A version of this column written by money expert Lynn Brenner appeared in Newsday, Oct. 12, 2008.
I owe the government some money. If I elect to start to receive my Social Security benefit, will I get the check, or will the Internal Revenue Service take it to pay down my debt?-- SA via e-mail
Dear SA: The IRS is one of the few creditors that can seize part of your Social Security benefit. Your benefit can also be garnished to cover unpaid child support and alimony, but that's about it. Not to worry, though. You're not even close to that calamity.
First, a general word of reassurance. Social Security is protected from virtually all creditors, including credit card issuers, mortgage lenders, auto loan companies and collection agencies.
In fact, it's illegal for creditors even to threaten that they may seize your Social Security benefits, says John Ventura, a bankruptcy attorney and the author of "Stop Debt Collectors" (2008, Credit.com), an extremely useful little book that offers a wealth of practical advice and provides sample letters to send to debt collectors, including one stating that your Social Security income is legally protected.
Unpaid taxes are in a special category. The IRS has the option of levying up to 15 percent of a monthly Social Security benefit until your back taxes are paid. But that's a last resort and it doesn't happen without plenty of warning and a formal legal process. The Social Security Administration garnishes benefits in response to a court order, says Jane Zanca, an agency spokeswoman: "We have to be notified that there's an appropriate levy. "
You should contact the IRS and arrange to make monthly installment payments. Taxpayers who owe less than $25,000 can set up an installment agreement through an online application at irs.gov.