P604 Lifting IRS Garnishments and VA Overpayments

Program	Manual Section
All programs	MA604E

Procedures

Give customers the following information when their income is being garnished by the IRS, Veterans Administration, Social Security Administration, or there is any other court-ordered garnishment against their income.

1) IRS Garnishments

When the customer wants to stop an IRS garnishment, ask the customer to take the following actions:

Step	Action
1	Obtain an IRS Power of Attorney form (Form 2848) by either calling the IRS at 1-800-829-4477 or by downloading the form the IRS website http://www.irs.gov/.
2	Complete the form and send the completed form to: IRS 1973 N. Rulon White Boulevard M/S 6737 Ogden, Utah 84401 NOTE IRS will assign the form a number upon receipt.
3	After the POA form (2848) is sent to the IRS, call the IRS collections Bureau at 1-800-829-7650 to negotiate the garnishment. The customer’s Social Security number will be asked for during the call. NOTE If the IRS does not have the POA form 2848 in their system, the caller will have to fax a copy to IRS representative in order to proceed.
4	Ask the IRS representative to have a “Clearly Not Collectible" (CNC) decision granted based on the fact the customer is on Medicaid and must pay a share of cost to the nursing facility or risk possible eviction; and Explain that Medicaid law and legislation do not permit AHCCCS to deduct garnishment in determining eligibility or the amount a customer must pay towards the cost of their care.

NOTE The IRS representative may be able to make a decision during the call or shortly thereafter.

Under this procedure the IRS debt is not cancelled, but the garnishment is lifted. The debt continues to accrue interest but unless the customer’s financial situation improves, the garnishment will remain lifted.

2) Lifting VA Overpayments or Garnishments

Veterans Administration benefits may be reduced to recover a previous overpayment. VA may also garnish a person’s other income, such as Social Security benefits, to recover a VA overpayment when the person is not currently eligible for VA benefits.

There are two ways to have the overpayment or garnishment removed:

The customer can appeal the VA determination that an overpayment occurred; or
The customer can request that the VA waive the overpayment (similar to an undue hardship request).

NOTE The customer must request the elimination of the overpayment or lifting of the garnishment of the date of the letter that notified the customer of the overpayment or the opportunity to do so is lost.

3) Social Security Garnishments

Overpayments:

The customer may take following action to request a waiver or appeal the overpayment:

If the customer...	Then the customer...
Disagrees with the overpayment amount or decision	Can file SSA Form 561, "Request for Reconsideration" or call the SSA office to file an appeal by phone. Has 60 days from the date of the Notice of Overpayment to file a Request for Reconsideration unless they show “good cause”. NOTE Overpayments made between March 1,2020 and September 30, 2020, may be waived when SSA did not process an action due to the COVID-19 pandemic.
Agrees with the overpayment amount and decision but feels that it was not their fault	Can complete form SSA 632 “Request for Waiver of Overpayment Recovery”. A waiver can be filed at any time.
Agrees with the decision and can arrange a repayment plan	Can call SSA to arrange payments.
Requested a waiver and disagrees with the decision from the request	Can file a Request for Reconsideration either online or by phone as described in the SSA denial letter.
Disagrees with a denial for a reconsideration of a waiver	Can request a hearing with an Administrative Law Judge. The request for hearing must be done within 60 days of the SSA denial letter.

Court Ordered Garnishments:

Court-ordered garnishments may include, but are not limited to, student loans, child support arrears and medical bills. The customer must request the garnishment to be stopped by the court or the agency that requested the court order.

NOTE SSA will need a court order to stop the garnishment.