The Federal Payment Levy Program moves into its next phase. Payments for social security benefits starting next year will be reduced by 15 percent for taxpayers with delinquent accounts. Starting in October, notices for federal taxes owed by nearly 300,000 taxpayers out of 45 million Americans receiving social security benefits would be sent out to them. Those that were affected by disasters but don’t reside in the disaster areas should call “1-866-562-5227, a special toll-free number the IRS set up to assist those affected by the Sept. 11 terrorist attacks.” Anyone residing within the federally declared disaster area will have the notice suspended.
According to the IRS, “To prevent having their benefits reduced, seniors or other Social Security recipients with overdue tax debts should contact the IRS at 1-800-829-7650. Those who have already arranged to pay their tax debts through installment agreements or other IRS programs won’t be affected by this program and do not need to contact the IRS.”
The IRS does not use the program until all other venues to resolve delinquent accounts have failed (those who feel they may suffer a significant hardship because of this program can contact the Taxpayer Advocate Service at 1-877-777-4778).
The program does not affect certain types of social security benefits:
• Payments to children will not be reduced.
• Lump sum death payments will not be reduced.
• Payments with partial withholding to repay Social Security overpayments will not be reduced.
• Prouty benefits will not be reduced.
• Supplemental Security Income payments will not be reduced.
• Payments to those in bankruptcy, suffering hardship situations or those who have applied for relief as an innocent or injured spouse will not be levied.
According to the IRS, “The General Accounting Office estimates this phase of the FPLP could recover about $311.8 million annually in unpaid tax bills from those who receive Social Security payments.” Let’s just hope this money goes toward more tax relief for Americans.