IRS Bank Levy
Waking up to a hold on your accounts can cause disruption, surprise, and panic leaving you with a feeling of hopelessness. The IRS can seize every last dime with a notice sent right to your bank. You may not even notice until your check has bounced or an employee is unable to cash their paycheck.
What is a Levy?
An IRS or State Bank Levy is a legal seizure of property to satisfy your debts. If you have refused to pay the debt, set-up a payment plan, or have not responded to the IRS’s correspondence, the taxing authorities have the power to enforce a wage garnishment or a bank levy. This is done in order to seize the funds in your account to pay off the taxes owed to the IRS. The process begins when the IRS sends a Notice and Demand for Payment, which notifies that you owe a certain amount of federal back taxes. From this point on you have only 21 days before the bank turns over those funds to the IRS.
Engage with the IRS before this issue becomes bad. Check with the professionals at Allied Tax Advisory to see if you can work out an Installment Agreement, Offer in Compromise, or we will personally engage with the IRS representative to discuss the problem. A good tax professional like Allied Tax Advisory can not only help solve this tax problem but also work out a concession on the part of the IRS to release the levy as part of the resolution. With a levy on your bank account, paying bills may be nearly impossible.
If You Have Been Hit With a Bank Account Levy
If you have been hit with a bank account levy, the IRS is most likely trying to get your attention because it has become an ongoing issue. If you are delinquent with business tax returns, personal income taxes, quarterly self-employment tax payments, or your business is delinquent with federal payroll tax deposits, these could all lead to a bank levy to satisfy your debts.
A bank levy sent to your bank by the IRS will request a freeze on all assets so the money can be placed toward your principle balance. The bank is required to cooperate with IRS levies and will have serious penalization for failure to do so, no matter how long you have been with your bank they cannot prevent the IRS from issuing a levy. It is completely out of their control.
A levy can cause a lot of worry and stress, but the tax professionals at Allied Tax Advisory Group can help. There is a 21-day window of opportunity to intervene and stop the levy from tying up the funds in your account, so we must act fast. A good professional can often prevent levies from being issued in the first place or at least be able to warn if you are in high risk for a levy. Other reasons why it is most beneficial to contact a professional first include: being a business taxpayer, needing time to prepare and file back taxes, receiving a Final Notice of Intent to Levy, and having a history of unpaid taxes or unfiled returns.
Ten Steps to Avoid A Levy
- Request an extension.
- Negotiate an Installment Agreement
- Prepare an Offer in Compromise
- Demonstrate Non-Collectible Status
- File for Innocent Spouse Relief
- Appeal the Notice of Bank Levy
- Consult a professional tax expert to learn practical solutions when receiving the notice of intent. You have approximately 21 days to respond to the notice.
If A Levy Has Hit Your Bank
If a levy has already hit your bank account, determine how much money is being held by your bank. This can be found on your online bank statement. This written documentation regarding amount held is crucial for securing a release of your funds. The bank required to hold your levied funds for 21 days before releasing them to the IRS. This gives you 21 days to figure out how much you need for paying bills, invoices, and or any other documentation to gather proof of expenses that must be paid to keep your business running or your personal needs. The second thing that must be done is empty any bank accounts you own that have not been levied.
An IRS bank levy can be a dark umbrella to be under. Let Allied Tax Advisory show you the light by presenting the right strategy to overturn the levy.
To find out more about bank and wage levy release, contact the expert CPA’s and Tax Attorneys at Allied Tax Group today!