Protecting Your Social Security Income (SSI) from IRS Garnishments
As our society ages and Baby Boomers retire at an increasing rate, securing your Social Security Income (SSI) becomes crucial. While approximately 50% of U.S. citizens have additional investments and savings for retirement, the other half rely solely on SSI checks. This reliance makes it imperative to understand the potential risks associated with IRS actions, particularly garnishments.
Can the IRS Garnish My Social Security Benefits?
Yes, the IRS can garnish up to 15% of your SSI if you are classified as tax delinquent—meaning you owe outstanding taxes. This garnishment is executed through the Federal Payment Levy Program (FPLP), which was enacted in 2000. While the IRS can levy your benefits, they must adhere to specific regulations and limitations.
Notification Process
The IRS is required to send you two letters before beginning to garnish your SSI. They cannot take any action until 30 days after you receive the second letter, providing you with an opportunity to respond and potentially appeal their decision.
What Can the IRS Garnish?
While the IRS can garnish a significant portion of your benefits, they cannot take all your SSI payments. The law protects you by allowing a maximum deduction of 15%. However, the IRS can also levy:
- Disability insurance benefits
- Federal old-age and survivors trust funds
- Federal employee retirement annuities
- Some federal salaries
- Federal payments from contractors doing business with the U.S. government
Additionally, the IRS can seize assets such as vehicles, real estate for back taxes owed, bank accounts, and wages.
What Is Exempt from IRS Garnishment?
Certain benefits are exempt from IRS levies, including:
- Benefits awarded to children
- Lump sum death benefits
- VA disability benefits, as these are critical for many veterans
- Exemptions for those living below the poverty line
Can I Prevent the IRS from Garnishing My SSI?
Although the IRS has favorable conditions under the FPLP, you do have options to appeal their garnishment decision within the 30-day notice period. Your options include:
- Paying the debt in full
- Negotiating an offer in compromise or installment payments
- Declaring financial hardship, which could exempt you from garnishment
- Filing an appeal against the IRS’s decision
It’s crucial not to ignore the Final Notice of Intent to Levy, as this indicates that the IRS is already moving forward with the garnishment process.
Work with a Tax Professional for Support
Navigating IRS regulations can be challenging, particularly when it comes to protecting your SSI income. Working with a tax professional can help you resolve issues before they escalate to garnishment. By consulting our tax debt relief specialists as soon as you receive a notice, you can maximize your chances of a favorable resolution.
For expert assistance, visit la-twins.com or contact us today!
