Can the IRS Prevent You From Getting Social Security Retirement?

If you've worked enough to earn Social Security retirement, you can begin drawing benefits as early as age 62. The IRS may impose income taxes on part of your benefits, depending on how much you earn from other sources. The tax folks have no authority to deny a Social Security claim, whether for retirement or disability. But if you owe back taxes, these two federal agencies work together.

Back Taxes

If you owe back taxes to the IRS, the best course of action is to work out a repayment plan, known as an installment agreement. As long as you keep up the monthly payments you agree to, the IRS won't take any action. If you fall behind on the payments, or if you don't keep up with current taxes, the agency can cancel the agreement. In most cases, the IRS will reinstate the agreement if it decides you're acting in good faith.

Collection Actions

If you don't work it out with the IRS, you will find yourself subject to a variety of collection actions. The agency can levy your bank account without a court order, place a lien on your property, or garnish your wages. Your Social Security retirement check is also fair game, not only for back taxes but for any federally guaranteed debt such as student loans, as well as for child support arrearages.

Levying Social Security

The Federal Payment Levy Program allows the IRS to levy 15 percent of your retirement benefit from Social Security. There is no restriction on this percentage; it doesn't matter how much or how little you're left with. The only exceptions are the lump-sum death benefit owed to your survivors, and Social Security benefits paid to children (family benefits) on your work record. With a manual levy, the IRS can take as much as it likes, offsetting the amount only by necessary living expenses that you can't pay from other income sources.

Alternatives

The IRS cannot suspend or cancel your Social Security retirement eligibility, and Social Security won't adjust the amount of your benefit because of a tax debt. In addition, you can contest a levy by making an offer in compromise, with which taxpayers can settle a past tax debt for less than the full amount. You can also claim hardship, and you can attempt to prove to the IRS that full repayment would place an undue financial burden on you and your family. Finally, you can ask that IRS make a finding of "not collectible," which in effect would cancel the debt based on your dire financial outlook.

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About the Author

Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.

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