Can The IRS Take My Social Security?

by Kent Anderson, Esq.

October 20, 2007

Yes they can; at least a portion of the Social Security benefit can be taken by the IRS if you owe tax.  Social Security payments are not protected from enforced collection to recover money owed to the US Treasury.  The IRS can levy against Social Security payments in two different ways.  There is a 15% automated levy and an IRS manual levy that can take a much larger portion of the payment.

The first Social Security collection option, the Federal Payment Levy Program allows an automatic deduction in the amount of 15% of each monthly benefit that goes to the IRS to pay outstanding debt.  The second option, a continuous levy on wages, salary or other income, takes the entire amount above a minimum exemption. The amount of monthly income exempt from levy is based on the tax withholding status of the taxpayer. For example, a single taxpayer without additional dependants is entitled to a minimum monthly exemption from levy of $729.17. The IRS provides a chart each year that indicates the amount of benefit, wage or other payment exempt from levy.

If the IRS levy causes a financial hardship, it may be possible to reduce the amount taken or stop the levy altogether. As I discussed in an earlier article, the IRS maintains standards for collection and is usually willing to work out an agreement for voluntary payment. If an agreement is reached, the IRS will release the levy.

Even if a taxpayer is unable to make payments on the debt, a full levy release may be possible under appropriate circumstances. If the taxpayer can not meet minimum allowed living standards with the levy in place, the IRS must reduce or release the levy. However, they will not do so unless financial information and supporting documentation is provided to the IRS for their analysis.

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I was admitted to practice in 1978. I am certified as a Consumer Bankruptcy Specialist by the American Board of Certification. I regularly speak on tax and bankruptcy issues at state, regional and national conferences. Years of experience in practice before the Internal Revenue Service and Oregon Department of Revenue have given me the background to resolve a large variety of consumer tax issues.

Last modified: October 22, 2012