Removing Tax Liens and Levies

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  1. Removing IRS Liens and Levies
    1. Removing Liens and Levies
      1. Removing IRS Liens and Levies [click here!]
      2. Your Employer Can Refuse a Tax Levy
    2. Removing Levy on Social Security
      1. Levy of Federal Payments
      2. DOJ Explains Levy on SS Checks
      3. Removing Social Security Levies
      4. Social Security Hardship Letter
      5. Letters for Removing TOP Levies
      6. Excessive TOP Letter
      7. Another Letter on excessive TOP
      8. Can my Social Security be levied?
      9. Tax Liens and Social Security
    3. Liens
      1. Peymon's Article on Witdrawing Liens
      2. A Memo on Self-released Liens
      3. Regulation on Re-Filing a Tax Lien 301.6323
      4. 26 U.S.C. Subtitle F, Chapter 64, Subchapter C: Liens for Taxes
      5. Internal Revenue Manual: Federal Tax Liens Handbook
      6. Expansion of IRS Liens in Drye and Craft Cases
    4. Levies
      1. Removing Wage Levy (Skipped CDPH)
      2. 26 U.S.C. §6330: Notice and Opportunity for Hearing Prior to Levy
      3. 26 U.S.C. Subtitle F, Chapter 64, Subchapter D, Part II: Levy
      4. Internal Revenue Manual: Notice of Levy
      5. Collection Enforcement by Levy Action
    5. Alter-Ego Nominee Liens
      1. Release of Lien Letter: Alter-Ego
      2. Request for discharge of lien and CDPH
    6. Court Cases on Liens
      1. Griswald Case on Release of Lien
  2. Articles and Information
    1. Assistance on Complex Tax Issues by IRS
  3. Seizure
    1. Seizure of Property for Collection of Taxes:
      1. 26 U.S.C. Subtitle F, Chapter 64, Subchapter D
    2. Forfeiture/Seizure:
      1. USAM § 9-111.000
    3. Judicial Approval Required for Seizure of Principal Residence
    4. What Can the IRS Seize?

REMOVING LIENS AND LEVIES Clarkson's Famous Report

DISCLAIMER: This is a news article for informational purposes only. Our recommendation is that everyone pay the taxes they owe.

So, the stinking, rotten IRS has placed a tax lien on your real estate, or a levy on your paycheck. What can you do? Well, you have options. You can do one of several things. You need to read and study, then pick the best route for you. Order the materials you need from the book list. The tax collectors have many tricks, but they can be beaten with knowledge and determination.

1. What is a tax lien? A tax lien is a lien like a mortgage lien or a mechanic's lien, which is an encumbrance against real property that runs with the land, i.e. whoever purchases the land also takes the indebtedness. A lien is a claim or hold upon the real property of another as security for a debt that can he satisfied by the property or the sale of it. A lien attaches to all real estate of the debtor (even property acquired after the date filed) in the county where the lien was filed.

A lien holder can foreclose on the property, i.e. put it up for auction and sale on the courthouse steps.

2. What is a federal tax lien? It is a lien against your real estate located in the county in whose courthouse the lien is filed. Regardless of the title or wording of the name of the IRS form used, once it is filed by the clerk of court, it is binding or notice to the world, for six to ten years. Tax liens only apply to real property. If you have none in the county where filed, the lien has no effect unless you buy or inherit some real property in that county. The lien does not cross county lines.

Do not have false hopes due to the misleading words on the federal tax lien form. Once it is received by the clerk of court, it is accepted by the legal community. Also, a federal lien supersedes state law, so you have no protection, homestead or otherwise.

3. When a lien is filed against your house, nobody comes out there and places a large piece of paper across the roof of your home, hut rather a notice is recorded at the courthouse which warns all future buyers and lenders that a lien holder has a prior claim against the real estate owned by you in that county. Normally, prospective buyers of the property will not buy the property unless you pay off the lien and have it removed. Or, the buyer would pay you less than the full price and use the money due you to pay the lien holder. Lenders will not lend money on real estate when notified of a prior lien unless arrangements are made in advance to satisfy the prior encumbrances.

4. Liens and mortgages have a priority system whereby whichever one is filed first has the first claim against the real property and whoever is recorded second can only collect what is left over. Real estate law is explained well in Clarkson's Tax Collector's Manual

However, the buyer or lender does not have to satisfy the lien. A family member could accept the house with all the liens on it. Deeds can still he drawn and filed as property can be sold or transferred with lien on record. Some purchasers will buy land with lien on record.

