May 21, 2008

Q & A: SSI Settlement Subject to Collections?

QUESTION: My husband owes the IRS $7000.00. He has a social security settlement pending. Can the IRS withhold from his SSI settlement?

ANSWER: The IRS can place a levy on Social Security benefits for up to 15% of the benefit. This is normally done only after other collection action has been exhausted. If your husband has received Form L-1058, Final Notice of Intent To Levy, he must respond to this notice within about 45 days or face the risk of levy action that can include his SSI settlement.
Another option available to him that would avoid the risk of having a levy issued against his settlement is for him to contact the IRS at 1-800-829-7650 and request an Installment Agreement to full pay his tax liability over a 60 month period. Setting up this agreement would cease any further collection action.

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