Levy in Special Cases

Levy in Special Cases

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Notice of Levy in Special Cases

5.11.6 Notice of Levy in Special Cases

5.11.6.1 Retirement Income

5.11.6.2 Funds in Pension or Retirement Plans

5.11.6.3 Insurance

5.11.6.4 Government Employees

5.11.6.5 Federal Contractors

5.11.6.6 Levy on Other Government Payments

5.11.6.7 Receivables

5.11.6.8 Securities—Stocks, Bonds, Mutual Funds, etc.

5.11.6.9 United Nations (UN) Employees' Income

5.11.6.10 Mutilated Currency

5.11.6.11 Levy on Non-Liable Spouse in a Community Property State

5.11.6.12 Levy on Inheritances

Exhibit 5.11.6-1 Addresses often used for Levy on Federal Contracts

Exhibit 5.11.6-2 Social Security Levy Payment

5.11.6.1 (06-29-2001)
Retirement Income

A notice of levy is continuous for wages and salary. Other levies only reach property a third party is holding when the levy is received.

Reminder:

References to property include rights to property.

As long as the taxpayer has a fixed and determinable right to property, a levy attaches that right. Therefore, a levy on retirement income can reach payments in the future when the taxpayer would have received them, although the taxpayer has not begun receiving payments yet when the levy is served. This often means that a levy on retirement income reaches future payments. Because this type of levy may begin attaching payments long after the levy is served, follow up when the taxpayer is expected to become eligible to receive payments. This may require a mandatory follow up for TDAs reported currently not collectible.

If the taxpayer has the right to receive future payment but has not opted to do so, the levy attaches that right.

Use discretion before levying retirement income.

A levy served while the taxpayer is receiving periodic payments reaches payments due then, as well as payments as they become due later, as long as there is already a fixed and determinable right to the future payments.

5.11.6.1.1 (05-05-1998)
Social Security

The Social Security Administration (SSA) makes payments for:
- Retirement, Survivors, and Disability Insurance (RSDI) and
- Supplemental Security Income (SSI).

RSDI is based on social security taxes during a person's working years. RSDI payments are not based on need, and they can be levied. SSI payments are for needy people who are elderly, blind, or disabled. These payments are exempt from levy.

Send Part 1 of Form 668–W to the SSA office that issued the taxpayer's social security number. Include Notice 484. See Document 6408, Notice of Levy Address Directory. Send the other parts of the levy to the taxpayer with Notice 483. Make appropriate changes to Notice 483 and 484.

Once a levy is served, SSA will continue honoring it, until the levy is released. However, the taxpayer's eligibility for benefits could change. This might stop the levy proceeds. If this happens, SSA will notify the office that issued the levy not to expect more payments. However, SSA is not allowed to explain why. This would violate the privacy laws that restrict who SSA can disclose benefit information to.

Example:

The taxpayer may get full benefits when the levy is served. Later, the person starts working. This may reduce the benefits to less than the exempt amount, so there will be no levy proceeds. If the person stops working and gets full benefits again, SSA will not automatically start sending levy payments. A new levy must be served.

There is limited space on the check for information to identify the payment. Each line is limited to 22 characters. The check is sent in a window envelope with information in Exhibit 5.11.6–2 showing through the window. There is no need to send a supply of reply envelopes with the levy.

5.11.6.1.2 (11-05-1999)
Military Retirement

See Document 6408 for addresses for mailing levies on military retirement.

Expect the first payment two to three months after the notice of levy is sent.

If	Then
The levy is received by the 15th of the month.	The first payment is sent on the first business day of the second month after that.
The levy is received after the 15th of the month.	The first payment is sent on the first business day of the third month after that.

Example:

A levy is received on September 12. The first payment is sent on the first business day of November.

Example:

A levy is received on September 19. The first payment is sent on the first business day of December.

5.11.6.1.3 (06-20-2001)
Civil Service Retirement

See Document 6408 for the address for these levies.
If the civil service account number is known, include it on the levy.
Expect the first payment in two to three months. See IRM 5.11.6.1.2(2).

5.11.6.1.4 (05-05-1998)
Railroad Benefits, Medal of Honor Winners, and Annuities for Military Families and Survivors

Certain annuity and pension payments are exempt from levy. See IRC 6334.