However, the lien just sits there at the courthouse until it expires unless the tax thieves attempt to foreclose, i.e. sell your property at auction. However, if someone wishes to purchase your home, they could mandate satisfaction of the lien prior to purchase. Yet, if no auction or purchase takes place after six to ten years, the tax lien expires by the statute of limitations unless the tax collector renews the lien. However, such liens are rarely renewed. In 1990, the law was changed to allow the IRS ten years to renew a tax lien. Other liens such as mortgages, mechanic's liens etc. expire at varying times. The statue of limitations can be tolled or extended by several of your actions. However, this extension is not recorded in the deed room and is generally ineffective.

5. The usual procedure of the Instant Robbery Squad is to allow small liens to expire by the statute of limitations and to foreclose on the large ones. However, under the new IRS procedures, the tax thieves are ignoring almost everybody and almost all liens. Therefore, the best course of action today is to do nothing, unless the local IRS agent acts serious. If you receive a Notice of Seizure, Foreclosure or Auction, call Dr. Clarkson immediately.

6. Under the CDPH laws IRC §6320 and §6330, the Instant Robbery Squad cannot foreclose on a lien or use enforcement methods while the CDPH is pending. Therefore, always request your CDPH. You must do this timely and you must follow procedures.

7. Removing a lien from the greedy hospitals. You can do several things, depending on the circumstances:

A. Fight Back! Do not allow a lien in first place. You can stop a lien and beat an audit. See Clarkson video Audit Procedure 1: How to Handle the IRS (video $30, audio $10).

People who file and do not pay are vulnerable to collection activity. We do not recommend this. If you file and do not pay, protect yourself.

B. Do nothing and allow the statute of limitations to run. This is the best course, especially for small liens, but this depends on circumstances. Call Dr. Clarkson.

C. Pay the lien off. This is the worst option. Do not do it unless it is absolutely necessary.

D. File a quiet title action. This works for a small number of people in certain circumstances. This is not a panacea and does not work for everybody.

E. File a tax refund suit. This is what Dr. Clarkson recommends, but even so, it only works for a few people. See below.

F. Deed the property to wife or children to protect yourself against greedy hospitals, creditors, tax thieves and nursing homes. See our section on Elder Law. This will stop future liens in most but not all circumstances. Deed to wife is ineffective in community property states (i.e. Western USA ) unless you dissolve the community property status.

G. File bankruptcy. This works great, except for liens on real estate, which are secured debts, which are not erased by bankruptcy. However, a Chapter 13 (wage earner plan) or Chapter 7 Discharge can slow and temporarily halt a foreclosure auction.

H. Allow foreclosure. If all looks hopeless, or you want to move anyway, allow the loan company to foreclose. You can stall and delay the mortgage for years and live in the house without payments or rent. Put that money aside or buy silver rounds. When you have to move after 2-3 years, take your savings and buy a new house. We do not recommend this unless absolutely necessary.

Under the Taxpayer Bill of Rights, the IRS cannot foreclose unless the value of the house is about 20% plus 10% greater than the mortgage, i.e. the forced - sale value. Therefore, do not make mortgage payments and drive up the value of the home mortgage which has priority over liens filed afterward. Unfortunately, under the new regulations, few lenders will allow you to do this.

If the bank brings the foreclosure, the tax collector can collect nothing, depending on the amount of your home equity. It is true that you can delay sale and auction of your home for years, but that is hard work.

I. Property taxes are super-priority and can bump mortgages and tax liens. If you do not pay county real property taxes, the county or city can sell your house free and clear of liens, i.e. take all the money and lien holders collect nothing. Of course, the mortgage holder would bid in their note and thus protect their interests.

The tax lien holder can legally do that also, but does not do that, as the IRS cannot gain permission from national headquarters to enter a bid.

Thusly, the county auctions your home, your friend or relative bids it in and the IRS loses their money. Simple, but do not do this without legitimate legal advice. Call Dr. Clarkson.

J. Foreclosure on yourself. If you have a mortgage you can use that to bump IRS out. Hard to do, but effective. Follow Dr. Clarkson's advice carefully here.

8. You need to read and study. Tax liens are a difficult area of the law. However, the material is not hard and only takes a lot of time to study and understand. We recommend the following material:

A. Tax Collector Manual -- the actual training and instruction manual for tax collectors. Best explanation in clear and simple language of how collection and lien system of IRS operates. Essential information. $8 for Book I, II or III; $20 for set of all three books. Note: Bankruptcy on the IRS Book III of the Tax Collectors Manual explains in simple language how to discharge tax debts by IRS. $8.

