For those of you who are not interested in the details, we’ll get straight the to the point: the IRS believes that they can, and they regularly do, garnish up to 15% of your social security benefits.
So, the IRS can garnish up to 15% of the amount that you receive from your Social Security check. No more, no less.
If you are interested in the long answer, though, then keep reading because this is an area of IRS administration that has boggled our minds for many years.
The issue is that there are two areas of Federal law that directly conflict. Federal law is codified within the United States Code (“USC”), and each section of the USC deals with a different area of interest.
USC Title 26 is the “Internal Revenue Code”, the notoriously difficult-to-understand tax code of the United States.
USC Title 42 is “The Public Health and Welfare”, and within it lies the Federal law that established the Social Security system.
Here’s the problem: Title 42 and Title 26 directly conflict with one-another regarding whether you Social Security check can be garnished. Take a look:
The Social Security section of the US Code says that nobody can garnish your Social Security Payments. Here’s the direct quote from 42 USC § 407:
“…none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy of insolvency law.”
That seems pretty straight-forward, doesn’t it? And it’s an incredibly powerful statement. No creditor can garnish your social security wages, and the bankruptcy courts can’t touch it either.
That’s a strong protection: there are very few forms of income or assets that are protected from both creditors and the bankruptcy courts. Obviously, the lawmakers intended to place Social Security payments in a special category of protection.
But, the IRS thinks that they are above all other creditors, and that they can garnish your Social Security check. Here’s what the Internal Revenue Code says, in 26 USC § 6331(h):
“[a] levy shall attach up to 15 percent of any specified payment due to the taxpayer” and it defines a specified payment to include “any amount payable to an individual as a recipient of public assistance under…the Social Security Act.”
So, the section of Federal law regarding Social Security says that no creditor may garnish your Social Security check and that bankruptcy courts cannot touch it.
But then another section of Federal law, the Internal Revenue Code, says that the the IRS can garnish up to 15% of any public assistance money that you receive (this includes Social Security, Unemployment, and Disability, by the way.)
Which one is it?
In practice, going back to our short answer, the IRS will garnish 15% of your Social Security check.
The long answer, though, is that the law contradicts itself and somebody needs to challenge this in the courts to resolve the conflicting information.
Who will take up that fight?
We hope that someone does, because there is nothing more unjust than the IRS garnishing the tiny Social Security checks of a retiree, many of whom are living off of incomes that are barely enough to survive as it is. But, as of now, nobody has attempted to resolve this conflict. So, the IRS will continue to garnish your Social Security check.
Up to 15%.
There is good news, however: we can usually find tax relief for people who are relying upon their Social Security check to make ends meet. If you are a retiree and your Social Security is being garnished by the IRS, we can usually get that garnishment release by either negotiating for your account to be placed in a hardship status or by negotiating an Offer in Compromise (or both).
So, if your Social Security check is being garnished give us a call at (866) 573-3755 for a free no-pressure consultation. We’ll let you know what your options are and get your garnishment released for you.