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Joseph, Lawyer
Category: Legal
Satisfied Customers: 5299
Experience:  Attorney with significant and substantial experience in multiple areas of law.
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I was just approved for SSDI and will be receiving back pay

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I was just approved for SSDI and will be receiving back pay and retroactive pay. My husband owes back taxes (we filed jointly) and I called the IRS a few months ago and due to our financial situation they deemed us uncollectable. I was wondering if they can take my back pay to apply to the back taxes if we are classified as uncollectable?

My name isXXXXX am a licensed attorney, and my goal is to provide you with excellent service today.

Yes, unfortunately, the IRS can levy up to 15 percent of Social Security Disability Insurance payments to satisfy a tax debt, including back pay.

Your debt was classified by the IRS as uncollectable due to your financial situation, but if that financial situation changes (i.e. you start receiving a form of income, such as SSDI payments) the IRS can change that classification.

The IRS and other debtors will self-classify debts as uncollectable, when they realize that collection efforts would be highly unlikely to result in them receiving the amount owed. But this isn't a legally binding term, so the IRS isn't bound to not engage in any future collection efforts after stating a debt is uncollectable.

This site from Iowa Legal Aid provides some good additional information:

I hope the above information is helpful, although I realize it is not what you wanted to hear. I sincerely XXXXX XXXXX had better news to give you, but I hope you appreciate an honest and direct answer to your question. It would be unprofessional and unethical of me and unfair to you to provide you with anything less.

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Thanks and best of luck!
Customer: replied 3 years ago.

So they will only take 15% of my back pay or will take the whole amount since the tax debt is more than my back pay?

Hello Kellie,

Yes. They would only take 15% of the back pay, if they do decide to levy it. Then they would take 15% of future SSDI payments till the tax debt is satisfied.
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