B. Judgment Proofing. The Clarkson 2-part series that explains how you can protect your property from the thieving tax collector. These describe IRS collection procedures and the steps you can take to stop them. These are available on DVD or VHS for $30 each.

IMPORTANT—Real estate has particular legal requirements. Be careful. Do not take advice from friends and associates no matter how well meaning they are. Follow advice of Dr. Clarkson or a real estate lawyer, only.

C. Law Dictionary by Gifis. A good, full explanation of the terms you will see. Used by lawyers and judges. $30

D. Silver and Gold Explained. The Clarkson video that best explains a safe and secure saving system that is outside the reach of the tax thieves. Proven successful. Video $30, Audio $10.

E. Financial Privacy —No Checks. The classic Clarkson video/book that explains how you can escape the tyranny of the IRS and Federal Reserve System. Operate your business without a bank account. Video $30, Audio $10, Book $10.

All of these resources are available from the Patriot Bookstore.

Note: you can also borrow books on bankruptcy from the public library.

9. The levy on bank account. Since the banks/Federal Reserve/IRS are all the same thing, we can do little here. The IRS just switches your money from their joint account with you in their bank to their account in the same bank. It's gone and irretrievable, except with quick bankruptcy.

Under the new law, the IRS can place a hold on your account for twenty days, during which you can make a deal with the IRS. Then they will remove the hold. Best to never deal with those tax thieves, but a fake OIC or fake cooperation can remove the hold on your account.

However, you are not required to maintain a bank account—so close out all those in your name. If you have any connection to any bank account, even just a signature card, the IRS can steal it (or really, just transfer it).

The Patriot Network strongly recommends that you do NOT have a bank account or any connection with one. See Financial Privacy—No Checks.

The only effective way to protect your money in a bank account is to withdraw all funds. You can invest your savings in silver and gold. See Clarkson video Silver and Gold Explained, mentioned above.

If you feel you must have a bank account, you can open a foreign bank account (see Financial Privacy— No Checks, above), or have a friend or relative open an account in their name with no connection to you. Then they can hand you a package of pre-signed checks. However, this is not recommended. See Judgment Proofing, above.

10. These levies, as most, are not continuous and do not apply again unless the IRS sends a new levy form. However, most financial institutions ignore this provision of the law.

11. Brokerage Accounts and Investment. The IRS can steal these easily, if they bother to. It may take the tax collectors a while to levy these, but once they do, there is not much we can do. Actually, they frequently do not find brokerage accounts and almost never find other types of investments and receivables.

12. Wage and Salary Levy. The slovenly tax collectors often find your employer and steal your paycheck. This is difficult unless your employer will go along with us. However, you can:

A. Seek refund of what was stolen if you qualify.

B. Ask your company to make you an independent contractor. Then you will have no wages and salary to levy. Many books explain this option.

C. You can work for a labor service company or temporary labor supplier, often called "job shop.” Then the company would send your entire paycheck to the job shop, which would pay you with no levy on them.

The patriot community has several temporary labor companies that can hire you and sell your labor to your company. E-mail Dr. Clarkson for names and addresses.

D. Bankruptcy. You can file bankruptcy and immediately remove wage levies and in some cases make the IRS refund stolen pay. See Bankruptcy below.

E. Exemptions. When your company notifies you of a wage levy, they will give you an IRS form. Read it and you will discover that you can claim your wife and children or dependents. Your exemptions limit the IRS's thieving. You are entitled to a set-off of about $150 per week for yourself or over $650 per month. Also, each dependent, whether real or not, can give you an exemption of about $75 per week or about $300 per month per person. A large family or a part-time job would render the levy ineffective.

F. Wife sues for child support. A child support order has priority over IRS wage levy if filed first. Have your wife steal your paycheck first.

G. Sue your employer. Then they would fire you and you could collect unemployment for six to twelve months. Use this money to go into business for yourself.

H. Change jobs. If you change jobs, the Instant Robbery Squad will seldom find you (unless you claim exempt on withholding. The IRS seldom looks very hard. Your new employer will not know about the levy, which then would not apply. However if you quit your job, your pension etc. may then pay out, which the IRS would steal. Wages and salary levies are continuous, i.e. attached to future pay checks.

If your employer agrees, you can make arrangements for him to fire you and then rehire you a few days later. When he fires you, you are no longer working for the company, your levy is squashed and does not reapply when you are rehired.