The exempt payments include:
- Railroad Retirement and Unemployment
- Special Pensions for Medal of Honor Winners
- Annuities under the Retired Serviceman's Family Protection Plan and Survivor Benefit Plan

5.11.6.2 (06-29-2001)
Funds in Pension or Retirement Plans

These instructions cover money accumulated in a pension or retirement plan, as well as Individual Retirement Arrangements (IRAs). They do not deal with levying retirement income. See section IRM 5.11.6.1.

There are many employer and self-sponsored retirement vehicles that are not exempt from levy. However, because these provide for the taxpayer's future welfare, levy on the body of funds in a retirement account (as contrasted with income from the account), only in flagrant cases. These plans include, for example:
- Qualified Pension, Profit Sharing, and Stock Bonus Plans
- IRAs
- Retirement Plans for the Self-Employed (such as SEP-IRAs and Keough Plans)

The taxpayer may be able to withdraw money in a lump sum from a plan. If the taxpayer has the right to do so, a levy can reach that right. However, remember that a levy only reaches the taxpayer's present rights.

Example:

The taxpayer has $10,000 in a plan but can only withdraw it later. The taxpayer may have a present right to the money, although it can not be withdrawn immediately. A levy may reach that right, but the money can be not paid over until the taxpayer can withdraw it. At that time, there may be $30,000 in the plan. Without a new levy, though, only $10,000 could be paid over.

Example:

The taxpayer has money in a plan. The terms of the plan do not allow for any lump sum withdrawal. The plan provides a right in the future to receive monthly payments, but the taxpayer has not paid into it long enough yet to qualify for any future payments. A notice of levy attaches nothing, because the taxpayer has no present property rights.

The notice of levy form says it does not attach money in pension or retirement plans. However, in an exception, these funds can be levied. To do this, sign the Notice of Levy in the block to the left of, "Total Amount Due."

Note:

If the Form 668–A revision date is before July 1992, there is no signature block for this. Instead, cross out the word "not" in the sentence to the left of, "Total Amount Due." Then, initial above this change.

Have the SB/SE Compliance Area Director approve the notice of levy. See IRM 5.11.1.2.4.

Note:

The Director of Compliance Services and the Director of Specialty Tax and Technical Support at Headquarters are also authorized to approve these notices of levy.

Consider discussing the case with the Employee Plans Group before issuing the levy. Their advice, as well as advice from Technical Support and Associate Area Cousel, may be needed to determine the present right to property. Often, a levy is served before the taxpayer's precise rights are determined. Try to get a copy of the plan instruments as soon as possible to determine the taxpayer's interests in the plan.

When money is withdrawn from a retirement account, the taxpayer may be liable for income tax on the withdrawal. If the taxpayer is less than 59¹/₂ years old, there may also be 10 percent additional tax on early distributions. However, there are several exceptions that can relieve the taxpayer from the 10 percent additional tax on early distributions.

On January 1, 2000, a new exception was added to the Internal Revenue Code. If the money was withdrawn, because a notice of levy was served on the retirement account, the taxpayer does not owe the 10 percent additional tax on early distributions. There may still be income tax owed for the amount withdrawn, however.
Send Letter 3257 (DO) with the notice of levy and Letter 3258 (DO) with the taxpayer's copy of the notice of levy. These letters say that the withdrawal is not subject to the tax on early distributions, even if the taxpayer is under 59 ¹/₂ years old. These letters are available as macros on the Integrated Collection System.

5.11.6.2.1 (06-29-2001)
Thrift Savings Plan

Federal employees may contribute to the Thrift Savings Plan (TSP). Generally, distributions cannot be paid from taxpayers' accounts before they have left federal service, so there may be no immediate right to withdrawn money from the TSP account.

If	Then
The taxpayer is a current federal employee.	The levy attaches to the taxpayer's TSP account. However, the TSP will not have to send money until the taxpayer could withdraw it.
The taxpayer is receiving regular payments of money from the TSP.	The levy attaches these payments.
The taxpayer has left federal employment and still has funds in the TSP to continue growing.	A levy attaches the taxpayer's account.

The TSP is administered by the Thrift Investment Board (TIB) which has contracted with the Department of Agriculture's National Finance Center in New Orleans to be the TSP record keeper. See Doc. 6408 for the address.

TIB's position is that money in the TSP can not be levied. This includes funds that have accumulated in the Plan, as well as periodic payments that are being made to taxpayers. Counsel is discussing this with TIB's counsel. Because of this, get advice from Associate Area Counsel before issuing a levy to TIB.

