[Lear]

The IRS is currently deducting 15% of my Social Security Disability payments each month.
This is for taxes not paid on early withdrawl on 401K funds in a previous year. I am living on this check and is my sole source of income. My wife recently began receiving here benefits upon reaching the age of 62. Please advise what course of action I can take to have this financial burden deminished. Thank you.

[excon]

Hello Lear:

What they're doing is NOT illegal. However, call 'em up and start talking. They're nothing more than a glorified collection agency.

excon

[K_2]

Does the Social Security Act 207 not prohibit this?

[JudyKayTee]

From the Connecticut School of Law: "The IRS applies the Federal Payment Levy Program after attempts to resolve delinquent tax accounts have failed. Although various types of Social Security payments are subject to this 15 percent levy, special payments will not be included under this program:

l Payments to children will not be reduced.

l Lump sum death payments will not be reduced.

l Payments with partial withholding to repay Social Security overpayments will not be reduced.

l Prouty benefits will not be reduced.

l 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.

Before levies are placed, delinquent taxpayers receive a final notice with details about their tax bill, an explanation of their appeal rights, and a telephone number for inquiries and assistance. The IRS will not issue a levy if payment arrangements are made within 30 days after a final notice is sent.

If there is no response, the IRS transmits the levy electronically to the Financial Management Service, a bureau of the Treasury Department. From that point until the debt is paid or other satisfactory arrangements are made, FMS reduces the taxpayer's Social Security payments subject to the levy by 15 percent and sends it to the IRS. The balance of the payment is sent to the taxpayer."

Yes, apparently IRS can do this!