What is the Federal Payment Levy Program (FPLP)?
The Federal Payment Levy Program (FPLP) gives the IRS the right to seize a portion of certain payments you receive from the government. If you are a federal employee, a government contractor, or receiving Social Security benefits, your payments could be offset under the FPLP.
Payments Covered By The FPLP
Any of the following payments can be offset under the FPLP:
- Federal employee salaries
- Federal employee retirement annuities
- Certain Social Security benefits
- Railroad retirement benefits
- Military retirement payments
- Medicare provider and supplier payments
- Federal payments made to you as a contractor or vendor doing business with the government
Only Social Security retirement and survivors’ benefits are subject to the FPLP, not disability benefits or Supplement Security Income.
How The Levy Works
Understanding Foreign Asset Reporting
US tax code can be very confusing. This is especially true when it comes to reporting foreign assets. The IRS has a number of complex regulations regarding foreign assets and how they are reported, any of which can cause headaches for those filing. To give you some insight into the FBAR and other relevant forms, here is Ayar Law’s guide to foreign asset reporting requirements.
Foreign Asset Reporting Forms
The Internal Revenue Service has a variety of forms when it regards foreign asset reporting. The most common of these forms are:
- Form 3520 – Foreign Trust and Gifts
- Form 3520-A – US Owner of a Foreign Trust
- Form 5471 – Foreign Corporation
- Form 8865 – Foreign Partnership
- Form 8621 – Passive Foreign Investment Company
- Form 8938 – Specified Foreign Assets
- FBAR – Report of Foreign Bank and Financial Accounts (also known as FinCen 114)
Contrary to popular belief, there is nothing inherently threatening or sinister about an IRS audit. During the audit, the agency will simply double-check your numbers to ensure that there are no discrepancies in your tax returns. Therefore, if you are truthful and conscientious, you do not have to worry.
At times audits are completely random; however, the IRS usually selects taxpayers on the basis of suspicious or unscrupulous activity. As a rule of thumb, it is better to avoid subterfuge. If you are worried about being audited by the IRS this tax season, the following are some red flags that may land you in the hot seat.
Errors and Omissions
It is true that mistakes often happen in life. That being said, when you are filing your tax return, you must play close attention to all details, and be meticulous. It is likely that if you make simple mathematical errors, they will be noticed by the agency, which can lead to your tax return being audited.