Tax Help For Seniors 5


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Easiest Way To Release An IRS Levy On Social Security Benefits

The IRS will not take this measure unless you owe a significant amount. If they do attach a levy to your Social Security benefits, they may confiscate 15%. This applies to both senior and disabled benefits. See our guide to IRS letters for an overview of the collection process.

The letter you would get to notify you of an Intent to Levy is the CP504.

The letter notifying you of Intent to Levy on Social Security Benefits is the CP91.

Easiest Way To Release An IRS Levy On Social Security Benefits

Form 433F: Here at the IRS website.

If you are on Social Security benefits as your main income, you can file Currently Not-Collectible Status. The IRS will send you a notice of the levy, with a number to call on the letter. Call that number and ask the agent to be put into Not Collectible Status. The IRS agent will help you fill out form 433F.

See the Taxpayer Advocate Guide on “The Federal Levy Payment Program as it applies to your Social Security benefits.”

Need More Tax Help?

There are many seniors out there that need tax help and may owe back due taxes from their previous employment or businesses even though they are now retired. Many seniors are on a fixed income and think that they are going to be stuck paying all their back due to tax debt, but fixed-income seniors do have options when it comes to their back due debt.

The IRS is usually in favor of settling debts for its older taxpayers as long as they can prove they do not have sufficient assets or income to pay off the debt.

These are the things the IRS is going to consider regarding your debt and whether or not it can be settled through an Offer In Compromise:

Did you spend funds on things other than necessary living expenses that could have been used to pay off the debt, while the debt was still active?

They call this a dissipated asset. Essentially – if you owed money to the IRS and received funds elsewhere and spent it on something that was not living expenses, the IRS will often treat those funds as if you still have it in their calculation, even though it is gone. This is to prevent people from avoiding paying the IRS and then asking for a settlement later when they had funds to pay towards the debt

Does the senior have a sufficient amount in their retirement account or paid off properties that could be sold to pay the debt?

If the person has more assets than the amount owed, the IRS will generally not accept a settlement for less than the full amount due. However, the IRS still might put the case into hardship status, resulting in you not making a monthly payment on the debt. Since the IRS only has 10 years to collect, we put clients into hardship status that would not qualify for an Offer In Compromise settlement, and it’s almost like a settlement since they end up not paying back the debt anyway. The debt eventually falls off the system and they are free and clear.

However, should you have sizable assets (ie: Your tax debt is $50,000 and you have a 401K value of $250,000) you may end up getting stuck paying it back, in which case we would try to remove penalties for you.

If you do not have sufficient assets to pay the debt, the IRS will then look at your income vs. your expenses to determine if you would be able to settle the debt.

Does the person’s monthly income exceed their monthly expenses?

If you are only receiving Social Security income then most of the time you will qualify for an Offer In Compromise. If you are receiving another retirement payment as well then it may be more difficult to qualify.

Now, what do I do?

If you are a senior who needs tax help you can see our guide on how to do your own offer in compromise. If you want one of our attorneys to handle it for you, submit a contact request at our tax resolution intake application or call us at (888) 515-4829.


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5 thoughts on “Tax Help For Seniors

  • rita

    Fantastic article guys, very clear and understandable. A question though how would you guys try to remove penalties for us. I might give you guys a call 🙂

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