Iowa

What to Do When the IRS Plans to Take Your Social Security or Other Benefit Check

Authored By: Iowa Legal Aid LSC Funded
Contents
What to Do When the IRS Plans to Take Your Social Security or Other Benefit Check

 

I owe money to the IRS for tax year 2000. I lost my job a few years back. I talked to the IRS back then and they put me in currently not collectible status (CNC) because I didn’t have any income. I just started getting my social security benefits. I got a notice from the IRS that they are going to be taking part of my check each month. I thought I was in CNC. What do I do? Can they really take my social security?
 
What is currently not collectible?
Currently not collectible status just means that the IRS won’t try to collect taxes at the current time. You have to show the IRS that you don’t have enough income to pay the IRS and meet your basic necessities. You can ask for CNC by filling out a Form 433-F. This form asks you to list all your income, assets and expenses. You can use National Standards for personal/ food expenses and medical expenses without having to prove your actual expenses. You will be limited to claiming the national standards on all expenses unless you prove that you have a special circumstance that makes your expenses higher. The National Standards are listed on the IRS.gov website.
 
How does currently not collectible status effect how much I owe?
The interest and penalties on your account continue to increase.
 
Can the IRS change my status?
The IRS will take a look at your status every two years or so. The IRS will also look at your case if it finds out that you have had a change in income.
 
Can they really take my social security?
The IRS can take your social security retirement or social security disability benefits. As a general rule the IRS will limit what they take to 15%. The IRS should not take Supplemental Security Income (SSI) benefits. These benefits are considered public benefits and are usually assumed to be only enough to provide for basic necessities.
 
The IRS is supposed to prevent certain very low-income social security retirement and disability recipients from being placed in the federal levy program in the first place. This screening program is not full proof so taxpayers still may have to submit a 433-F to be put into currently not collectible status. 
 
What if I don’t think I owe the IRS the money?
If you have never gotten a notice of levy before, you could request a Collection Due Process hearing (CDP). A CDP hearing will allow you to present evidence that the IRS shouldn’t levy on your benefits. You can also challenge the tax debt if you haven’t had a chance to challenge it before. You might not have been able to challenge it if the IRS did not issue the right notice or mailed the notice to the wrong place.
 
If you got the notice but just didn’t respond, you can’t challenge the tax debt in a CDP hearing. You might be able to ask for an audit reconsideration. In an audit reconsideration, you tell the IRS why you think their decision was wrong and provide them with any evidence you think should help them change their mind.
 
this information is not a substitute for legal adviceShould I always ask for a CDP if it is my first notice?
This depends. A CDP hearing will stop the statute of limitations from running on your tax debt until the case has been heard and decided. This can give the IRS more time to collect the debt. You should consider whether you are close to the end of the collection statute. As a general rule, the IRS has ten years from the assessment of the tax debt to collect on it. If you can get the IRS to agree to put you into to CNC status before the deadline, you might not need to file.
 
Where can I get help if I need it?
Maintaining household income is a basic need and one of the priorities for legal help Iowa Legal Aid provides. Low-income Iowans who have a tax controversy with the IRS should contact Iowa Legal Aid to apply for assistance. Call 1-800-532-1275 (se habla español). Persons 60 and older may call Iowa Legal Aid’s Legal Hotline for Older Iowans at 1-800-992-8161.
 
Last review: 8/8/12