5.11.6.3 (05-05-1998)
Insurance

This contains instructions on insurance.

5.11.6.3.1 (05-05-1998)
Cash Loan Value of Life Insurance

The cash loan value of life insurance and endowment contracts can be levied. The policy does not have to be surrendered. See IRC 6332(b).

5.11.6.3.1.1 (06-29-2001)
Serving the Levy

Generally, do not levy this if the taxpayer has:
- few assets,
- small income, and
- policies with a face value below $1000.

Include these on the levy, if they are known:

policy number(s) and, "and any other policies this person owns on his/her life,"
date of birth, or
taxpayer's approximate age and spouse's name.

The group manager or an Insolvency/Technical Support manager (second level or above) must approve the notice of levy. See IRM 5.11.1.2.4. See Document 6408 for addresses.

The insurance company does not have to turn over money until 90 days pass.

Project accruals for this long.
Above the taxpayer's name and address, write, "I certify that a copy of this notice was mailed on (insert date) to the taxpayer's last known address."
Sign this statement.
Mail Part 3 to the taxpayer before sending the levy to the insurance company.

5.11.6.3.1.2 (06-29-2001)
Payment for a Levy on the Cash Loan Value of Life Insurance

If the amount owed is paid before 90 days, send the insurance company Letter 980(DO) with a release.
The taxpayer can ask the insurance company to pay before 90 days to save penalty and interest. A new payoff figure may be needed.
If the amount is not paid within 90 days, send Letter 980(DO) to the insurance company. This tells them the amount still owed. Send the letter even if the amount has not changed.
The insurance company must pay over the amount the taxpayer could have gotten as a loan. This is computed to the 90th day after the levy. Automatic premium loans and contractual interest is not paid over, if they keep the contract in force. However, an agreement to do this must be before the insurance company knew of the tax lien.

5.11.6.3.1.3 (06-29-2001)
Actual Knowledge of the Tax Lien

The insurance company may have to pay more than the amount in IRM 5.11.6.3.1. Actual knowledge of the tax lien gives it priority over the insurance company if there are loans later. This means these policy loans (and contractual interest) must be paid over, too, if a levy is served.

Give the insurance company a copy of the lien or a letter to give actual notice of the lien. This stops the taxpayer from taking loans as equity builds up in the policy.

Note:

Do not try to give notice by serving a new levy. This starts the 90 day period again.

5.11.6.3.2 (06-29-2001)
Foreclosure on the Policy

There is also a right to foreclose on the policy, if necessary. Consult withTechnical Support and Associate Area Counsel for advice. See IRM 5.17.3.5.11, Legal Reference Guide for Revenue Officers, for discussion of the differences between foreclosing on the policy to obtain the cash surrender value and levying to obtain the cash loan value.

5.11.6.3.3 (05-05-1998)
Veterans Administration Insurance Policies

Dividends payable in cash and the cash loan value of Veterans Administration (VA) insurance policies can be levied.

Exception:

If the dividends are applied to pay future premiums, they can not be levied.

5.11.6.3.3.1 (05-05-1998)
Levy on Dividends of VA Policies

Before serving a notice of levy on VA insurance policy dividends, use Form 2876 to get:
- Insurance File Number
- Policy Number
- Anniversary Date of the Policy
- Office that Pays Dividends
Note:

The P.O. Box for Philadelphia on Form 2876 is wrong. Use Box 42954, instead.

Dividends are payable on:

United States Government Life Insurance Policies
National Service Life Insurance Policies

Exception:

Policies with a number preceded by RH do not pay dividends.

To levy dividends, mail Form 668A(C)(DO) thirty days before the policy's anniversary date.

Write, "Levy is only on dividends," on the levy.
Write, "Policy Number ______," above the taxpayer's name and address.

Exception:

If the policy number and file number and are different, write, "Policy No. ______(File No. ______)," on the levy.

5.11.6.3.3.2 (06-29-2001)
Levy on Cash Loan Value of VA Insurance Policies

Many VA insurance policies have cash loan value. This can be levied like other life insurance policies. Some policies are term life insurance. These have no cash loan value.
Write, "Cash Loan Value: $ ______," in the Remarks block of Form 2876 to find out this amount. If the policy is term, VA will write, "Term Policy," in this space, instead of an amount.
Write, "Levy is only against cash loan value," on the levy. Also, include the policy number. Use other procedures in IRM 5.11.6.3.1, above. For example, send Letter 980(DO) after 90 days.

