Can the US government garnish 100% of your income?

Question

I was reading a Wikipedia article about Karl Hess. The article contained this quote (emphasis mine):

During that time [1967], President Johnson, a Democrat, ordered the Internal Revenue Service to audit him [Hess]. When Hess asked if a certain deduction he had claimed was right, his auditor reportedly replied, "It doesn't matter if it's right; what matters is the law." Incensed that the auditor would show deference to what was "law" over what was "right," Hess sent the IRS a copy of the Declaration of Independence with a letter saying that he would never again pay taxes. The IRS charged him with tax resistance, confiscated most of his property and put a 100% lien on his future earnings. When implementing the penalty, the IRS told Hess that he no longer would be permitted to possess money; he reminded them that without money he could not buy food and would soon die. The IRS said that was his problem, not theirs. Remarkably, Hess was never incarcerated on this matter, probably due to astute, pro bono legal representation and his status as a folk hero. He was supported financially thereafter by his wife and used barter to keep himself busy.

Is it true that the IRS can decree that an individual will no longer "be permitted to possess money?" That seems hyperbolic and extreme. I definitely understand that the government can garnish wages for various reasons but it seems incomprehensible that garnishing all of your future income is lawful. If this action is lawful did this really happen to Karl Hess?

Answer 1

No, the IRS cannot garnish 100% of your income.

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Before I begin, obviously, IANAL. Some of my sources will come from law advice websites that also have that disclaimer.

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There is a process that the IRS will follow before any garnishment of wages will take place. According to Nolo, in an article titled "Can the IRS garnish my wages for taxes?", they explain the process that the IRS goes through.

The IRS will not start garnishing your wages without giving you notice and an opportunity to make payment arrangements. But, unlike most other creditors, it does not have to first use[sic] you and get a judgment in order to start the garnishment process.

To start the process, the IRS must send you a written notice stating the amount you owe. The notice must itemize all of the charges (tax, penalties, and interest) and give you a date by which you must pay the balance in full.

If you don't comply with the demand for payment within the stated time, the IRS will then explore how it may most effectively force you to pay the tax. This may include seizing your assets, placing liens on your property, taking future refunds, and garnishing your wages.

So to start, the IRS will attempt to reach a resolution with the taxpayer before forcibly seizing property, assessing leins, etc. Writing a check for the missing amount, setting up a payment plan, or negotiating a settlement will forgo the IRS collection process, of which wage garnishment is a part.

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However, even if you do not come to a settlement with the IRS, they are required to leave a certain amount of your wages.

The IRS will take as much as it can and leave you with an amount that the tax code says is necessary for you to pay for basic living necessities. The amount that you can keep corresponds to the number of exemptions you claim for tax purposes.

The article links to this datasheet provided by the IRS which details "an individual's income that is exempt from a notice of levy used to collect delinquent tax" for 2017. Note that these protections have been in place since at least 1977.

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The source for the story linked within the Karl Hess Wikipedia page seems to be from the book "We Won’t Pay!: A Tax Resistance Reader" by Robert W. McGee and David M. Gross. The relevant section is from pages 437 to 438, reproduced here.

About 10 years ago, back in the days when I worked for Republican politicians battling Democratic presidents, constant harassment by the Internal Revenue Service caused me to snap my twig and just stop paying taxes altogether. I won't go into the tedious details, but I will note that I announced my decision to the I.R.S. by sending along a copy of the Declaration of Independence. By return mail, my tax collector informed me that a lien would be placed against all my property, that they would take every cent, literally 100 percent, of every penny I might earn and that they could discern.

I asked, then, how they would handle it if I decided to just barter for a living. They had a ready answer: "If you get some turnips for your work, we'll take the turnips."

There are a number of things to note in this story

1. The IRS supposedly was communicating with Mr. Hess via mail. However, despite paper records of this correspondence, there seems to be no proof offered besides the word of Mr. Hess.
2. The IRS never told Mr. Hess that he "no longer would be permitted to possess money"
3. With the attached IRS form above, the IRS is not permitted to put a lien on 100% of a person's income, and written correspondence would be proof of this threat.
4. There is no discussion detailed in the book where Mr. Hess tells the IRS "without money he could not buy food and would soon die".
5. The whole incident was started because Mr. Hess decided he did not want to pay taxes anymore after being audited. Mr. Hess, in the book, believed that he was audited in retaliation for "his service to a losing presidential candidate." Note that Mr. Hess was not an advisor, or a close aide, but a speechwriter for Barry Goldwater. Also note that the audit rate around that time, according to this article, was 5.6% of all Americans.
6. There is no indication that, even if all of the above were true, that the IRS actually garnished 100% of his wages.

Answer 2

Yes, in some strange cases the US government can take 100% of your income. The case I can think of is thanks to the Son of Sam laws and their descendants. If you were in solitary and not making any money stamping license plates but received payments for telling your story, the government could take 100% of that money. There are currently people this would happen to thanks to the conditions of their plea bargains.

There would be other cases for very wealthy people, but that has to do with tax avoidance and we would never get any facts from someone hiding half their money offshore. Or if you were paid entirely in cash and decided to civil asset forfeiture all your money when passing a police officer or IRS agent. If you are lucky, persistent and lawful they might give it back