The New Social Security Dilemma

Taxpayers should soon be receiving reminders that the IRS will begin offsetting outstanding tax liabilities against their social security benefits. It's estimated that approximately 200,000 social security beneficiaries could be affected. Under the Federal Payment Levy Program, social security benefits may be reduced by up to 15% after the taxpayer has been notified of an intent to levy and received an explanation of appeals rights and procedures. Social Security payments to minors; lump sum death benefit payments; supplemental security income payments; payments to taxpayers in bankruptcy, and payments to taxpayers seeking innocent or injured spouse relief are exempted from the Federal Payment Levy Program.

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