5.11.6.3.4 (06-29-2001)
Insurance Company Employees

To levy an insurance company employee's income, send Form 668W(C)DO. Write on the form that it is levying the person's income. This may prevent confusion between these and levies on policies.
The addresses in Document 6408 may not be right for these levies. Contact the insurance company to determine where to send the levy.

5.11.6.3.5 (06-29-2001)
Death Benefits

Death benefits from an insurance company or a government agency (Veterans Administration, Social Security Administration, etc.) can be levied. However, only use this source in flagrant cases. Consider whether the levy will cause a hardship and whether it may prevent the taxpayer from paying the funeral expenses of the person who died.

Because of the sensitive nature, have the SB/SE Compliance Area Director approve the notice of levy. See IRM 5.11.1.2.4.

Note:

The Director of Compliance Services and the Director of Specialty Tax and Technical Support at Headquarters are also authorized to approve these notices of levy.

5.11.6.4 (05-05-1998)
Government Employees

The income of federal, state and local government officers and employees can be levied. This includes:
- Civilian Employees
- Military Personnel
- Elected Officials
- Appointed Officials

If the taxpayer increases voluntary deductions after a levy is served, tell the employer that this is not allowed.

Note:

Comptroller General's Decision B–45105 explains this to federal payroll offices. This decision is dated January 21, 1955, and amended April 18, 1955.

5.11.6.4.1 (06-29-2001)
Military Personnel on Active Duty

A levy on the income of active military personnel does not attach just wages and salary. It also attaches:
- Payments for Quarters
- Subsistence
- Travel
- Clothing and uniform Allowances
- Personal Money and Overseas Allowances
- Reimbursement for Shipment of Household Goods
- Lump Sum Leave Payments
- Retirement Income (Including Disability Payments)
- Re-enlistment Bonuses
- Severance Pay
- Mustering Out Pay
- Savings Deposits
Exception:

See IRM 5.11.1.3.1(4).

See Document 6408 for addresses to mail these notices of levy.

If	And	Then
The taxpayer is in the Air Force or Marines.	The taxpayer is on active duty or is in the reserves.	Include the taxpayer's military service address on the levy, if it is known, e.g. Andrews Air Force Base.

Use Letter 1096(DO) to follow up on military levies.

If	Then
The taxpayer is overseas.	Follow up 10 weeks after the levy is acknowledged.
The taxpayer is in the United States, except for Air Force.	Follow up four weeks after the levy is acknowledged.
The taxpayer is in the United States and is in the Air Force.	Follow up eight weeks after the levy is acknowledged.

A response should be received to Letter 1096(DO) within 30 days. If not, call the finance center or send a new notice of levy.

The taxpayer may pay the amount owed before the levy proceeds are received. If the release does not stop the proceeds in time, a payment for the levy will be received. Do not return the check to the finance center. Credit the money, so the overpayment will generate a refund. If a hardship exists, request a manual refund. See IRM 5.1.15.

5.11.6.4.2 (05-05-1998)
Military Class Q Allotments

Class Q allotments are for dependents of military personnel. They can be levied to collect tax from the dependent.

5.11.6.4.3 (06-29-2001)
Health and Human Services Employees

The Department of Health and Human Services maintains a central payroll office. See Document 6408. These payroll records include:
- HHS in metropolitan Washington, DC
- HHS Regional Offices
- Public Health Service
- Food and Drug Administration
Reminder:

The Social Security Administration is no longer part of HHS.

Send the Statement of Exemptions and Filing Status directly to the taxpayer. See IRM 5.11.5.4.2.

5.11.6.4.4 (06-29-2001)
Postal Service Employees

For levies on postal employees, include the following, if they are known:
- Postal Service Employee Number,
- Type of employment, and
- The town where the employee works, if it is different from where the employee lives.

Do not send notices of levy on postal employees to the address in the 11–1998 revision of Document 6408. Instead, send them to

U.S. Postal Service
Minneapolis Information Service Center
Involuntary Deduction Unit
2825 Lone Oak Pkwy.
Eagen, MN 55121–9650

5.11.6.5 (06-29-2001)
Federal Contractors

Use Form 668A(C)(DO) to levy payments owed to federal contractors. The levy has no continuing effect. It only reaches payments owed to the contractor when the levy is received.

