Fact Sheet
Internal Revenue Service
Collects Overdue Tax Obligations
from Social Security Beneficiaries
Social Security beneficiaries who owe federal tax to the Internal Revenue Service (IRS), need to pay their debts. If not, IRS can reduce a beneficiary's benefit by 15 percent a month to pay the debt. IRS will send a warning notice "Final Notice Before Levy on Social Security Benefits" beginning October 1, 2001. Beneficiaries who owe a delinquent federal tax will receive a notice before IRS reduces a Social Security benefit. The notice explains—
-
the debt amount;
-
how to pay the debt; and
- what to do if the beneficiary cannot pay the debt.
Beneficiaries who have questions should call IRS at 1-800-829-7650. Call within 30 days to arrange to pay the debt or to explain special circumstances, such as bankruptcy. Social Security can only answer general questions about the reduction of benefits.
There will be no deductions from—
The Financial Management Service, Department of the Treasury will reduce benefits in February 2002 and continue until the beneficiary pays the debt owed. Each month, when the money is deducted, the Financial Management Service will send a letter stating—
- when the deduction occurred;
- the amount deducted; and
- how to contact IRS to discuss the delinquent federal tax debt.
The Congress passed The Taxpayer Relief Act of 1997 to collect overdue debts to the government. The law authorizes IRS to collect delinquent federal tax by deducting up to 15 percent of federal payments, including Social Security benefit payments.
|
www.socialsecurity.gov
