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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
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Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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I am a 67 year old 100% disabled Viet-Nam veteran who receives

Customer Question

I am a 67 year old 100% disabled Viet-Nam veteran who receives compensation from the VA. I have lost the use of both of my feet, severe bladder issues, and the loos of use of one lung. I would like to know if the IRS can levy my compensation payments for Federal Taxes. I understand they can attach up to 15% of my Social Security payments. I have been told that the IRS exempts from levy service-connected compensation payments to veterans and their dependents. Veterans in this class do not file a 1041 for any funds payable by the VA. Tax Exempt.
Submitted: 5 years ago.
Category: Tax
Expert:  Ed Johnson replied 5 years ago.

Dear XXXXX,

 

Thank you for your Question.

 

Generally your Veterans Disabilty benefits are not garnishable by the IRS or anyone else unless, you have waived a portion of your retirement compensation in exchange for Veterans Disabilty payments.

 

In some cases, the VA and military services allow a person to waive a portion or all of thier retirment benefits in order to receive a larger disabilty income from the VA. If that occured, then the poriton that is equal to the waived amount can be garnished.

 

The portion of the VA disability that exceeds the waived amount is not garnishable.

 

If you did not waive anything, the you are in luck, because then none of the VA disabiltiy would be garnishable.

 

References:

 

What is Garnishable: http://edocket.access.gpo.gov/cfr_2006/janqtr/pdf/5cfr581.103.pdf

 

(7) Any payment by the Secretary of Veterans Affairs as compensation for a

service-connected disability paid by the Secretary to a former member of the Armed Forces who is in receipt of retired or retainer pay if the former member has waived either the entire amount or a portion of the retired or retainer pay in order to receive such compensation. In such cases, only that part of the Department of Veterans Affairs

payment that is in lieu of the waived retired pay or waived retainer pay is subject to garnishment ( 5 CFR Ch. I (1-1-06 Edition), Section 581. 103 -104)

 

 

ALSO Moneys that are not garnishable, seciton 581.104 of the same CFR.

http://edocket.access.gpo.gov/cfr_2006/janqtr/pdf/5cfr581.104.pdf

 

Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
Ed Johnson and 3 other Tax Specialists are ready to help you
Expert:  Ed Johnson replied 5 years ago.

Dear XXXXX,

 

Thank you for your comments and feedback.

 

Thank you for serving,

 

Best Regards

 

Ed Johnson

First Sergeant, (RET), U.S. Army

Vietnam and Desert Storm

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