What To Do IRS Takes Your Social Security Check

What To Do When the IRS Takes Your Social Security Check

There is an IRS program known as the FPLP Levy Program.
That stands for Federal Payments Levy Program. That means that the IRS will go to other federal government agencies and take money that you are owed from them directly. They usually take your Social Security usually 15%.

When a taxpayer receives a Form CP 297C, this means that the IRS intends to levy on the taxpayer’s assets, typically where that taxpayer is a federal contractor subject to a Federal Contractor (FEDCON) Federal Payment Levy Program (FPLP). While taxpayer’s may understand a levy enough to know that it’s not a good thing, a deeper understanding of the FPLP system and how it works may prove beneficial for the taxpayer facing such a situation.

The FPLP is a tool for the systematic collection of delinquent taxes. Using this enforcement tool, the Internal Revenue Service (IRS) levies against federal payments made to the taxpayer, which are disbursed by the Treasury’s Financial Management Service (FMS). Such disbursements include social security, veteran’s benefits, tax refunds and many other federal payments. In other words, under this program the IRS will levy against payments going from the federal government to taxpayers that have not met their federal tax obligations and have failed to make alternative arrangements with the IRS to meet those obligations. Internal Revenue Service, CP-90/CP-297 Frequently Asked Questions (FAQ’s), available at http://www.irs.gov/Individuals/CP-90-CP-297-Frequently-Asked-Questions-(FAQs).

In the case of federal contractors, federal payments will include more than simply social security or similar fringe benefits, but may include payments for contract work and the like. Thus, a FEDCON FPLP will occur where a federal contractor fails to meet its tax obligations, in which case a Notice of Federal Tax Lien will be sent to the taxpayer. However, in this case the IRS does not entitle the taxpayer to a post-deprivation hearing. While typically where the taxpayer files a request for a Collection Due Process (CDP) hearing within 30 days of the date of the CDP’s mailing by the IRS, the IRS may not file a levy until the taxpayer has had a hearing in which the levy can be contested. However, where the taxpayer receives a Form CP 297C, which are also known as post-levy CDP notices. In such cases, the taxpayer must have the levy reversed at the CDP hearing rather than prevent the levy from being instituted.

Upon receipt of a Form CP 297C, the taxpayer should immediately contact the IRS to discuss the options available. Consultation with a Richard Schickel, Enrolled Agent at 520-448-3531  is also advisable, given that the federal tax lien has already been instituted, and the tax debtor’s financial situation has already been put at risk.

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