The contract number must be included on levies sent to the Defense Department. If the number is known, include it on levies sent to other federal agencies, too. This can help them find the contract and honor the levy.
- Current federal contracts can be found on the Currency and Banking Retrieval System. Contract numbers are on the Federal Contract Information screen.
- Sources may also be found on IDRS using cc LEVYS. The contract number may appear on the levy source's name line after, "CONTRACT #." "FC" to the right of the number means this is a federal contract.
- See IRM 5.1, General Handbook.

See Exhibit 5.11.6–1 for contract levy addresses at several agencies.

5.11.6.6 (05-05-1998)
Levy on Other Government Payments

This contains instructions for levy on other government payments.

5.11.6.6.1 (06-29-2001)
Medicare Payments

Levy Medicare payments only in flagrant cases. Use Form 668A(C)(DO).
An insurance company is an intermediary or carrier contracting with Health Care Financing Administration (HCFA). The insurance company makes the Medicare payments. Serve the levy on this company, and send a copy to the HCFA Regional Office. See Document 6408 for the Regional Office addresses.
Payments are made directly to hospitals, home health agencies, and extended care facilities. Doctors and other medical services and supplies can be paid directly, too. However, the beneficiary may pay these and get reimbursed by Medicare, later.
The compliance territory manager or a second level Insolvency/ Technical Support manager must approve the notice of levy. See IRM 5.11.1.2.4.

5.11.6.6.2 (05-05-1998)
U.S. Savings Bonds—Series H Interest Payments

Series H savings bonds pay interest semi-annually.

To levy the interest, use Form 668W(C)(DO). See Document 6408 for the address to mail these levies. With the levy, send a copy of the lien. Also, send a letter with the levy. Include in the letter:
- bond series,
- serial number(s),
- bond denomination(s), and
- bond issue date(s).

5.11.6.6.3 (05-05-1998)
Agricultural Stabilization and Conservation Service (ACSC) Payments

Serve levies on ACSC county offices to attach these payments.

If	And	Then
The taxpayer is eligible for payment.	ACSC is authorized to pay the taxpayer.	A levy payment will be sent.
The taxpayer is eligible for payment.	ACSC is not authorized to pay the taxpayer, yet.	ACSC will complete the back of the levy, to say when and how much the taxpayer will get. When a payment is authorized, ACSC will send the amount the taxpayer was eligible for on the date of the levy. No new levy is needed.
The taxpayer is not eligible for payment.		ACSC will send the levy back saying no money is owed. If they know when the taxpayer will be eligible, they will say so. Then, another levy can be served, later.

5.11.6.6.4 (06-29-2001)
Relocation Act Payments

Relocation Act payments pay for displaced people's:
- moving costs,
- related expenses, and
- cost of replacement housing.

Levy these payments only in flagrant cases. The compliance territory manager or a second level Insolvency/Technical Support manager must approve the notice of levy. See IRM 5.11.1.2.4.

5.11.6.6.5 (05-05-1998)
Fees for Attorneys of Social Security Claimants

Records of attorneys for Social Security claimants are with the claimant's files. To levy an attorney's fees, attach a list of claimants' names and SSNs. If the SSNs are not known, give anything else to identify the claimant.

Example:

Include the claimants' address and date of birth, if these are known.

Avoid sending these levies without claimants' SSNs. SSA's files, like those of IRS, are very large. There are many people with the same name.

A separate levy is not needed for each claimant's fees.

5.11.6.6.6 (06-29-2001)
Restitution Payments for Japanese Internment in World War II

The Civil Liberties Act of 1988 authorizes payment to people of Japanese ancestry interned in World War II. Each eligible person may receive $20,000.
These payments are not exempt from levy. However, the payments are restitution for injustices that were done. Levy the payments only in flagrant cases.
Have the SB/SE Compliance Area Director approve the notice of levy. See IRM 5.11.1.2.4.

Note:

The Director of Compliance Services and the Director of Specialty Tax and Technical Support at Headquarters are also authorized to approve these notices

of levy.

5.11.6.6.7 (06-29-2001)
State Income Tax Refunds

In many states, computer tapes of IRS liabilities are matched with state refund tapes. The state tax agency sends payment with a list (or tape) of taxpayers whose refunds were taken.
Payments posted before 2000 used designated payment code (dpc) 04. Starting in 2000, these payments use dpc 20 for systemically applied payments and dpc 21 for manually applied payments. If the taxpayer says a state refund paid the amount owed, check IDRS for the payment. If it has not posted, ask for a copy of the state's letter showing the refund was taken. If the refund only pays part of the amount owed, collect the rest.
Correspondence letter 2167C on IDRS is used to respond to inquiries about these levies.