13. The Tax Refund Suit. You can sue the IRS and take your case to a jury. The jurors hate the tax collectors and almost always find in your favor. Although, the U.S. Attorney knows what the jury will do and therefore will offer you a settlement that you cannot refuse.

However, to file a tax refund suit, the law requires that you first pay the taxes allegedly due. This is unwise, unless they have already stolen the money. Generally, we can force them to refund to you one-half of what was a stolen, depending on the circumstances. If you were audited or if you ignored a 90-day letter, then the tax refund suit may be the best route. No tax refund suit exists if you go to tax court.

For a tax refund suit, you must file an IRS Form 1040X, available from the IRS or the Patriot Network. The IRS will refund your money in a few months or deny your claim. After the denial or six months, you can sue. Be sure to request a jury trial. The Patriot Bookstore has a packet for Tax Refund Suits. $100, listed on the bookstore order form.

14. Bankruptcy. You can now file bankruptcy on the IRS and wipe out the tax debts for your personal income tax, but not for withholding taxes on employees.

You can file Chapter 7 for a complete and total discharge of debts, including income taxes past due three years.

Or you could file Chapter 13, the wage earner plan, to remove liens and levies and make a few payments for a few years, then a discharge.

We have books and packets for you to use to file bankruptcy by yourself without an attorney. You can also find good books at your public library that explain bankruptcy laws in simple, easy language. Feel free to call Dr. Clarkson if you are a Patriot Network member.

15. Backup and support. The Patriot Network has Dr. Clarkson and his crew of expert paralegals that can help you through the maze of revenue regulations and federal laws. Feel free to contact us for help. However, we first want you to view the Patriot Network introductory video to see what we are doing. Also, you should join the Network and receive the membership services plus attend the Clarkson Law Course.

16. Plead poverty. You can negotiate with the tax collectors and persuade them to remove liens and levies due to hardship. This could be dangerous, so be careful.

When you receive a Notice of Lien or Levy for your local tax collector, you can contact the Revenue Officer on your case. You can explain that you have no assets and no money, yet you have a number of small children. The tax collector has the authority to postpone all collection activities in such cases. However, most will deny this.

17. The OIC: Cut a deal. If you have no sizable assets, the Revenue Officers have the authority to compromise a tax claim. Often they can be very generous. The Patriot Network has negotiated very large reductions. However, the tax collectors want you to fill out a financial statement, which is worse than a 1040 form, along with other forms including past 1040's. Dr. Clarkson does NOT recommend filling out this statement unless it is the last option. After you confess all your personal and private activities, you can ask for a payment schedule to pay your taxes. The IRS loves the monthly payments and will allow almost everybody to use them. Also you can make your Offer in Compromise, which is a request to pay a lesser amount due to your impecunious state. They can and will cut your tax due but only if you beg and surrender all of your rights. Also, the Offer in Compromise can stop or slow your filing for bankruptcy. Dr. Clarkson advises, this as a last resort and even then this does not help some people unless they specifically follow our directions.

18. Illegal or harassment levy. To frighten you, the tax thieves often file illegal liens and levies. If so, you can remove them by writing a few careful letters and contacting your Congressman. See Clarkson's Earnest Letter Writing book.

Often the thieves will file a tax lien prior to issuing the 90-day letter or Notice of Deficiency, a mandatory step. If so, you can sue to easily remove the lien. To scare people, the collection agents will slap seizure notices around. This is illegal and easily overturned. You can put the tax rat in jail if you are willing to push hard enough. You can sue them for $100,000 damages under the Illegal Tax Collection Act IRC §7433.

19. The Taxpayers Advocate (formerly the PRO). You can contact the Problems Resolution Officer in any district office. Some are helpful but none have much authority and most are incompetent. The chief PRO or Taxpayer Ombudsman, New National Taxpayer Advocate is in the IRS national office in Washington , DC . You can file the Taxpayer Assistance Order (Form 911) for an order halting IRS activity. Try it.

20. The 1040X: You can amend old returns by filing a 1040X Amended Return. If the IRS audits a return and you lose the audit, you can restart the audit with the 1040X. Also, if the rotten tax collectors file a tax return for you or audit you for not filing, they will dream up large figures against you. If you do not have any sizeable assets, you can laugh away their non-collectible judgments. However, if they can find a way to punish you, you can beat them with the 1040X.

