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Ask Robin D. Your Own Question

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7269
Experience:  15years with H & R Block. Divisional leader, Instructor
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I owe back taxes of about $5,000.00, i am disabled and on social

Resolved Question:

I owe back taxes of about $5,000.00, i am disabled and on social security disability...Can IRS garnish my Disability checks and at what percent?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,

Robin D :

All taxpayers with outstanding tax debts are subject to a levy on assets and income sources, including Social Security benefits. There are two ways the IRS may levy upon your Social Security benefits – via the automated Federal


Payment Levy Program (FPLP) or by a manual (non-FPLP) levy. Under the FPLP, the IRS is able to levy up to 15 percent of your Social Security benefits each month; there is no similar restriction on how much the IRS can receive


from manual levies. There is an exemption amount, however, for reasonable living expenses.

Robin D :

If you would like the federal booklet on this here is a link
http://www.irs.gov/pub/irs-pdf/p4418.pdf

Robin D :

Thank you in advance for a positive rating which lets Just Answer know your question was answered

Robin D :

Did you need more clarification on this?

Robin D :

If you have no other emans of income and this would present a finacial hardship you can request to be placed on Currently Not Collectible status.

Robin D :

The debt does not go away and the interest continues but your benefits would not be levied.

Robin D :

The system advises that you are In CHAT can you respond and let me know.

Customer:

What would be the reasonable living expenses?

Robin D :

The IRS looks at all your expenses (not vacations and any frivolous items) home, food, utilities, car payments.

Robin D :

If your expenses are right at what you are receiving then they can reduce the % for levy.

Robin D :

Each case is different

Robin D :

There are national standards though that they look to.

Robin D :

National Standards have been established for five necessary expenses: food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous.

Customer:

Do I call IRS and do they send me a form to fillout, How ids this done?

Robin D :

You would want to call the number on the last statement you received. The general number(NNN) NNN-NNNN can be used but you would need to get transferred to an agent and if you call the number on your last statement you would get faster service.

Robin D :

You would want to simply state your position and why you were not able to continue with your payments.

Customer:

Do I tell them i am requesting a hardship consideration?

Robin D :

Yes, that would be a good word to start with. Financial hardship would let them know the direction os the conversation

Customer:

My only asset is a car that is 2001 Rav 4. it is in poor condition and the tires are very bad, i only use it for Dr. Visits and Groceries. Will I be expected to sell it and give them the proceeds/

Robin D :

NO that is not a general procedure. If the iRS asks about your assets (car) it would only be to see the valuation for calculating your situation

Robin D :

You will want to look over all the following befor you call


Among the areas where the IRS can provide assistance:




  • Postponement of Collection Actions: IRS employees will have greater authority to suspend collection actions in certain hardship cases where taxpayers are unable to pay. This includes instances when the taxpayer has recently lost a job, is relying solely on Social Security or welfare income or is facing devastating illness or significant medical bills. If an individual has recently encountered this type of financial problem, IRS assistors may be able to suspend collection without documentation to minimize burden on the taxpayer.



  • Added Flexibility for Missed Payments: The IRS is allowing more flexibility for previously compliant individuals in existing Installment Agreements who have difficulty making payments because of a job loss or other financial hardship. The IRS may allow a skipped payment or a reduced monthly payment amount without automatically suspending the Installment Agreement. Taxpayers in a difficult financial situation should contact the IRS.



  • Additional Review for Offers in Compromise on Home Values: An Offer in Compromise (OIC), an agreement between a taxpayer and the IRS that settles the taxpayer’s tax debt for less than the full amount owed, may be a viable option for taxpayers experiencing economic difficulties. However, the equity taxpayers have in real property can be a barrier to an OIC being accepted. With the uncertainty in the housing market, the IRS recognizes that the real-estate valuations used to assess ability to pay may not be accurate. So in instances where the accuracy of local real-estate valuations is in question or other unusual hardships exist, the IRS is creating a new second review of the information to determine if accepting an offer is appropriate.



  • Prevention of Offer in Compromise Defaults: Taxpayers who are unable to meet the periodic payment terms of an accepted OIC will be able to contact the IRS office handling the offer for available options to help them avoid default.



  • Expedited Levy Releases: The IRS will speed the delivery of levy releases by easing requirements on taxpayers who request expedited levy releases for hardship reasons. Taxpayers seeking expedited releases for levies to an employer or bank should contact the IRS number shown on the notice of levy to discuss available options. When calling, taxpayers requesting a levy release due to hardship should be prepared to provide the IRS with the fax number of the bank or employer processing the levy.


Robin D :

This way you will know the offers that the IRS can give you and understand under which you may best be served.

Customer:

Thank you for your information

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7269
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 3 other Tax Specialists are ready to help you

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