Does a tax lien on a deceased husband pass on to the wife if she tries to collect his social security even if the tax lien against her has been relieved?
Estate Planning Attorney
The short answer is the IRS can do whatever they can get away with. The text book anserw is yes, up to 15%.
Although IRC Section 6334 appears to exempt public assistance benefits, unemployment benefits and worker’s compensation benefits, Section 6331(h) allows for a levy of up to 15% on them. The IRS can levy up to 15% of any Federal payment provided that eligibility is not based on income or assets.
Internal Revenue Manual 18.104.22.168.1 states that the IRS will not levy unemployment benefits, workman’s compensation and public assistance payments, even though they can.
Social security payments for retirement, survivor or disability insurance are based on social security taxes paid, not income or assets, and are commonly levied by the IRS at the 15% continuous rate. The IRS considers supplemental social security to be need based and by policy will not issue a levy on those payments.
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