The amended tax return is also the first step for the tax refund suit. To fill out this form, put down what they say are your figures, then enter the correct ones. This is not complicated. You can hire a tax preparer for this. However, some tax return preparers will try to overcharge you. Shop around to find a cheap one or call the Patriot Network. Or, just attach to the 1040X a copy of old or correct returns.

The important part of the 1040X is Part II on the back. Here, explain carefully what you want. You may not be able to add new figures later. Explain, for example, that the IRS audited you and came up with figures that are incorrect and taxes that are not owed, that you do not owe the taxes because you have children, dependents, etc. You can file as many 1040X's as you wish. Do so.

21. Contractor Payments: If you do not work for wages and salaries but work as an independent contractor, you are not an employee and you receive contract payments. Frequently, the IRS will illegally and incorrectly use a wage levy on contract payments. Your company will honor this immoral act, outlawed even by the IRS, because the payroll department does not understand the law nor care about your rights.

The law provides for continuous levy and seizure of wages and salaries only and nothing else. However, the company will illegally treat a seizure of contract payments as continuous. The IRS law provides that a levy on money due you other than wages and salaries steals only what the company owes you at the time the levy is received, nothing else.

If you have a problem here, the Patriot Network can help.

Note: the information in this Report is updated from time to time in the e-Patriot Cannon E-Zine according to what laws are changed or added. It is very important for you to learn of further strategic developments.

Click here to join the Patriot Network, so we can help you with IRS harassment!

Robert Clarkson is a graduate of Clemson University in economics (1969) and the University of South Carolina Law School (1974). He is one of the South's leading patriotic political organizers. (feb08)


COLLECTION ENFORCEMENT BY LEVY ACTION
Disclaimer: This was not written by Robert Clarkson and is for informational purposes only.


This guide has been put together to help those taxpayers who are currently coping with levies against their income. This guide addresses both the issue of continuous levies and levies against Social Security Benefits.

Extensive research has been done in both areas and have resulted in the following conclusions:

1. Your Congress did not intend for the levy system to leave it's citizens without the means to pay for the necessities of life. Congress has provided restrictions within which the IRS must comply when collecting taxes by enforcement action. In 1998 Congress passed the Restructuring and Reform Act. This act provided the taxpayer with more Due Process in IRS Collection Actions than ever before. The problem we are now faced with is exercising and enforcing those rights.

2. The IRS will ignore the levy restrictions and your due process rights and will force the taxpayer to undergo extensive administrative procedures to force the IRS to comply with the restrictions contained in the laws.

3. The IRS will levy in excess of the 15% maximum allowed for continuous levies. 

4. The IRS' position is that "Social Security benefits are not exempt from levy under IRC Section 6334". This statement has appeared on numerous letters from the IRS to the taxpayers, who have challenged the legality of  the IRS attaching a levy their benefits. The IRS will levy Social Security Benefits. This has become our toughest challenge. The IRS' position is that they have always had the right to levy Social Security Income for Aged,  Blind, and Disabled, also known as SSI. They admit they have never and still do not have the right to levy Social Security Income for the Disabled before retirement also known as SSD. However, they will levy all Social Security Income. Our position is that the IRS does not have the right to levy any Social Security Benefits pursuant to 42 USC 407 and that Congress never intended the IRS to have the right to levy those benefits. > 

5. The Social Security Administration's position is that "the Internal Revenue Code, Sections 6331 and 6334, a levy may be imposed on a Social Security benefit for the collection of delinquent Federal taxes. The "Deficit Reduction Act of 1984" amended section 6334(c) of the Internal Revenue Code to clarify that Social Security benefits are subject to levy the United States to satisfy unpaid taxes." This statement has appeared on numerous letters from the Social Security Administrative to the beneficiary, who have challenged the legality of the IRS attaching a levy to their benefits.

6. The primary reason Congress gave the taxpayer the right to a "Collection Due Process Hearing" was to address these problems. This right was granted in the 1998 Restructuring and Reform Act. The hearing process has been under tremendous attack by the judicial system and has  resulted in most decisions in favor of the IRS. We believe this has come about for several reasons.
 
a. The judicial system has always leaned in favor of the Government,  especially in the area of tax. The "Collection Due Process Hearing" has placed an added burden on the judicial system.
b. The taxpayer has used the "Collection Due Process Hearing" to challenge the legality of the income tax. This was not what Congress intended and this has caused a great burden upon the administrative process and the judicial process.
      
