New York, NY asked in Employment Law and Tax Law for New York

Q: Told my employer an IRS debt was settled, she deducted my pay anyway. Now I’m receiving refunds. Was that legal?

This happened during the shutdown so I assume they hadn’t processed anything. I insisted that it had been settled. She just responded with “we will deduct it from the following 6 pay periods, if you want to speak to them go ahead”

Im currently receiving refund checks, but it’s frustrating that refused to believe me and that with the lag after the shutdown and processing it took so long to settle.

Was what she did legal?

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2 Lawyer Answers
Bruce Alexander Minnick
Bruce Alexander Minnick
Answered

A: Yes. Not only was what your employer did legal--it was the most prudent thing that she could have done under the circumstances. Whether or not your employer "believed" you is not the point here. Why? Because your employer MUST obey the IRS lien or face stiff penalties. Be happy you are no longer under the IRS gun; and keep paying your taxes.

Eric Steven Day
Eric Steven Day
Answered
  • Tax Law Lawyer
  • Henderson, NV

A: When the IRS requests a wage garnishment from the employer, they are obligated to follow it or they will receive punishment. Even if your employer believed you, they will not be able to discontinue the wage garnishment without the IRS notifying them.

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