- March 6, 2020
- Posted by: blogtester
- Category: Bank Levy
Sometimes, you can get behind on your taxes and end up owing a large amount of money to the Internal Revenue Service or the IRS. This debt can have a huge impact on your financial stability. The IRS is a federal agency that doesn’t need court orders for requesting a levy bank. In this guide, we will let you know about all the steps involved in the bank levy process. Bank levies are an extremely common method used by the IRS for recouping the money you owe them.
Here are the steps involved in the levy bank process:
- The IRS will try to contact you before issuing a levy on your account for collecting the unpaid amount.
- The bank will put a levy on your account for 21 days. This means that you cannot send or take out any money.
- During this period, you can contact the IRS and settle on a tax resolution method using tax resolution services by the experts.
The whole process is fairly simple. It also works the same for other creditors as well. For example, you borrowed some money from a creditor a few months ago and haven’t made any payment for quite some time. If you are not paying your creditor back, they can get frustrated. They will take this to the court seeking a legal judgment against you. If the court decided to make a judgment in the favor of the creditor, they can request your bank to put a levy on your account. Once the bank receives the request, It will have to freeze your bank account immediately after they have received the request for the levy.
You will not even receive a notice regarding the fact that your funds will be frozen. This policy has been put in place to stop people, who are facing a levy, from taking all their money out from your account. After your account has been frozen, the bank will be reviewing your funds. They will give the owed amount to the creditor.
Bank Levies and Funds
The process of levy on bank accounts is complicated. One of the major complications is that the bank account might have funds exempted from levies. If you think there is a chance that the IRS will be levying your bank account, you can protect your money by separating the exempt funds from the non-exempt ones. Here are a few things to look out for:
- he funds received from the government are the most common funds exempt from levies. Social Security payments are an example of such funds.
- In certain circumstances, child support or alimony payments can also be exempted from a bank levy.
- During a levy on bank account, you can protect your worker’s compensation payments. Also, if you have retirement funds in your account received from a pension plan or annuity, you can protect them from a bank levy.
Disputing your tax levy
You will have one chance to dispute the levy on bank accounts. Even if you don’t win, you might be successful in delaying the levy for a short time. It might also reduce the amount you have to pay back to your creditor. If you don’t take any action after your bank levies, it might increase the situation’s seriousness.
For example, if you don’t challenge the levy, the bank can empty your account completely. This means that you will be left with absolutely no amount for covering your basic expenses. Also, you will not be able to pay the fee to the bank for handling the levy. So, you have to take advantage of this opportunity and try to decrease the impact of this circumstance.
Stopping the IRS levy bank account
When you are facing a bank levy, it is common to feel powerless. But you are not. There are several ways in which you can stop the levy on a bank account or at least limit its impact. Here are some of them:
- The easiest way of stopping the IRS bank levy account is to just pay back what you owe. Now, this might not be a suitable or even possible option for some people. However, if you have enough money to cover your taxes without causing financial hardship, you should consider this option strongly.
- If you want to pay back to the IRS and don’t have the money to do, you can request for an IRS payment plan. IRS wants its money back. For this, it is willing to make monthly payments and help people in meeting their tax obligations.
- In some cases, you can claim financial hardship for ending the IRS bank levies. Through this method, you will be putting in a request for the IRS to decide on whether it should collect back taxes or not. This depends on your financial situation.
- You can request the IRS for an offer in compromise. Through this, you will be paying a reduced amount back to the IRS.
- Declaring bankruptcy – This is a temporary solution to stop bank levies. Once the bankruptcy is granted, you will have time for getting your finances in order. However, the IRS will still be able to put another levy in the future.
Dealing with the bank levy account is difficult, especially when you are up against the IRS. You won’t have access to your money in the bank account until they release the levy. This can affect your financial situations in other ways as well. For example, any checks that you might have written may bounce. Also, any automatically drafted payments might fail to clear. This will prevent you from paying your bills. If you think that the IRS might take the collection action of levy against you, you need to act as decisively and quickly as possible.
Now that you know about the levy bank account process, you will be better prepared to deal with this. However, it is best that you hire a professional tax resolution services to help you with this. Platinum Tax Defenders offers such tax resolution services that have been helping taxpayers with bank levy since 2011. Our tax relief experts can help guide you through the whole bank levy process. So, for a free consultation, book an appointment with the Platinum Tax Defenders today!