The "Collection Due Process Hearing" is the administrative process you must use to challenge the procedures being used in levying your income. This means even if you owe the tax liability and the IRS is levying in excess of  the statutes, you must request a hearing in order to be heard. The Restructuring and Reform Act of 1998 required the IRS to offer a Collection Due Process Hearing for all collection action by levy.
     
The Internal Revenue Manual states the following:
"The Restructuring and Reform Act (RRA) of 1998 established the Due Process appeal rights under IRC 6320 and IRC 6330. These provisions apply to levy and lien actions taken after January 18, 1999." See [5.1]9.3 

Section 3401 Due Process in IRS Collection Actions states the following:
 
"This new notice requirement applies to levy actions that occur on or after the effective date of this provision. When this provision goes into effect, no matter how old or how recently a notice of intent to levy has been issued, there will also have to be a notice of a right to a hearing before a levy."
You may request a Collection Due Process Hearing on Form 12153.  In order to determine if a levy is being properly carried out, you must apply both 26 USC 6331 and 26 USC 6334 to your situation and any applicable statutes outside of Title 26, that would be authority over Title 26 statutes. The following outlines the sections that apply to a continuous levy and the maximum 15%. 

Continuous Levies 26 USC 6331 Levy and Distraint 
26 USC 6334  Property Exempt From Levy 

In addition to granting the Secretary the authority to use levy and distraint action in the enforcement and collection of taxes, 26 USC 6331(h)(1) and (2)(B) provide a maximum limitation of 15% on levies against wages, salary and other income, which states, "such continuous levy shall attach to up to 15 percent of any specified payment due to the taxpayer". 

Simply stated section 6334(a)(9) provides for the minimum exemption for wages, salary, and other income, while Section 6331(h)(1) and (2)(B) provide for the maximum limitations for wages, salary, and other income. Both statutory requirements must be in compliance. 
     

Section 6334(a)(9) provides in part: 

(9) Minimum exemption for wages, salary, and other income: Any amount payable to or received by an individual as wages or salary for personal services, or as income derived from other sources, during any period, to the extent that the total of such amounts payable to or received by him during such period does not exceed the applicable exempt amount determined under subsection (d).    
     

There is both a minimum exemption for wages, salary and other income and a maximum limitation allowed on continuing levies. 
     
Section 6331(e) provides in part: (e) The effect of a levy on salary or wages payable to or received by a taxpayer shall be continuous from the date such levy is first made until such levy is released under section 6343.   
     
Section 6331(h)(1) and (2)(B) also provide for a maximum amount for continuous levies which include salaries and wages. 
     
Section 6331(h)(1) and (2)(B) are applicable to this levy action and provide in part: 

(h) Continuing levy on certain payments 

(1) If the Secretary approves a levy under this subsection, the effect of such levy on specified payments to or received by a taxpayer shall be continuous from the date such levy is first made until such levy is released. Notwithstanding section 6334, such continuous levy shall attach to up to 15 percent of any specified payment due to the taxpayer. 

(2) Specified payment: For the purposes of paragraph (1), the term "specified payment" means (B) any payment described in paragraph (4), (7),  (9), or (11) of section 6334(a) 
     

The statute could not be more complete. Any specified payment under any paragraph described in Section 6331(h)(2)(B) cannot be levied for more than a maximum of 15 percent. 

Wages and salaries are the "specified payment" described in paragraph (9) of section 6334(a) described here in section 6331(h)(2)(B). You cannot under any condition levy and seize more than the statutes permit. 
     

Section 6334(a)(9) provides in part: 

(9) Minimum exemption for wages, salary, and other income: Any amount payable to or received by an individual as wages or salary for personal services, or as income derived from other sources, during any period, to the extent that the total of such amounts payable to or received by him during such period does not exceed the applicable exempt amount determined under subsection (d). 

Levies on Social Security Benefits 42 USC 407 Assignment; 
Amendment of Section 26 USC 6331 Levy and Distraint 26 USC 6334 Property Exempt From Levy 

History shows that these benefits have been consistently immune from levy and seizure action since the enactment of the original Social Security Act. 
     Section 208, "the right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of  the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment or any other legal process, or to any bankruptcy or insolvency law."
      

The statute could not be more complete. You cannot under any condition levy and seize any portion of Social Security Benefits payable to any person for any reason. Social Security Benefits remain immune to any seizure or limitations. This is the one asset which is and remains invulnerable to seizure. 

Social Security Benefits are immune from levy pursuant to the statutes. Title 42 section 407 establishes that these benefits shall not be subject to levy and 26 USC 6331 and 26 USC 6334 together confirm this. 
     
