If you cannot pay your delinquent taxes because of an economic hardship, the IRS can suspend collection efforts against you. This does not mean your debt is forgiven; just that the IRS will defer collection and not take your wages or bank account. Internal Revenue Service Policy Statement 5-71 permits hardship status on IRS accounts, as follows: If there are limited assets or income but it is determined that levy action would create a hardship, the liability may be reported as currently not collectible. A hardship exists if the levy action prevents the taxpayer from meeting necessary ... Read More
IRS levies on Social Security benefits – enforced collection on those who can least afford it
I have seen an increase in calls to my office from retirees who have received an IRS levy on their Social Security benefits. In most every case, the levy (1) relates to conduct from self-employment when they were younger, and that conduct has long ago ended and (2) creates a substantial hardship for the retiree, who needs the levied money for to pay for prescriptions, food, utilities and rent. The IRS is authorized to levy on Social Security benefits under section 6331(h) of the Internal Revenue Code. These levies are continuous and take 15% of Social Security benefit, a real hardship to ... Read More