IRS LEVY AND SOCIAL SECURITY BENEFITS

IRS LEVY AND SOCIAL SECURITY BENEFITS


Recently, on March 6, 2015 during Joe Banister's radio program a question arose about the levy upon social
security benefits. In response it was explained that the IRS can levy up to 15% of the social security benefits,
and in some cases will take the entire amount. I also informed the listeners that currently the IRS had in
effect a policy not to levy social security benefits. While this is true, the policy, as explained by the IRM
(Internal Revenue Manual), depends upon your financial condition, and your past and current voluntary
compliance with federal income tax laws which may affect you. Thus, the policy I discussed on the show is
subject to the discretion of the IRS and is not law; which means the IRS can and will levy social security
benefits.


Nevertheless, as I said on the show, the IRM states that “RSDI (or OASDI) payments are also subject to levy
under FPLP. Although IRC 6331(h) permits the service to levy on up to 15 percent of SSI payments, the
Service will not pursue these levy sources at this time. For further details of FPLP see IRM 5.11.7.2.1.1,
IRS/FMS Interagency Agreement - Federal Payments Subject to the FPLP .also see IRM 5.11.7.2.5.1, FPLP
or Paper Levy (Form 668-A/668-W). “  See, IRM 5.11.6.1.1 (09-26-2014) - Social Security . (emphasis
added)


The IRS is limited to taking only 15% of your social security benefits by levy, unless they issue a manual
paper levy. Thus, if the IRS directs an automated social security levy, which is one of the most readily used
IRS collection tools, it is limited to 15% of the benefit.


However, the IRS is not limited by IRC 6331(h) to taking 15% of a taxpayer’s social security benefits. The
IRS can issue a manual levy that can continuously take all of the social security benefits under Internal
Revenue Code section 6331(a), which permits levy on all wages, salary or other income (which would include
social security). The 15% automatic levy provision is a supplement to the manual levy power. The IRS can
chose the manual approach if it deems fit and attempt to collect more than the automated 15%. The manual
levy requires the assignment of an IRS Revenue Officer, while the automatic levy is a paperless transmission.
The manual levy is usually made in extreme circumstances where there is a lack of cooperation.


But, while the IRS can manually levy up to 100% of social security benefits, you have the right to claim an
exemption against the levy. This exemption is found at IRC 6334(a)(9) which permits one to receive a
minimum amount of the social security payment and defeat all or part of the manual levy.
Below you will find hyper-links to the IRM dealing with IRS levies which will prove informative for those of
you facing that possiblity in the future. To be fore-warned is to be fore-armed.


http://www.irs.gov/irm/part5/irm_05-011-005.html#d0e130
http://www.irs.gov/irm/part5/irm_05-011-006.html#d0e1311
http://www.irs.gov/irm/part5/irm_05-011-001.html
http://www.irs.gov/irm/part5/irm_05-011-006.html#d0e387
http://www.irs.gov/irm/part5/irm_05-011-002.html#d0e100

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News Flash

Uncertainties of the Income Tax
(Courts At War with Themselves)

by Larry Becraft, Attorney


For several years now, a variety of high public officials have openly declared that the federal income tax laws are incredibly complex and need to be either substantially revised or scrapped.   But after making such statements, these officials invariably fail to identify what  specific parts of  the tax laws suffer from this condition, choosing instead to conceal them. Are the objectionable parts of the federal tax code secretly and quietly discussed behind closed Congressional committee doors? If they are, why doesn't someone inform the American public of these deficiencies so that they may likewise participate in this debate? Is it possible that it is the major and not various minor features of the tax laws which are complex, even uncertain? Is it possible that these major features are so fundamentally flawed that they simply cannot be repaired? If so, what is the legal consequence of this complexity?

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