We received an IRS levy for a vendor. When we forward payments due the vendor to the IRS, do we still take the discount we would have taken under normal circumstances?

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In the case of a continuing levy, you will send a portion of each payment to the IRS rather than to the vendor.  This does not affect the amount your vendor bills you, and should not affect any early payment discount offered or taken. The levy does not have anything to do with the transaction other than to require you to send a percentage of whatever payment you owe the vendor to the IRS rather than to the vendor.

We asked IRS information reporting specialist Ms. Hord (ID# 1002444774), who found a passage in the code about continuous levies that says the levy continues until the full amount is garnisheed, from which she concluded that the levy does not affect your ability to take the discount.

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