Hermosa Beach, CA asked in Tax Law for California

Q: Social Security and Pension garnishment

I am a single 65 year old. I have 6 figure liens by the IRS and State of California against me. I have no way to even attempt to settle these claims. They have been garnishing my $60,000 salary for 5 years now. I am getting ready to retire, and will be eligible for $2,000 a month in Social Security and $1,000 a month in pension. Those payments will be my only source of income. Will the IRS and or the State be garnishing those payments? if so, how much can they take each month? It only totals $36,000 per year. Thank you.

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4 Lawyer Answers
David S. Greenberg
David S. Greenberg
PREMIUM
Answered
  • Tax Law Lawyer
  • San Diego, CA
  • Licensed in California

A: The IRS can only levy 15% of your social security income.

The State of California cannot levy your social security income, but they will attempt to collect by levying your bank account. Legally, the social security funds in your bank account cannot be taken by the State of California, but it is a hassle to get the levy released.

Your best alternative is to arrange to receive your social security benefit by way of a debit card. The social security administration will credit the balance on the card each month. Please note that the 15% IRS levy will be operative as to the monthly balance assigned to the card each month.

It is rather easy to arrange, and I would recommend that you contact the social security administration accordingly.

David S. Greenberg
David S. Greenberg
PREMIUM
Answered
  • Tax Law Lawyer
  • San Diego, CA
  • Licensed in California

A: It is also important to note that with your limited income, you may be eligible for the status of "Currently not Collectible" if your income is equal to your total monthly living expenses. In such a case, neither the state nor the IRS would be able to levy your social security income.

If you have any questions on this approach, just contact my office.

Frank Huerta Jr
Frank Huerta Jr
Answered
  • Tax Law Lawyer
  • Fresno, CA
  • Licensed in California

A: In addition to the answers already provided, you may want to consider an offer in compromise. Your income will be fixed and the likelihood of collection is somewhat limited.

Linda Simmons Campbell
Linda Simmons Campbell
Answered
  • Tax Law Lawyer
  • Burlington, CT

A: Through the automated levy program the IRS can take 15% of your social security. If your case goes to a revenue officer they can set up a levy that may take up to 100% of your social security. Your pension may also be subject to levy. At this point, since your income will be limited, you should start looking into collection alternatives such as an Offer in Compromise, Currently Not Collectible status, or a Partial Payment Installment Agreement.

Most of us offer a free consultation and can assist you with determining the best course of action going forward.

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