Can the IRS Garnish Social Security Income? Understanding the Facts

For those facing IRS collection actions, one of the questions that may arise is whether the IRS can garnish Social Security benefits to satisfy tax debts. The answer to this question is nuanced, and it’s important to understand the relevant regulations and procedures outlined by the IRS.

The Federal Payment Levy Program (FPLP)

Since February 2002, Social Security benefits paid under Title II – Federal Old-Age, Survivors, and Disability Insurance Benefits have been subject to a 15-percent levy through the Federal Payment Levy Program (FPLP) to pay delinquent tax debts. This means that if you owe taxes to the IRS and receive Social Security benefits under Title II, a portion of your benefits can be withheld to satisfy the outstanding debt.

It’s important to recognize that the FPLP is specifically used to satisfy tax debts, and the IRS may levy your Social Security benefits regardless of the amount owed. This is distinct from the provisions of the 1996 Debt Collection Improvement Act, which safeguarded the first $750 of monthly Social Security benefits from non-tax debt collections. Under the FPLP, 15 percent of your Social Security benefit can be levied, irrespective of whether the remaining benefit falls below $750.

Exceptions and Exclusions

It’s important to note that not all Social Security benefits are subject to levy under the FPLP. Lump sum death benefits, benefits paid to children, and Supplemental Security Income (SSI) payments under Title XVI are not included in the program.

Since October 5, 2015, the IRS no longer systematically levies Social Security Disability Insurance Benefits through the FPLP, although Old Age and Survivors Benefits continue to be subject to the levy.

Income Thresholds and Exemptions

The FPLP excludes certain delinquent taxpayers receiving Social Security payments if their income falls at or below specific levels established by the Department of Health and Human Services poverty guidelines. This provision aims to provide relief to individuals with limited income facing financial hardship.

Notice and Appeal Rights

Before your Social Security benefits can be levied through the FPLP, the IRS is required to send you a final notice of its intent to levy, along with appeal rights if applicable. If you receive such a notice, it’s important to understand your options and the timeframe for responding.

You typically have 30 days from the date of the notice to make arrangements to pay your tax debt before the IRS begins deducting 15 percent from your monthly benefit.

Final Thoughts

While the IRS does have the authority to garnish Social Security benefits through the Federal Payment Levy Program to satisfy tax debts, there are exceptions, income thresholds, and appeal rights afforded to taxpayers. It’s important to understand your rights and obligations if you receive a notice from the IRS regarding the levy of your Social Security benefits and to seek professional advice if needed.

For additional information about the IRS collection process and your rights as a taxpayer, I recommend consulting Publication 594 and Publication 1, respectively. Understanding the complexities of these regulations can help you navigate the situation effectively and make informed decisions regarding your tax obligations.

If you’re facing uncertainty about your Social Security benefits and tax debts, don’t figure it out alone. At the law office of Steven N. Klitzner, we’re here to provide clarity and support. Contact us at (305) 564-9199 or use our website contact form for a free and confidential consultation. Let’s explore your options and devise a plan to safeguard your financial well-being.