IRS Form 668-W: Wage Garnishment

IRS Form 668-W — "Notice of Levy on Wages, Salary, and Other Income" — is the wage garnishment levy that the IRS serves directly on your employer. Once your employer receives Form 668-W, they are legally required to begin withholding from your paycheck immediately and continue withholding until: (1) the total tax debt is paid, (2) the levy is released by the IRS, or (3) the Collection Statute Expiration Date (CSED) passes. Your employer has no choice — refusing to comply exposes them to personal liability for the amount they failed to remit plus a 50% penalty.

The IRS wage levy is not like a regular creditor garnishment. A typical civil judgment creditor can garnish at most 25% of your disposable earnings under the Consumer Credit Protection Act. The IRS is exempt from this limit. Instead, the IRS uses a much more aggressive formula: your take-home pay minus your "exempt amount." The exempt amount is computed from IRS Publication 1494 tables — for a single taxpayer with no dependents, the exempt amount is roughly equivalent to the standard deduction + personal exemption divided by the number of pay periods. This means the IRS can take 60-80% of your paycheck in many cases, leaving only a bare subsistence amount.