Federal Payment Levy
In July 2000, the IRS,
in conjunction with the Department of the Treasury, Financial
Management Service (FMS), started the Federal Payment Levy
Program (FPLP) which is authorized by Internal Revenue Code Section
6331 (h), as prescribed by the Taxpayer Relief Act of 1997 Section
1024. Through this program, we can collect your overdue taxes
through a continuous levy
on certain federal payments disbursed by FMS. The following is a
list of federal payments that can be levied through the FPLP:
employee retirement annuities,
- federal payments
made to you as a contractor/vendor doing business with the
government (including Defense contracts),
- federal employee
travel advances or reimbursements,
Security benefits paid to you,
- some federal
- Medicare provider
and supplier payments.
Retirement Board benefits paid to you.
In the future, the program will expand to include additional
federal employee salaries and other types of federal payments.
Federal payments to a delinquent taxpayer will not be included in
the program in certain circumstances. These circumstances include,
when you are in bankruptcy, have applied for relief as an innocent
or injured spouse, made alternative arrangements to pay, or the IRS
has determined you are in a hardship situation.
As part of this program, a file of
delinquent accounts is transmitted to FMS to be matched against
pending federal payments you are due. When a match is found, we send
you a Final
Notice - Notice of Intent to Levy
and Notice of Your Right to a Hearing, CP 90 or CP 297, if
another Final Notice has not already been issued. See Tax
Information for Appeals for additional information about your
right to a hearing.
If we don't hear from you within 30 days
from the date of the Final Notice, we will transmit the levy
electronically to FMS. This applies to all federal payments that can
be levied except for certain Social
Security benefits. See Topic
201, The Collection Process, Publication
594, The IRS
Collection Process, and Publication
1, Your Rights as a Taxpayer , for additional information.
may be transmitted to FMS without issuing a Final Notice if you
previously requested a Collection Due Process (CDP) hearing on
employment taxes. The Small Business and Work Opportunity Tax Act of
2007 amended I.R.C. Section 6330(f) and permits such a levy.
If you requested a CDP hearing on previous employment taxes NO MORE
THAN 2 years prior to the employment taxes being levied, we will
send you a Notice
of Levy and
Notice of Your Right to a Hearing, CP 297A.
A levy may
be transmitted to FMS without issuing a Final Notice if you or your
predecessor is a Federal contractor.The Small Business Jobs Act of
2010 amended IRC Section 6330(f) and permits the IRS
to issue such a levy.
We will send you a post levy
notice, Notice of Levy
and Notice of Your Right to a Hearing, CP 90C or CP 297C.
From that point on, FMS may reduce any federal payments subject
to the levy
by 15 percent, or the exact amount of tax owed if it is less than 15
percent of the payment. Some contract/vendor payments,
however, will be reduced by 100 percent, or the exact amount of tax
owed. The levy
is continuous until your overdue taxes are paid in full, or other
arrangements are made to satisfy the debt. Each time your federal
payment is levied, FMS will send you a letter of explanation,
including information on which federal payment was levied, and
advise you to contact us for resolution.
Contact us toll-free at 1-800-829-7650
or 1-800-829-3903 to resolve the issue by paying the tax bill,
entering into an installment agreement, or proposing an Offer in
Compromise. Please do not contact the FMS, OPM, SSA, or any other
federal agency. See Topic
202, What to Do if You Can't Pay Your Tax, and Topic
204, Offers In Compromise, for additional information.
Above Per IRS - Page Last Reviewed or Updated: 05-Feb-2013