State Bank Levies — IRS Bank Levies
Getting hit with state or IRS bank levies of your bank account can be embarrassing, expensive and even disastrous. Bank levies can cause the loss of funds you need for ongoing living expenses, critical checks to bounce, and expensive bank service charges.
How is a Tax Levy different from a Tax Lien?
A tax levy is different from a tax lien. A tax levy is an actual legal seizure of your property to satisfy a tax debt.
A tax lien is a claim used as security for the tax debt.
The IRS give taxpayers plenty of notice before a bank levy
The IRS will not levy a bank account, wages or property until three requirements are met:
- IRS assessed a tax and sent the taxpayer a Notice and Demand for Payment.
- The taxpayer refused or neglected to pay the tax.
- The IRS sent the taxpayer a Final Notice of Intent to Levy and Notice of Your Right to a Hearing 30-days before the levy.
Bank Levies should be avoided at all costs
Both Wage Garnishment Levies and Bank Levies are generally the result of poor communication or no communication between the taxpayer and the IRS. San Diego Tax Resolution Lawyer Paul Staley understand that many taxpayers will collect the envelopes —unopened— in a growing stack until some future time when circumstances might improve. Unfortunately in those unopened and unread envelops are the warnings of an impending bank levy. Taxpayers often choose to ignore the IRS, but the IRS rarely ignores delinquent taxpayers. No matter a taxpayer’s current circumstances, a Tax Resolution Lawyer can often stop or minimize these awful IRS actions. If you are being threatened bank or wage levy, call us, we can help.
Key facts about IRS Bank Levies
- IRS bank levies are only valid for the one day — the levy is received by the bank.
- The bank is required to hold whatever amount is available in your account that day —up to the amount of the IRS levy— and then send those funds it to the IRS in 21-days.
- The typical IRS bank levy does not affect any future deposits made into your bank account. It is possible that the IRS will issue another Bank Levy if the first one came up empty or short of the tax owed.
What can you do if your bank account was levied?
First, remember that an IRS bank levy is not an open-ended action that sucks up every dollar you or your employer might deposit into your bank account. The common IRS bank levy is a one time only —day the bank receives the request— deduction of funds up to the amount of tax owed from your bank account. You can read more about the laws in the Internal Revenue Manual 188.8.131.52.
Additionally, federal tax law gives the taxpayer a 21-day window to petition the taxing agency to resend the levy and have the funds being held by the bank for three weeks released back to the taxpayer’s account before the 21st day when the bank is to forward the levied funds to the IRS. This 21-day waiting period, mandated by Internal Revenue Code 6332(c), provides an opportunity for your tax resolution lawyer to contact the IRS and negotiate a release of the levy so that the money being held in trust will be returned to your account.
Get some help —Make that call!
San Diego Tax Resolution Lawyer Paul Staley provides a no-obligation, confidential consultation and has appointments available for evenings and weekends. We accept all major credit cards and can make other payment arrangements so that we can help you get your tax problems straightened out without adding additional layers of financial burden on you and your family. To talk to Paul or to schedule a free consultation call (619) 235-9645.