Government can and will place a levy on your Medicare pay if you owe taxes

IRS to Garnish Medicare Reimbursements for Unpaid Taxes

If you owe back taxes, expect the IRS to come calling in non-traditional ways -- in fact, they might just garnish some of your Medicare reimbursement until you’ve paid back what you owe. According to CMS Transmittal 368 businesses that owe tax money to the IRS may face levies.

CMS may reduce federal payments subject to the levy by 15 percent, or the exact amount of the tax owed if it is less than 15 percent of the payment,” the transmittal indicates. The levy is continuous until the overdue taxes are paid in full, or other arrangements are made to satisfy the debt. So if you owe back taxes, the IRS will arrange to take 15 percent of your Medicare reimbursements until your levy has been satisfied.

If the government has garnished part of your Medicare reimbursement, you’ll see the code “WU” in the PLB03-1 data field, along with Medicare’s phone number in case you have questions about the adjustment.

To read the complete CMS transmittal, visit the CMS Web site online at

www.cms.hhs.gov/transmittals/downloads/R367OTN.pdf.

To review the related MLN Matters article, visit the CMS Web site at

www.cms.hhs.gov/MLNMattersArticles/downloads/MM6125.pdf.