I owe the IRS a sum of money declared “non-collectible” in 2020.

I began collecting social security benefits in 2018 when I was 65. In 2020, after the taxes were declared non-collectible, I received a bill from social security for $3428.

Was this based on my increased income (IRA withdrawal) for that year or because I owe the IRS money?

Hi. I doubt if it's either of those things. IRA withdrawals would have no effect on your Social Security benefits, and if the IRS wanted to collect a tax obligation from your Social Security benefits the tax would be collected by withholding part of your benefit payment. Social Security wouldn't send you a bill for the purpose of collecting past due taxes. The law allows the IRS to assess/withhold up to 15% of a person's monthly Social Security benefit payment in order to collect a tax debt.

If the notice/bill you received from Social Security doesn't explain why you owe them money, then you'll likely need to call them for an explanation.

Best, Jerry