October 25, 2017

Warren, Tillis Urge IRS to Stop Lower-Income Military Retirees from Losing Benefits

"There is no rational basis" for Distinction between Treatment of Low-Income Military Retirement Benefits and Social Security Benefits

Text of the letter available here (PDF)

Washington, DC - United States Senators Elizabeth Warren (D-Mass.) and Thom Tillis (R-N.C.) today sent a letter to the Internal Revenue Service (IRS) Commissioner, John Koskinen, to urge the IRS to reconsider a recent decision that will cause lower-income military retirees to lose federal benefits.  The senators explained that "the IRS recently expanded its application of the Federal Payment Levy Program (FPLP) to include military payments," which means that the IRS can now "impose a levy on retirement payments to veterans in an effort to recoup back taxes."

The Internal Revenue Code allows the IRS "to release a levy if it determines the levy is ‘creating an economic hardship due to the financial condition of the taxpayer.'" The IRS uses a "low-income filter" to screen out taxpayers who are exceedingly likely to suffer economic hardship from a levy - allowing those taxpayers to continue receiving their full Social Security benefits.  However, the IRS has not applied that low-income filter to military retirement benefits.  The senators argued that the low-income filter should be used for low-income Americans receiving military retirement benefits - the same way it is currently used to relieve low-income Americans on Social Security - so that lower-income military retirees are not needlessly denied critical benefits.  

"Surely our military retirees - most of whom have spent more than 20 years serving their country - should receive the same level of protection for their hard-earned retirement benefits that others receive for their Social Security benefits," the senators wrote.  "We urge you to promptly reconsider your decision to not apply the low-income filter to military retirees.  After all that our veterans have sacrificed for us, they should not lose access to retirement benefits unnecessarily. "