Federal Payment Levy Program levies
on federal payments
made to taxpayers who owe Federal taxes. Under the program, the
may take up to 15 percent of Federal payments made to you and
apply them against your Federal tax debt. Other levy programs may
withhold additional monies from your payments. This levy continues
until the entire amount of your Federal tax debt is repaid or
other payment arrangements are made.
types of payments that may be levied include:
employee salaries or retirement annuities, and
and military vendor payments and travel payments.
types of Social Security payments that may
not be levied include:
Security Income payments,
Sum Death benefits,
benefits (special benefits for people
who were age 72 and over by 1971), and
undergoing partial withholding to repay a debt to Social Security.
he Federal Payment Levy Program affects
taxpayers who have an outstanding tax liability. If you currently
owe Federal taxes and you receive payments such as Social
Security, you may be affected.
taxpayers with outstanding tax debts are subject to the Federal
Payment Levy Program. If you are subject to the levy, you will
receive a notice from the
. You will then have 30 days to respond. Once your payments
are levied, you will receive a notice
indicating the amount of the deduction.
you have an outstanding tax liability and you
believe you will be affected, you can take
steps now to prevent having your payments levied.
first step is to determine if you owe the
tax. Some possibilities for relief from your Federal tax debt
Spouse Relief (see Publication 971, Innocent
Spouse Relief), or
may not have responded to an earlier
notice and the
assessed the liability based on certain assumptions.
You may be able to ask the
to reconsider the assessment (see Publication 3598, What
You Should Know About the Audit Reconsideration Process).
next step is to determine if you are able to
pay all or part of the tax. If you are unable
to pay your liability in full, you may want to consider one of the
into a monthly installment agreement,
into an Offer in Compromise, or
may ask to be classified as currently not collectible. Being
currently not collectible does not mean the debt goes away. It
means that the
you cannot afford to pay the debt at this time. Penalties and
interest will continue to be added to the debt.
more information on these alternatives, refer to Publication 594, The
you are a guardian or conservator, you will need a Power of
Attorney before the
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.
the taxpayer may be entitled to an equitable tolling of the
statute of limitations for any period of the taxpayer’s life
during which it was medically determined that taxpayer was unable
to handle their own affairs and there was no one authorized to act
on the taxpayer’s behalf.