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The Internal Revenue Service (IRS) has a garnishment system that it can activate when a taxpayer has tax debts. In the case of retirees and pensioners, they can also be affected by this measure with their benefits.
This is the Federal Payment Levy Program (FPLP) through which withholding is carried out on the amount deposited month after month, something that can affect those who depend on this income.
The Government seizes and suspends the benefits of all retirees and pensioners: How does the federal system work?
Before carrying out the garnishment, the IRS sends formal notices and gives several opportunities to regularize the taxpayer’s situation. It is when the person lets time pass and ignores the agency’s letters that this measure comes into play.
When this happens, the IRS can:
- Withhold up to 15% of each monthly Social Security payment
- Apply the deduction until the tax debt is fully paid off
- Keep the garnishment in effect continuously, month after month
What procedure does the IRS follow to carry out garnishments?
To carry out a garnishment, the IRS must first determine that a tax debt exists. To do so, it must calculate the tax owed and formally record it. Then, it sends the first notices, demanding payment.
When several days pass without the taxpayer responding to any of the letters, the IRS proceeds to send the Final Notice of Intent to Levy. From the moment this arrives, the person has 30 days to:
- Respond.
- Resolve the issue.
- Request a hearing.
After this time has passed, the IRS orders the seizure of property, which includes Social Security benefits, pensions, and retirement benefits.