The IRS could levy taxpayers social security benefit even after the expiration of the statute of limitation (SOL)

In Ward Franklin Dean v. United States (USCA11 Case: 20-1442) on Appeal from the United States District Court for the Northern District of Florida, the court affirmed the legal authority of the IRS to levy on the social security benefit of Dean even though the 10 years for collections has passed.

The Internal Revenue Service, in June 2013, served a notice of levy on the Social Security Administration, seizing Dean’s “entire social security benefit”. Dean filed a civil suit in 2019, alleging that IRS employees had negligently or recklessly disregarded various provisions of the Internal Revenue Code, in violation of section 7433, by unlawfully seizing his Social Security benefit payments to pay tax debts that he claimed had been eliminated by operation of statute and by the IRS’s release of tax liens. He acknowledged that he owed “substantial” federal income tax and additions to tax for the years 1997 through 2005.

The Internal Revenue Code section 301.6343-1(b)(1)(i) states that a levy made outside the statutory collections period generally must be released. And a continuing levy on salary or wages must be released at the end of the ten-year collections period. However, per section 301.6343-1(b)(1)(ii), “a levy on a fixed and determinable right to payment which right includes payments to be made after the period of limitations expires does not become unenforceable upon the expiration of the period of limitations and will not be released under this condition unless the liability is satisfied.”

The magistrate judge issued a report and recommendation concluding that even if the facts alleged in Dean’s complaint were accepted as true, Dean had not stated a claim for damages under section 7433 because the IRS’s continued receipt of Dean’s Social Security payments under the 2013 levy was lawful.

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