IRS Garnishment of Social Security Benefits

Since February 2002, Social Security benefits paid under Federal Old-Age, Survivors and Disability Insurance Benefits have been subject to the 15-percent levy through the Federal Payment Levy Program (FPLP) to pay delinquent tax debt. As of October 5, 2015, the IRS will no longer systemically levy the SSA Disability Insurance Benefits through the FPLP. The Old Age and Survivors Benefits will, however, continue to be levied at 15% through the FPLP.

The lump sum death benefits and benefits paid to children are not included in the FPLP. Additionally, Supplemental Security Income (SSI) payments, under Title XVI, and payments with partial withholding to repay a debt owed to Social Security are not levied through the FPLP. As of February 2011, the FPLP excludes certain delinquent taxpayers who receive social security payments if their income falls at or below certain established levels, based on the Department of Health and Human Services poverty guidelines.

Before Social Security benefits are included in the FPLP, the IRS will send you a final notice of their intent to levy, with appeal rights, if one has not already been issued. If they don't hear from you, or if you have already received this notice, the IRS will send you an additional notice CP 91 or CP 298, Final Notice Before Levy on Social Security Benefits, explaining that your Social Security benefits may be levied. Taxpayers have certain rights to appeal IRS levies.

Taxpayers have 30 days from the date of the IRS notice to make arrangements to pay their tax debt before the IRS will begin deducting 15 percent from their monthly social security benefit. See  Publication 594, The IRS Collection Process, and Publication 1, Your Rights as a Taxpayer, for additional information.

Because the FPLP is used to satisfy tax debts, the IRS may levy your Social Security benefits regardless of the amount. This is different from the 1996 Debt Collection Improvement Act which states that the first $750 of monthly Social Security benefits is off limits to satisfy non-tax debts. Fifteen percent of the Social Security benefit will be levied through the FPLP regardless of whether or not the remaining benefit sent to you is less than $750.

The IRS also has certain powers to impose manual levies of Social Security benefits that could exceed 15% depending upon the taxpayer's living expenses and income.

For consultation on IRS levies and other matters, please feel free to contact Gene Bowman with the Bowman Law Firm at 256-539-9850.  The Bowman Law Firm is located in Huntsville, Alabama.