42 USC 407 Assignment of Benefits 

(a) The right of a person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment or any other legal process, or to any bankruptcy or insolvency law. 
(b) Amendment of section: no other provision of law, enacted before, on, or after April 20, 1983, may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section. 

26 USC 6331 Levy and Distraint 
(a) Authority of Secretary 

If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. 
(b) Seizure and sale of property 
(c) Successive seizures 
(d) Requirement of notice before levy 
(e) Continuing levy on salary and wages  
(f) Uneconomical levy 
(g) Levy on appearance date of summons 
(h) Continuing levy on certain payments 

(1) If the Secretary approves a levy under this subsection, the effect of such levy on specified payments to or received by a taxpayer shall be continuous from the date such levy is first made until such levy is released. Notwithstanding section 6334, such continuous levy shall attach to up to 15 percent of any specified payment due to the taxpayer. 
(2) Specified payment means 
(A) any Federal payment other than a payment for which eligibility is based on the income or assets (or both) of a payee, 
(B) any payment described in paragraph (4), (7), (9), or (11) of section 6334(a), and 
(C) any annuity or pension payment under the Railroad Retirement Act or benefit under the Railroad Unemployment Insurance Act. 

26 USC 6334 Property Exempt from Levy 

(a) There shall be exempt from levy 
(11)Certain public assistance payments: Any amount payable to an individual as a recipient of public assistance under - 
(A) title IV or title XVI (relating to supplemental security income for the aged, blind, and disable of the Social Security Act, or 
(c) No other property exempt: Notwithstanding any other law of the United States (including section 207 of the Social Security Act), no property or rights to property shall be exempt from levy other than the property specifically made exempt by subsection (a).  
(f) Levy allowed on certain specified payments: Any payment described in subparagraph (B) or (C) of section 6331(h)(2) shall not be exempt from levy if the Secretary approves the levy thereon under section 6331(h). 

6334 NOTES  References in Text The Social Security Act, referred to in subsecs. (a)(11)(A) and (c), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Titles IV and XVI of the Social Security Act are classified generally to subchapters IV (Sec. 601 et seq.) and XVI (Sec. 1381 et seq.), respectively, of chapter 7 of Title 42,  The Public Health and Welfare. Section 207 of the Social Security Act is classified to section 407 of Title 42. 

American Jurisprudence 2000 Edition 
Social Security and Medicare 
Assignment and Withholding of Benefits 

Assignment 1990 SSI benefits cannot be assigned A provision of the Social Security Act, which states that the right of any person to future OASDI payments cannot be transferred or assigned, and that no money paid or payable or any right existing under the OASDI program is subject to execution, levy, attachment, garnishment or other legal process, or to the operation of any bankruptcy or insolvency law, is applicable to SSI payments as well. The SSA will not certify the payment of SSI benefits to a transferee or assignee of an eligible person or of a survivor of an eligible person who is entitled to receive the payment of an underpayment. 

Practice Guide: SSI benefits are expressly exempt from an Internal Revenue Service Levy to collect unpaid federal taxes. 

26 U.S.C.A. 6334(a)(11)(A). The SSA's responsibility for protecting benefits against legal process and assignment ends when the claimant is paid; however, the claimant can use these statutory provisions as a personal defense against actions to order payment of the benefits to someone else or legal processes to take the benefits.

Internal Revenue Service Procedures
Automated Levy Program 

Taxpayers are being told by IRS agents and Taxpayer Advocates that the Federal Payment Levy Program gives them the right to levy on Social Security. This is not correct. The Federal Payment Levy Program is not a statute but an automated system of matching taxpayer numbers with federal payments. Federal payments describe any payment made by the Federal Government, such as student loans, federal employees salaries and vendor payments. The IRS has included Social Security in the Federal Payment Levy Program because it is a Federal payment, however, the IRS ignores the ruling statute, 42 USC 407.

Part 5, Collecting Process Chapter 11, 
Notice of Levy
Section 7, 
Automated Levy Programs 
Background and Authority (5.11.7.2.1 (10-27-2000)

According to the Internal Revenue Manual, the IRS is allowed by law to levy up to 15% of Social Security Benefits. This is accomplished via the Federal Payment Levy Program (FPLP), which states in part: 

"Internal Revenue Code (IRC) Section 6331(h), as prescribed by the Taxpayer Relief Act of 1997 (Public Law 105-34) Section, authorizes the Internal Revenue Service to issue continuous levies on certain federal payments."  

