You’ve just come from the bank and have found out that you have a levy on your account. This would be a catastrophic situation. You’ve probably already realized what kind of trouble this will make in your and your family?s life. “What should I do now?” you wonder.
The IRS would put a levy on your account for several reasons. Some of these reasons are:
- Unpaid taxes
- You have unfiled tax returns
- Unserved IRS notices due to change of location
- Defaulted installment deal
By not settling your taxes, the IRS punishes you with a bank account levy. The IRS can take all your funds by serving a Notice of Levy to your bank attached to your account. You won’t be able to use the funds in your account until the IRS releases the levy. It’ll be twenty-one days starting on the date of the levy before the bank can release your money to the IRS. Negotiations can be made with the IRS during this timeframe, so move fast.
Release of a Bank Account Levy
The release of a levy isn’t an easy task, especially when it involves bank accounts. Any of the following will have to occur:
- Pay the taxes in full, make the offer in compromise, or file for bankruptcy
- Prove that the statute of limitations for collections is expired if 10 years have elapsed from the date of assessment.
- Prove to the IRS that the taxes can be collected if the levy is released.
- An installment agreement
- Prove that the levy will bring financial hardship.
- The money is more than what you owe to the IRS.
Find out how to qualify in any of these categories. Contact the IRS officer who signed the levy notice. Make an appointment with the manager if it’s not possible. You may make arrangements to settle your taxes, give the necessary information, or request for an appeal.