The IRS can levy social security benefits. Even worse, that levy can continue even though the statute of limitations has expired. The question is how often does the IRS levy social security payments? And what can you do if it does?
The IRS annual statistics report does not drill down anywhere close to the level needed to answer the first question. But it does seem to be exceedingly rare and only applied to tax protestors. This is in alignment with IRM 5.11.6.2(1) “Use discretion in determining if retirement income should be levied“. And more specifically, IRM 5.11.6.2.1(4) “Use discretion in determining whether a levy on Social Security benefits is appropriate under the circumstances.”
However rare, what can you do about it? If the levy was correctly applied before the statute of limitations runs, then the levy will continue after the expiration. The authority for this is Treas. Reg. § 301.6343-1(b)(1)(B)(ii) which provides that “a levy reaches all property rights at the time the levy is made, including the right to receive payments at some point in the future, and will not be released under this condition unless the liability is satisfied.” This regulation leaves you with only one option, you must make a deal. Specifically, an Offer-In-Compromise proving that the seizure of your retirement income places you in the category of “Economic Hardship”.
Economic hardship cases are usually hard to get through at the collections level. Expect a trip to Appeals.
