What You 

Need To 

Know 

About The

Federal 

Payment 

Levy 

Program

A CONSUMER 

TAX ALERT 

BROUGHT 

TO YOU BY

What is the Federal Payment 

Levy Program?

T

he Federal Payment Levy Program levies

on federal payments made to taxpayers

who owe Federal taxes. Under the program,

the IRS may take up to 15 percent of Federal

payments made to you and apply them

against your Federal tax debt. Other levy

programs may withhold additional monies

from your payments. This levy continues

until the entire amount of your Federal tax

debt is repaid or other payment

arrangements are made. 

The types of payments that may be levied

include:

■ Social Security benefits,

■ Federal employee salaries or retirement

annuities, and

■ Federal and military vendor payments

and travel payments.

The types of Social Security payments that

may not be levied include:

■ Children’s benefits,

■ Supplemental Security Income

payments,

■ Lump Sum Death benefits,

■ Prouty benefits (special benefits for

people who were age 72 and over by

1971), and

■ Benefits undergoing partial withholding

to repay a debt to Social Security.
Will I be affected?

T

he Federal Payment Levy Program affects

taxpayers who have an outstanding tax

liability. If you currently owe Federal taxes

and you receive payments such as Social

Security, you may be affected.

All taxpayers with outstanding tax debts are

subject to the Federal Payment Levy

Program. If you are subject to the levy, you

will receive a notice from the IRS. You will

then have 30 days to respond. Once your

payments are levied, you will receive a notice

indicating the amount of the deduction. 

If you have an outstanding tax liability and

you believe you will be affected, you can take

steps now to prevent having your payments

levied.
What should I do?

T

he first step is to determine if you owe the

tax. Some possibilities for relief from your

Federal tax debt include:

■ Innocent Spouse Relief (see Publication

971, Innocent Spouse Relief), or

■ You may not have responded to an

earlier IRS notice and the IRS may have

assessed the liability based on certain

assumptions. You may be able to ask the

IRS to reconsider the assessment (see

Publication 3598, What You Should Know

About the Audit Reconsideration Process).

The next step is to determine if you are able

to pay all or part of the tax. If you are unable

to pay your liability in full, you may want to

consider one of the following alternatives:

■ Enter into a monthly installment

agreement, 

■ Enter into an Offer in Compromise, or

■ You may ask to be classified as currently

not collectible. Being currently not

collectible does not mean the debt goes

away. It means that the IRS has

determined you cannot afford to pay the

debt at this time. Penalties and interest

will continue to be added to the debt.

For more information on these alternatives,

refer to Publication 594, The IRS Collection

Process.
What if I am a guardian or 

conservator for a taxpayer?

I

f you are a guardian or conservator, you

will need a Power of Attorney before the

IRS can talk to you about tax problems and

make any payment arrangements. A Power

of Attorney can be obtained by completing

Form 2848, Power of Attorney and Declaration of

Representative. If the taxpayer is incapacitated,

you may still complete a Form 2848, however

you will need to attach the legal

documentation that allows you to act on the

taxpayer’s behalf. 

Further, the taxpayer may be entitled to an

equitable tolling of the statute of limitations

for any period of the taxpayer’s life during

which it was medically determined that

taxpayer was unable to handle their own

affairs and there was no one authorized to

act on the taxpayer’s behalf. 
Who should I contact for help?

I

f you have questions, concerns, or need

information about the Federal Payment

Levy Program, here are some numbers to

contact for help:

■ The IRS (1-800-829-7650),

■ The Taxpayer Advocate Service 

(1-877-777-4778), or

■ A Low Income Taxpayer Clinic. 

Please do not contact the Social Security

Administration regarding your federal tax

matter.

All publications are available at

www.irs.gov/formspubs, 

or by calling 800-829-3676.

LOW INCOME TAXPAYER CLINICS offer free 

or low-cost assistance to taxpayers who are

unable to afford paid representation. Clinics

represent taxpayers in matters before the

IRS. If you qualify for representation, a clinic

may be able to help you resolve your

outstanding tax liability. 

For a complete list of clinics and the

eligibility guidelines, please refer to

Publication 4134, Low Income Taxpayer

Clinic List.
Have a tax problem you cannot get resolved?

We can help!

The Taxpayer Advocate Service is an independent organization with the IRS that ensures tax problems which have not

been resolved through normal channels are promptly and

fairly handled. There is at least one Local Taxpayer Advocate

in each state, who is independent of the local IRS office. The

Taxpayer Advocate Service can help if you are facing:

■ An economic hardship or significant cost,

■ A more than 30-day delay to resolve the issue, or

■ An action, response, or resolution deadline that was

promised by the IRS but has not been met.

What you can expect from the 

Taxpayer Advocate Service

Qualified taxpayers will receive personalized service from one

of our knowledgeable Advocates. He or she will listen to your

situation, help you understand what needs to be done to

resolve it, and stay with you every step of the way until your

problem is resolved to the fullest extent permitted by law.

Because we are part of the IRS, our Advocates know the tax

system and how to navigate it. Because we are independent

within the IRS, our Advocates are impartial. They will work on

your case until it’s finalized – so you can move on with your

life. What’s more, if your problem affects other taxpayers, the

Taxpayer Advocate Service can work to change the system.

For more information,

refer to Publication

1546, The Taxpayer

Advocate Service. 

If you need assistance

from the Taxpayer

Advocate Service, you

may contact us at: 

1-877-777-4778

Publication 4418 (6-2005)

Catalog Number 39183C