15.7 IRS Levies
15.7 IRS Levies aetrahan Fri, 02/03/2023 - 14:39Immediately before a levy of Social Security benefits, the taxpayer should receive a CP 91 or CP 298, Final Notice Before Levy on Social Security Benefits. The CP 91/298 notices should have been preceded by a Notice of Intent to Levy and Notice of the Right to a Collection Due Process (CDP) Appeal. The taxpayer has 30 days to respond to the Final Notice and may still appeal through the Collection Appeal Program even though the right to a CDP appeal has been lost.1 If it has been less than a year since the Notice of the Right to a CDP Appeal, a taxpayer who missed the 30-day period for requesting a CDP appeal may also have a right to an “equivalent hearing” before an IRS appeals officer.2
Under the Federal Payment Levy Program, the IRS may continuously levy 15% of monthly Title II Social Security benefits and most welfare benefits other than SSI. The IRS no longer levies against Social Security benefits that are less than $750 per month. Levies against Social Security benefits greater than $750 can often be prevented or removed by applying for Currently Not Collectible status. It is important to respond promptly to a proposed Notice of Levy on Social Security benefits. Once the levy is imposed, it can take time to get the levy removed and wrongfully levied amounts refunded. If the IRS levies in excess of what is allowed by law, you have 9 months in which to request a return of the excess amount.3
Beginning February 2011, the IRS may exclude Social Security recipients with income less than 250% of the federal poverty guideline from the Federal Payment Levy Program if Social Security is their sole source of income.4 However, because the IRS has refused to apply the 250% poverty filter to non-filers, low-income taxpayers still receive Social Security levies. A low-income Social Security recipient who gets a levy notice may be a non-filer and need assistance with filing any delinquent returns.