IRS and Disability benefits

[kaffe]

I have a friend that had a stroke 5 years ago - she lost everything she
owned, her business, home, etc. She has applied for
Social Security disability benfits but is afraid because she owes the
IRS money for personal income tax prior to stroke, that she
will lose it to the IRS. Can the IRS take someone's disability money?
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[D. Stussy]

On Sat, 31 Jul 1999, kaffe wrote:
> I have a friend that had a stroke 5 years ago - she lost everything she
> owned, her business, home, etc. She has applied for
> Social Security disability benfits but is afraid because she owes the
> IRS money for personal income tax prior to stroke, that she
> will lose it to the IRS. Can the IRS take someone's disability money?

With the new collection procedures, there is a standard amount for living
expenses (has this been "regionalized" yet?) that is exempt. Anything in
excess of that amount can generally be taken. However, I don't know about the
specifics of this case (another U.S. government payment being taken to satisfy
a U.S. liability - where it's not done automatically by the gov't computers).
However, if the disability payments are needed for care of the medical
condition giving rise to the disability, one can claim "medical hardship" and
the "kinder, gentler IRS" should keep their hands off (and if you believe that,
I have a bridge for you to buy...).

The professionals that deal with collection issues more than I should be able
to give you a better picture.

[Paul J. Berg]

From Section 157, SSA Handbook
<http://www.ssa.gov/OP_Home/handbook/handbook.01/hbk-0157.htm>:

"Social Security benefits can be levied by the Internal Revenue Service
for unpaid Federal taxes. They can also be garnished for the collection
of unpaid child support and or alimony. SSI payments cannot be levied or
garnished."

Paul J. Berg, Former IRS Official and Retired Tax Professional
<http://www.inergy.com/P-J-BERG>

This advice is general in nature and not meant as specific tax advice.
Because all relevant facts may not have been provided, please seek
appropriate advice from a currently working tax professional before
taking any action based on this information.