IRS Form 668-W — The Continuous Levy That Can Seize One’s Salary, Wages, Bonuses, Commissions, Pension and Retirement Income

The IRS has the power to issue a one-time levy of bank accounts and accounts receivable. They can seize anything in an account at the time of the levy filing. That is different than what happens when IRS Form 668-W is issued, which is a continuous levy on salaries, wages, pension or retirement income. This includes things like fees, bonuses, commissions  and commissions of real estate agents.  

The levy will continue over multiple periods. Examples of ways to stop the levy include payment in full, a collection alternative agreement entered into with the IRS, statute of limitations expiration and economic hardship among others. 

There are exemptions from levy of income based on filing status, number of dependents, and pay frequency. Additional exemptions are available for seniors and the blind.  

Certain types of income are exempt from levy entirely. Unemployment compensation benefits, certain annuity and pension payments under the Railroad Retirement Act, certain benefits under the Railroad Unemployment Insurance Act, Medal of Honor pension payments, annuities under certain military retirement provisions and certain workers' compensation payments. 

Supplemental Security Income (SSI) payments are exempt from levy under IRC Section 6334(a)(11), as these are public assistance payments. Social Security Disability Insurance (SSDI) and old-age Social Security (OASDI) payments are not exempt by statute, though the IRS exercises administrative discretion and limits the Federal Payment Levy Program to 15% of those benefits under IRC Section 6331(h). 

Form 668-W is far more than an administrative form — it is the mechanism through which the IRS exercises one of its most potent collection powers, seizing the very income taxpayers rely on to fund their routine expenses.