garnishment. The process doesn’t take very long to start affecting your life if you are in this situation. One of the best things you can do when faced with wage garnishment for unpaid federal or state taxes is to contact an experienced tax attorney who can help you determine your options and the best available remedies for the situation.
You have the right to appeal a wage garnishment action against you at the state or federal level. There are also some alternate remedies available that may help you satisfy your tax debts without being subject to wage garnishment. However, attempting to pursue any of these options without an experienced legal advocate on your side is incredibly difficult. Navigating tax regulations is exceeding complex and subject to tight deadlines. An experienced tax attorney can help you pursue an appeal or alternative to wage garnishment quickly and effectively.
If you are unable to pay your tax debt in full to prevent wage garnishment, your tax attorney can potentially help you prove that you are experiencing legitimate financial hardship. Such a hardship would explain that it is impossible for you to repay your tax debt, qualifying you for “Currently Not Collectible” status. It’s also possible for your attorney to negotiate an Installment Agreement on your behalf, which allows you to repay your tax debt over time instead of paying a lump sum you cannot afford.
Another option is an Offer in Compromise, a legal procedure that could result in you settling your tax debt for less than you actually owe. Doing so is a complex process and subject to official review from the court, so it’s vital to have an attorney assist you in the creation of your Offer in Compromise to avoid potential criminal penalties for perjury if you leave out key information. Yet another potential solution is to declare bankruptcy, a process with which an experienced tax attorney may also assist.
Why You Should Find a Tax Attorney for Wage Garnishment Help
Do not wait when it comes to wage garnishment for unpaid taxes. Both the IRS and the Comptroller of New York pursue unpaid tax debts aggressively; the longer you wait, the more extensive the effects of the wage garnishment will be. Most people who have their wages garnished for unpaid taxes feel the effects for years.
Contact Delia Law today to schedule a consultation with an experienced tax attorney who can help you address your wage garnishment problems with the IRS or the Comptroller of New York. Our team has extensive experience providing wage garnishment help in New York City, New York, and can thoroughly assess your options.
New York-Specific Tax Laws
New York residents are required to pay taxes on income that was earned as well as for federal taxes. In fact, some people who don’t even live in New York must pay state taxes. If you lived elsewhere but acquired the money through a source in New York, you must pay state taxes on that income.
There are four main types of taxes in New York:
- State income tax. New York State has a graduated income state tax, which means your tax rate increases as your income increases. The state’s tax rates range from 4% to 10.90%. For example, if you make under $8,500 annually, you will only be subjected to a 4% tax rate. However, if you make $25,000,001 and over, you are now facing the higher end of the state’s tax bracket at 10.90%.
- Local tax. The local tax is a county-specific tax, and the rates also differ based on income. For example, in Tompkins County, the local tax rate is 4%. In contrast, in Suffolk County, the rate is 4.25%. The variation in local tax rates can make a significant difference in the overall amount of taxes you owe.
- City tax. City taxes are only applicable to those who live or have earned money in New York City. This applies to individuals, trusts, estates, partnerships, S-corporations, and corporations. The city tax rate is 3.078%, 3.762%, 3,819%, and 3.876% depending on the bracket your income qualifies for.
- Corporate tax. If you are a business owner, you are also required to pay corporate income tax. The tax rate on your corporate income ranges from 6.50% to 7.25%. These taxes generated from businesses is one of the main sources of revenue for the state of New York, and it helps to fund many of the state’s programs and services that benefit its residents.