House wants to be clear: IRS can levy your TSP funds

Rep. Ann Marie Buerkle, R-N.Y. Rep. Ann Marie Buerkle, R-N.Y. House Committee on Oversight and Government Reform

The House passed legislation this week that clarifies an existing law allowing the Internal Revenue Service to levy funds in Thrift Savings Plan accounts.

The legislation, sponsored by Rep. Ann Marie Buerkle, R-N.Y., clarifies that TSP accounts are subject to a law that allows the IRS to collect unpaid federal taxes by levy -- the process of ordering a third party to turn over property that belongs to taxpayers who have unpaid tax liability.

Another law -- the 1986 Federal Employees Retirement System Act -- protects some assets in Thrift Savings Plan accounts from levy. The Federal Retirement Thrift Investment Board, which oversees the TSP, previously had asked lawmakers for clarification due to the protections offered under the 1986 law. Lawmakers told the board that the IRS does have the authority to levy the TSP funds of civil servants. The legislation passed this week clarifies that.

The bill would net the government an additional $24 million in revenue from 2013 to 2022 if passed into law, according to a recent Congressional Budget Office estimate.

“I believe that any savings Congress can produce in today’s fiscal environment is significant. This is a common-sense solution,” Buerkle said.

The House also agreed to an amendment authored by Rep. Elijah Cummings, D-Md., that requires any revenue from the enactment of the bill be put toward deficit reduction.

A 2010 Justice Department opinion also ruled that TSP accounts are subject to federal tax levies.

The bill, which passed in a bipartisan vote of 414-6, “ensures that federal TSP accounts and private sector 401(k) plans receive equal treatment in the area of tax administration and enforcement,” said Rep. Carolyn Maloney, D-N.Y., during floor debate.

The measure also was included in the version of the Senate surface transportation bill passed in March.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.