Federal Payment Levy Program

 

What is a levy on Social Security Benefits?

All taxpayers with outstanding tax debts are subject to a levy on assets and income sources, including Social Security benefits. There are two ways the IRS may levy upon your Social Security benefits – via the automated Federal Payment Levy Program (FPLP) or by a manual (non-FPLP) levy. Under the FPLP, the IRS is able to levy up to 15 percent of your Social Security benefits each month; there is no similar restriction on how much the IRS can receive from manual levies. There is an exemption amount, however, for reasonable living expenses. This brochure provides information on FPLP levies. Once a levy is in place, the IRS may withhold monies from the federal payments you receive. This levy may continue until the entire amount of your federal tax debt is repaid or other payment arrangements are made, or the debt becomes unenforceable by law. 

The types of Social Security payments that the IRS levies under the FPLP include:

• Retirement, Survivors, and Disability Insurance program payments.

The types of Social Security payments that the IRS does not levy under the FPLP include:

• Children’s benefits;
• Supplemental Security Income payments; and
• Lump sum death benefits.

Will I be subject to a levy?

If you are subject to the levy, you will receive a notice from the IRS. If you do not pay the tax or contact the IRS within 30 days of the date of the notice, the IRS is allowed to levy on your Social Security benefits. Once your payments are levied, you will receive a notice indicating the amount of the levy. If you have an outstanding tax liability, you can take steps now to prevent having your payments levied.

What should I do if I am subject to a levy?

The first step is to determine if you owe the tax. Some possibilities for relief from your federal tax debt include: 

• Audit Reconsideration (see Publication 3598, What You Should Know About the Audit Reconsideration Process). You may not have responded to an earlier IRS notice and the IRS may have assessed the liability based on certain assumptions. You may be able to ask the IRS to reconsider the assessment.
• Innocent Spouse Relief (see Publication 971, Innocent Spouse Relief). Generally, both you and your spouse are each responsible for paying the full amount of any tax, interest, and penalties due on your joint return. However, if you qualify for innocent spouse relief, you may be relieved of those amounts of your spouse (or former spouse) that were incorrectly reported on the joint return.

What if I cannot pay the amount I owe in full?

The next step is to determine if you are able to pay all or part of the tax you owe. It is important that you call the IRS immediately. If the IRS determines that you cannot pay any of your tax debt due to an economic hardship, the IRS may temporarily delay collection until your financial condition improves. Please be prepared to provide your monthly income and expenses so they can help you resolve this tax matter. If you are unable to pay your liability in full, you may want to consider one of the following collection alternatives: 

• Enter into a monthly installment agreement; 
• Enter into an Offer in Compromise; or 
• Request to be classified as currently not collectible. Being currently not collectible does not mean the debt goes away. It means that the IRS has determined you cannot afford to pay the debt at this time. Penalties and interest will continue to be added to the debt.

For more information on these collection alternatives, refer to Publication 594, The IRS Collection Process.

What if you are a guardian or conservator for a taxpayer?

If you are a guardian or conservator, you will need a Power of Attorney before the IRS can talk to you about tax problems and make any payment arrangements. A Power of Attorney can be obtained by completing Form 2848, Power of Attorney and Declaration of Representative. If the taxpayer is incapacitated, you may still complete a Form 2848; however, you will need to attach the legal documentation that allows you to act on the taxpayer’s behalf.

If you have questions or need information concerning a levy on Social Security benefits, you can contact the IRS toll-free at 1-800-829-7650 to resolve your account.

Where can I go if I contact the IRS and I still need assistance resolving my levy issue?

Low Income Taxpayer Clinics
Low Income Taxpayer Clinics are independent organizations that provide low income taxpayers with representation in federal tax controversies with the IRS for free or for nominal charge. The clinics also provide tax education and outreach for taxpayers with limited English proficiency or who speak English as a second language. IRS Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area and is available through the IRS website at www.irs.gov or at your local IRS office.

Taxpayer Advocate Service
The Taxpayer Advocate Service is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should.

You can contact the Taxpayer Advocate Service by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TTD 1-800-829-4059 to determine whether you are eligible for assistance. You can also call or write to your local Taxpayer Advocate, whose phone number and address are listed in your local telephone directory and in IRS Publication 1546, Taxpayer Advocate Service - Your Voice at the IRS. You can file Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance order), or ask an IRS employee to complete Form 911 on your behalf.

For more information, go to www.irs.gov/advocate.

Please do not contact the Social Security Administration regarding your federal tax matter.

All publications are available at www.irs.gov/formspubs, or by calling 800-829-3676.


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