Anyone who runs a business likely had to deal with wage garnishment for one of their existing employees. It is the process of holding funds earned by your employees or contractors and giving a percentage of those funds directly to the government.

Why does this happen? Well, either the courts decided they owe a third party money and for some reason the employee/contractor isn’t paying, thus they put the burden on the company that is paying the employee/contractor. Or they owe the government taxes and for some reason they aren’t paying that either. Yes, it might be a dispute and the other party might be wrong, but the courts decided who was right and thus judgement has been set.

I personally never knew that the government goes to Google to withhold AdSense earnings from a publisher. But it happens.

A WebmasterWorld thread has two stories from different publishers, both who experienced their AdSense income being garnished by the government.

One who was hit by this shared his personal experience:

From my experience, I only had to withhold a percentage of the employee’s earnings, not all of it. So I am not sure why Google would hold ALL of the money but I do not have experience with wage garnishment for independent contractors nor with AdSense.

Forum discussion at WebmasterWorld.