My Dad has a previous year of unpaid taxes. How to proceed and respond to levy and garnishment by IRS?

They will be glad to help you sort it out, but if it has reached the point of levy and garnish, it must be more than one year. His POA should be looking after this. If he has dementia, yes, get proof of that from an MD, along with proof that you are appointed to represent him. Without that, it's like HIPAA, they won't talk to you.