"The law allows up to fifteen percent of (15%) specified payments to be levied. Specified payments include any federal payment other than a payment for which eligibility is based on the income and/or assets of a payee (e.g.: > Medicaid)." 

"The Department of Treasury, Financial Management Service 

(FMS) is the disbursing agent for many of the federal payments that can be levied."  

"FPLP is a paperless, automated levy program the IRS has implemented with FMS that will systemically attach 15% of certain federal payments made by FMS." 

"FPLP will be phased in over a 3 to 4 year timeframe. The first phase of the FPLP was implemented in July 2000." See IRM Part 5, Collecting Process, Chapter 19, Liability Collection, Section, Automated Levy Programs. 

Part 5, Collecting Process Chapter 11, 
Notice of Levy
Section 7, 
Automated Levy Programs 
Background and Authority (5.11.7.2.1 (10-27-2000)

1. Internal Revenue Code (IRC) Section 6331(h) as > prescribed by the Taxpayer Relief Act of 1997 (Public Law 105-34) Section 1024, > authorizes the Internal Revenue Service to issue continuous levies on > certain federal payments.  

2. The law allows up to fifteen percent of specified payments to be levied. Specified payments include any federal payment other than a payment for which eligibility is based on the income and/or assets of a payee.  

3. FMS disburses some of the federal payments that are available for levy under this new law.  

4. Although the law also allows levy on some payments that are exempt pursuant to IRC Section 6334(a), the Service will not pursue those payment sources at this time.  

Part, Collecting Process 
Chapter 10, 
Liability Collection 
Section 9, 
Automated Levy Programs

1. Internal Revenue Code (IRC) Section 6331(h), as prescribed by the Taxpayer Relief Act of 1997 (Public Law 105-34) > Section, authorizes the Internal Revenue Service to issue continuous levies on certain federal payments. 

2. The law allows up to fifteen percent of (15%) specified payments to be levied. Specified payments include any federal payment other than a payment for which eligibility is based on the income and/or assets of a payee (e.g.: Medicaid). 

3. The Department of Treasury, Financial Management Service (FMS) is the disbursing agent for many of the federal payments that can be levied. 

4. FPLP is a paperless, automated levy program the IRS has implemented with FMS that will systemically attach 15% of certain federal payments made by FMS.  

5. FPLP will be phased in over a 3 to 4 year timeframe. The first phase of the FPLP was implemented in July 2000.


Letters to Remove TOP Levies

Jose S. Freeman
Freedom Way
Freedomville, SC 22222

Aug. 30, 2005

Social Security Administration
6401 Security Blvd.
Baltimore, MD 21235

123-45-6789

Dear Sir or Madam,

The Social Security Administration has removed from my retirement benefit check the amount of 15% under the Treasury Offset Program (TOP). This was sent to the IRS. This is a hardship for me. This check is all I have to live on. I do not have any other income or monies. My health is failing me since my surgery and at present I still have to see a doctor to advise me about a cataract in my right eye. I request that the 15% offset be waived and/or removed due to hardship, this check is all I have to live on.

Yours,

Jose Freeman

__________________________________________________________________________________________

Doug K. Patriot
1776 Patriot Way
Longmont, USA

SSN# 222-33-4444

Social Security Administration
6401 Security Blvd.
Baltimore, MD 21235

Dear Sir or Madam:
The Social Security Administration has removed from my retirement benefit check the amount of 15% under the Treasury Offset Program (TOP). This was sent to the IRS. This is a hardship for me. This check is all I have to live on. I do not have any other income or monies. I have coronary artery disease and I had heart surgery to put in a stent and at present I still have to see a doctor to advice me about my high blood pressure. I request that the 15% offset be waived and/or removed due to hardship. This check is all I have to live on.

Yours, Doug K. Patriot

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Assistance on Complex Tax Issues

If you have questions regarding basic lien inquiries such as routine lien releases and lien payoff amounts, contact the Centralized Lien Unit by calling the toll free telephone number (1-800-913-6050). When faced with a complex lien issue, consider contacting the Collection Technical Services (TS) Advisory function. TS Advisory is a collection compliance function that interacts with taxpayers on complex lien issues such as: Certificate of Discharge, Subordination, Subrogation, Non-Attachment, Withdrawal and other complex lien issues. Publication 4235, Technical Services Advisory Group Addresses should be used to locate the appropriate office to contact for assistance. http://www.irs.gov/pub/irs-pdf/p4235.pdf

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