IRS Bank Levy

How does an IRS Bank Levy work?

A Bank Levy is an aggressive collection action taken by the IRS resulting from unpaid taxes. The IRS only sends a Bank Levy after several previous attempts to make contact with you to resolve your tax debt liability. If no contact is made by you or if negotiations have stalled, the IRS will often use the Bank Levy to get your attention so that you will make arrangements to resolve your back taxes.

IRS Bank Levies

First Look At How The IRS Levies Your Bank Account

Once an IRS bank levy hits a taxpayer’s account, the bank is required by the IRS to hold the seized funds for 21 days. During the 21 day holding period, no funds may be deposited or withdrawn from the levied bank account until arrangements have been made with the IRS.

Understanding The 21 Day Holding Period

The reason the IRS allows the 21 day holding period is to give the taxpayer ample opportunity to contact the IRS and either Full Pay their balance, establish an installment agreement, or prove to the IRS that seizure of the assets in the levied bank account would put the taxpayer under financial hardship where they could not meet their financial requirements for necessary living expenses.

Consquence Of Not Responding To The IRS In 21 Days

If the 21 day period passes with no contact and no arrangements made between the taxpayer and the IRS, the bank will then send the funds to the IRS at which point it is nearly impossible to have the money returned. It is much easier to release a bank levy than to try and recover the funds once they have been sent to the IRS.

Bany Levy Is A One Time Action, Don’t Panic

A Bank Levy is Not Continuous and you are able to resume normal banking deposits and withdrawals once the money is sent to the IRS or the Bank Levy is Released. The IRS can technically levy a bank account as many times as they want but it is usually designed as a one time action to get your attention.

How J. David Tax Relief Can Help You Deal With IRS Bank Levy

If you have been hit with an IRS Bank Levy it is important to act quickly if you want to have the bank levy released. You can contact the IRS directly or you can hire a Tax Attorney to help you stand up for your rights as a taxpayer and negotiate on your behalf. Call us for a free consultation within 21 days of receiving your bank levy so we can have it released before it is sent to the IRS.