Can VA disability payments be levied by the IRS?

There is a federal statute that generally protects VA disability income from attachment, levy or seizure.  However, in a recent federal case from Colorado, the judge ruled that this statute does not apply to levies issued by the IRS so long as the IRS is attempting to collect delinquent federal taxes from the disabled person.  If this levy has caused you a hardship, you can appeal to have the levy released based on that hardship.

A similar situation arises for Social Security benefits.  They can be levied under certain circumstances and they may be taxable as income, depending on the total amount of income the taxpayer receives from other sources.