CCA 201302029: Advice on levying future Medicare provider payments

Plain-English summary

Chief Counsel Advice addresses levies on future payments under contracts with Medicare providers. It distinguishes those payments from Social Security payments because the provider has not yet performed the services that will generate the payments. The advice states that a levy on those future contract payments would not be a continuing levy under section 6331(a), based on the facts described. It says a continuing wage levy under section 6331(e) could depend on whether the payments are wages or salary and on the provider's legal form. The advice also notes that IRS procedures call for paper levies on Medicare providers.

Ruling snapshot

• Question: Can a levy on future payments under a Medicare provider contract be treated as a continuing levy?
• Outcome: Advice given.
• Key authorities: IRC §§ 6331(a) and 6331(e); IRM 5.11.6.6.2.

Full text (IRS public release)

ID: CCA_2012101311073620 Number: 201302029
Release Date: 1/11/2013
Office: -------------
UILC: 6331.00-00, 6331.33-00

From: --------------------
Sent: Saturday, October 13, 2012 11:07:55 AM
To: --------------------
Cc:
Subject: RE: Cont Levy

Hi, ----- --

To recap, earlier this week, to answer your question re: levies on contract payments to Medicare providers, I responded:

There is a contract. But it is a contract for services that have yet to be performed, if I understand the situation. In other words. it's not installment payments for services already provided to patients--it's a levy on future payments for services to be performed in the future. The big difference between SS payments and this situation is that the SS payee, unlike the doctor or whoever, has done everything she/he needs to do to get the payments. So I'm thinking there would be a fixed and determinable problem in your situation, and that it would not be a section 6331(a) levy of continuing effect.

As an aside to the question you asked, I mentioned that I would follow up re whether a continuous levy under 6331(e) is a viable option in the Medicare provider contract for services situation. The answer is, it would depend. It requires fact-specific determinations, such as whether the payments can be properly characterized as wages/salary and whether the payments are due to an individual/sole proprietor, corporation, LLC or other entity. Therefore, whether to use a continuing wage levy under section 6331(e) would require a case-by-case decision. In any case, this is a hypothetical matter because, as you know, IRM 5.11.6.6.2, which covers levies on Medicare providers, provides that paper levies are issued on Form 668-A.

If you would like to discuss this further, please call or email me.