5.11.6.7 (05-05-1998)
Receivables

Receivables and other debts owed to the taxpayer can be levied.
A notice of levy reaches future payments, only if the taxpayer already has a right to them.
If receivables can be sold, consider seizing and selling them.

5.11.6.7.1 (05-05-1998)
Billing Services

Some taxpayers use billing services for receivables. The service may only prepare bills, or it may also receive payments.

If	Then
The billing service only prepares and sends bills.	Use a summons or Form 2270 to get records of the taxpayer's receivables, so they can be levied.
The billing service receives payments and forwards them to the taxpayer.	Serve a levy on the billing service.

Tapes may include records of many of the billing service's customers. Use a summons or Form 2270 to get only the taxpayer's records. The ten day response period for summonses may need to be extended to get the records extracted.

The billing service may deduct a fee and send the difference to the taxpayer. In this case, this is all the service needs to pay for the levy. If it normally sends the entire receivable to the taxpayer, then this should be paid in response to the levy.

5.11.6.8 (06-29-2001)
Securities—Stocks, Bonds, Mutual Funds, etc.

A person receiving a notice of levy may be holding a taxpayer's securities. The person may ask if the levy attaches these.

Example:

Stocks, Bonds, money market funds, mutual funds, debentures, etc.

The notice of levy attaches these. If you do not want these turned over, release the levy. If you want the securities or their cash value, either:

Ask the taxpayer to tell the person to sell the securities and satisfy the levy.
Have the third party ask the taxpayer to authorize this.

Note:

The taxpayer may have an incentive to do this. The securities will probably yield more money than if they are seized and sold. Also, the sale expenses are deducted from the proceeds. Weigh this against the cost of the third party selling the securities. For many mutual funds and money market funds, the third party charges no sale fees.

If the taxpayer will not authorize the sale, release the securities or seize and sell them. To seize the securities, either:

Tell the third party to send them. Then, seize them.
Arrange to meet the person who has the securities, so they can be seized.

Service Center Collection Branch (SCCB) sometimes receives securities for ACS levies. SCCB sends these to the territory office to decide what to do with them.

5.11.6.9 (06-29-2001)
United Nations (UN) Employees' Income

Legal processes can be served at the UN:
- with the Secretary General's approval
- in conditions the Secretary General approves.
Note:

This authority comes from a joint resolution of the 80th Congress.

Consider a levy on UN employees' salary only after all other sources have failed. Send the Form 668–W(C)(DO) from the SB/SE Compliance Area Director to the Director of Filing and Payment Compliance S:C:CP:FP at Headquarters. Include a memo that explains attempts to collect the tax and any other relevant information. See IRM 5.11.1.2.4.

Note:

The Director of Compliance Services and the Director of Specialty Tax and Technical Support at Headquarters can also approve sending a UN levy to the Director of Filing and Payment. Compliance.

Headquarters will forward the levy to the State Department.

Because of the restriction on legal process, the levy is used to counsel the employee.

5.11.6.10 (11-05-1999)
Mutilated Currency

Mutilated currency may be redeemed at the Department of Treasury. It can also be turned in to a bank which will send it to Treasury for redemption. This can be levied.
The fact that mutilated currency was turned in may be found out through routine investigation. Also, if the amount is $5000 or more, the Office of Currency Standards reports the request to IRS. Then, this may be reported to the area where the redemption was requested.
See Document 6408 for the address for these notices of levy.

5.11.6.11 (06-29-2001)
Levy on Non-Liable Spouse in a Community Property State

In some states, community property laws may mean that people who are liable for delinquent tax have a community property interest in their spouse's property and rights to property. In this case, the delinquent taxpayers' property rights in their spouses' property and rights to property might be subject to levy.

Example:

Taxpayers who are liable for delinquent tax may have a community property interest in their spouses' wages, so the wages of the spouse who is not liable for the tax might be subject to levy to pay it.

Community property laws vary from state to state. This may affect how much of a non-liable spouse's property can be attached by a levy. State law may have other effects, too. Contact Technical Support for advice on any special language or inserts/cover letters needed with the levy, unless local instructions have already been issued for how to handle these levies. Technical Support will consult with Associate Area Counsel, as needed.

