Published on: August 15, 2018 Last modified: November 20, 2020

An IRS Tax Levy on Social Security Payments

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    The IRS has a number of tools at its disposal to get individuals to pay their taxes. The penalties they implement can be severe.

    Just as importantly, penalties and interest can begin immediately for unpaid taxes. Besides charging taxpayers an annual interest rate for back taxes, they may also assess a late penalty fee at 0.5 percent along with a maximum penalty of 25 percent.

    The penalties gradually get more severe the longer it takes to pay the back taxes. The notices will gradually begin to arrive. Tax liens and other collection efforts will likely begin after about two to six months.

    Finally, after around three months you may face IRS tax levies as well as passport restrictions. A levy involves an actual seizure of items such as bank accounts, paychecks, property and even Social Security payments.

    How does a levy concerning Social Security payments work?

    When a levy occurs, there will usually be a waiting period of around 10 days before any seizure actually occurs. In a levy notice, the IRS must also help you understand your administrative appeal options. This can include the right to enter into an installment agreement in order to avoid having the levy take place.

    While the IRS generally has a 10-year-limi on collecting tax debt, a levy against one’s Social Security benefits is different. Such a levy will continue until all the back taxes along with penalties and interest are entirely paid.

    Know the Social Security payments

    Many taxpayers are not even aware that the IRS can levy Social Security benefits. Since most individuals depend upon their Social Security payments to meet their daily needs, a levy on such payments can create significant stress. Understanding the best way to resolve such a levy is therefore extremely important.

    It’s always a good idea to know what penalties you may face, and the best methods for alleviating such costs. Seasoned tax attorneys understand the options that are available. Having worked with others in similar circumstances, they also understand what steps to take to resolve a levy most favorable for the individual taxpayer. A tax law professional can carefully examine your situation and provide the legal guidance you need to successfully navigate your IRS tax matter.

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