Increase Tax Withholding to 100 Percent for Internal Revenue Service (IRS) Federal Payment Levy Program (FPLP)

If a provider owes back taxes to the IRS and those taxes are eligible to be withheld from payments due from Medicare, the withhold rate will increase from the current 30 percent to 100 percent on October 16, 2015. In July 2000, the IRS, in conjunction with the Department of the Treasury, started the Federal Payment Levy Program (FPLP) which is authorized by Internal Revenue Code Section 6331 (h). Through the FPLP, authority is provided to CMS to collect overdue taxes through a levy on certain federal payments. This includes federal payments made to providers, contractors and vendors doing business with the government.

Source: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1536OTN.pdf