5.11.6.11.1 (06-29-2001)
Wages & Salary

Although a non-liable spouse's wages or salary might be subject to levy, the levy does not have a continuous effect. This is because the Internal Revenue Code says that a levy on a taxpayer's wages and salary is continuous. However, in this case, the non-liable spouse's (not the taxpayer's) wages or salary is being levied.

Although a levy on a non-liable spouse's wages or salary is not continuous, the exempt amount can still be claimed.

However, because the levy might attach only part of the non-liable spouse's income, the portion that is not attached can be treated like an income source that is not being levied when the exempt amount is figured. See IRM 5.11.5.4.4.

Example:

A non-liable spouse's weekly take home pay is $600. Assume this person is in a state where a levy attaches half of a non-liable spouse's wages, and this is the only source of income that is levied. This means $300 is not attached by the levy. If this levy is served in 2001, and the person is filing jointly with two exemptions, $257.69 is exempt from levy. Since the exempt amount is less than the amount that is not levied, no exempt amount is subtracted from the $300 that the levy attaches. The employer should send a weekly check of $300. The $257.69 exempt amount has been accounted for by the other $300 that is not attached.

Example:

Take the same facts as the prior example, but the person claims four exemptions, so the weekly exempt amount is $369.23. Because this is more than the $300 that is not attached, the person needs to be allowed an additional exempt amount from the $300 that is attached. This is figured.
$369.23 Exempt from Levy
−$300.00 Not Attached by the Levy
$ 69.23 Additional Exempt Amount to be Allowed
The employer, then, figures:
$300.00 Attached by the Levy
−$ 69.23 Additional Exempt Amount
$230.77 Weekly Levy Proceeds

As a practical matter, in this example, a simpler explanation may be to tell the employer to send half of the person's take home pay if the exempt amount is less than half of that, but follow the instructions on the levy form if the exempt amount is more than half of the take home pay. This will lead to the same amount of levy proceeds:
$600.00 Take Home Pay
−$369.23 Exempt Amount
$230.77 Weekly Levy Proceeds

5.11.6.11.2 (06-29-2001)
Notice to the Non-Liable Spouse

When a taxpayer's community property interest in a non-liable spouse's property or right to property is levied, the notices in IRM 5.11.1.2.1 must have been sent to the taxpayer. However, do not send these notices to the non-liable spouse.

After serving the notice of levy, the non-liable spouse is notified of the levy same way the taxpayer is notified of a levy. See IRM 5.11.2.1.7.
1. If a Notice of Levy is served, e.g. on a bank account, a copy of the levy is sent to the taxpayer. Part 4 of Form 668A(c)(DO) is generally used for this. In this case, though, also send a photocopy of the taxpayer's copy of the levy to the non-liable spouse.
2. If a levy is served on wages, salary, or other income, the statement of exemptions and filing status notifies the taxpayer of the levy. Similarly, the non-liable spouse will get these copies of the levy to claim the exempt amount, and this is the notification that a levy has been served.

5.11.6.12 (06-29-2001)
Levy on Inheritances

If a taxpayer is due an inheritance, serve the notice of levy on the administrator/executor.

Exhibit 5.11.6-1 (06-29-2001)
Addresses often used for Levy on Federal Contracts

(Reference 5.11.6.5)

Administrative Conference of the U.S.

Administrative Conference of the U.S.

2120 L Street NW, Suite 500

Washington, DC 20037

Norma B. Smith, Administrative Officer,

Tel: 102–254–7020

Agency for International Development

320 Virginia Ave., Rm 1438

Washington, DC 20523–1424

Terry Payne, Chief OP/CIMS,

Tel: 703–875–0016

Agriculture, Department of

1400 Independence Ave. SW

Washington, DC 20250–9303

Maurice W. Thompson, Computer

Specialist, Tel: 202–720–3035

Air Force, Department of

Department of the Air Force (Headquarters

USAF)

SAF/AQCP, 1060 AF Pentagon

Washington, DC 20330–1060

Tel: 703–545–6700

Appalachian Regional Commission

1666 Connecticut Ave NW, Rm 730

Washington, DC 20235

Polly Law, Financial Manager,
Tel: 202–884–7730

Army

Commander

U.S. Army Finance & Accounting Center

Attn: FINCY

Indianapolis, IN 46249

Defense Logistics Agency

DFAS–CO–JXF; Attn: Director

P. O. Box 182317

Columbus, OH 43218–2317

Defense Mapping Agency

OUSD (A&T) DP/CPA, 3060 Defense

Pentagon

Washington, DC 20301–3060

Dir, CPA; Tel: 703–285–9370

Department of the Army

Exc Corps of Engineers Civil Program Fin

DFAS–IN–FV

8899 E. 56th Street

Indianapolis, IN 46249–0001

Dir, Vendor Pay

Department of the Army

Headquarters U.S. Army Material

Development and Readiness Command

5001 Eisenhower Ave.

Alexandria, VA 22333

Attn: DRCGC–S

USA MDW Finance & Accounting Office

Forrestal Bldg, Rm. GA270

1000 Independence Ave., S.W.

Washington, DC 20314

Attn: ANFINW–AAP

Army, Cont'd

Chief, U.S. Army Signal Finance and

Accounts Office

U.S. Army Strategic Communications

Command

Office of the Comptroller

Washington, DC 20315

Commerce, Department of

14th & E Sts. NW, Rm 6828

Washington, DC 20230

Howard Globerman, Program Analyst,

Tel: 202–282–2000

Commodity Futures Trading Commission

1155 21st Street NW

Washington, DC 20581

Denise M. Hanm, Contract Specialist,

Tel: 202–418–5164

Consumer Product Safety Commission

4330 East–West Highway, Rm 522A

Washington, DC 20207

Deborah P. Hodge, Director of Finance,

Tel: 301–504–0018

Corporation for National Service

1201 New York Ave NW, Room 7209

Washington, DC 20591

David Spevacek; Dir, Office of Financial

Management Services

Tel: 202–606–5000 ex 339

Education, Department of

7th & D Streets SW, Rm 3616

Washington, DC 20202

Jake Muscar, Supervisory Contract

Specialist, Tel: 202–708–8595

Energy, Department of

1000 Independence Ave SW

Washington, DC 20585–0001

Helen O. Sherman, Director Financial Pol., Tel: 202–586–4860

Environmental Protection Agency

401 M St SW, Mail Code 3303F

Washington, DC 20460

Ronald H. Bachand; Director, FSD; Tel: 202–260–5105

Equal Employment Opportunity Commission

Financial Management Div.

1801 L Street NW

Washington, DC 20507

James Israel, Claims Officer,
Tel: 202–633–4250

Federal Aviation Administration

Financial Systems Branch, ABA–320

800 Independence Ave SW

Washington, DC 20591

Morgan Baker, Systems Accountant,

Tel: 202–267–8999

Federal Communications Commission

1919 M Street NW #852

Washington, DC 20354

Andrew S. Fishel, Managing Director, Tel: 202–418–1919

Federal Election Commission

999 E Street NW, Rm 819

Washington, DC 20463–0001

Larry D. McCoy, Administrative Officer, Tel: 202–219–3570

Federal Emergency Management Agency

500 C Street SW

Washington, DC

Jon T. Wolz, Accounting Officer,

Tel: 202–646–3711

Federal Energy Regulatory Commission

888 1st Street NE, Room 42–73

Washington, DC 20426

Lawrence E. Carter, Supervisory

Accountant, Tel: 202–219–2910

Federal Labor Relations Authority

500 C Street SW, Room 225

Washington, DC 20424–0001

Andrew B. Chepega, Director Fin. Mgt.

Div.,: Tel: 202–482–6640

Federal Maritime Commission

800 North Capitol Street

Washington, DC 20573–0001

Michael H. Kilby; Director, Administrative

Services; Tel: 202–523–5900

Federal Mine Safety and Health Review Commission

1730 K Street NW, Room 640

Washington, DC 20006–3868

Regina M. Clark, Administrative Officer,

Tel: 202–653–5633

Federal Reserve System

Room M–1200, Mail Stop 152

20th & Constitution Ave NW

Washington, DC 20551

Dorothy Vereb, Superv. Accounts Payable,

Tel: 202–452–2312

Fish and Wildlife Service, U.S.

Department of the Interior

U.S. Fish and Wildlife Service

FWS MS2544–MIB

Washington, DC 20240

Howard H. Hulbert; Chief, Division of

Finance; Tel: 202–208–3100

General Accounting Office

U.S. General Accounting Office

Claims Division

Washington, DC 20548

General Services Administration