The What, When, Why and How of IRS Bank Levy
- November 11, 2019
- Posted by: asal
- Category: Tax Resolution
Possibly a truth, the last letter that you would want to receive this year is the final notice of tax debts from the Internal Revenue Service (IRS). Tax liability is, perhaps, the most challenging debt to carry on your back. With IRS being a tough creditor, you might just wake up one day with seized or frozen assets. It is possible when the agency would use one of the most potent collection tools in its toolbox – the IRS bank levy.
Not until you checked your account, you might not even notice when the IRS placed a bank levy against you. They often use levies to make sure they get the money you owe without the need to take it to court. Once the bank freezes your account, IRS would give you 21 dreadful days to settle your tax issue. If you keep on hiding from your debts within the said grace period. the bank would immediately transfer your funds to the agency. And this can happen over and over again and might get worse until you settle your tax debts.
The involvement of money is the reason why the IRS can be very strict with dues and deadlines. Thus, if you have found your account frozen, then you need to act immediately. Knowing how bank levy works and how it can impact you and your assets is a significant first step to settling them. But, of course, that won’t be enough. In these critical situations, an aid from someone knowledgeable of the IRS tax game is essential.
Qualified tax resolution experts like the Platinum Tax Defender are best to call for an IRS bank levy help in Los Angeles, California.
But to prepare you for your tax battle, you have to gear yourself with answers to the most common queries related to IRS bank levy.
For the first one that you might surely have in mind, yet it is possible to prevent or stop a bank levy. Read on to know what, when, why, and how.
What Should I Expect From An IRS Bank Levy?
‘Don’t panic’ could be a great tip to someone experiencing an IRS Bank Levy. If you owe something to the IRS or whichever tax authority, a bank levy is always possible. However, you have to take note that a levy is the “last weapon” of the revenue service. Meaning, you, perhaps, chose to ignore the heaps of notices that they’ve given. In fact, you let go of your chances to prevent the levy in the first place.
If you claim to have IRS tax debts, you may need to check your mail regularly. Constant communication with them can help you stay abreast of possible changes and settlements. However, receiving your Final Notice of Intent to Levy should be your signal to immediate action. This notice is a warning that the IRS might start its way of levying your bank account and seizing your property to cover your tax obligations. At this particular point, you would need to contact the agency or get all the help you can gather as soon as possible.
But, When Exactly Can IRS Levy an Account?
A bank levy cannot happen or appear out of the blue. After the 30-day grace period and they receive no response, the IRS would start to choose which type of levy to issue. It can be a bank account or a wage garnishment. Then, they’ll send your bank a Notice of Levy on Wages, Salary, and Other Income or Form 668-A(C). As soon as they received it, they can freeze your account at any moment.
By law, before the IRS issue, you’re a levy, the following factors must take into consideration:
- They evaluated that you do have a tax liability and that it is rightful to send a “Notice and Demand for Payment.”
- They gathered proof that you are ignoring their notice. To them, this negligence is a sign that you are unwilling to pay your due taxes. There is no exact time that you might receive the IRS notices. but the final one usually comes after at least two years of the whole sending period.
- They sent the final notice, which states their intention of freezing your account to get back to your tax bill. Unless you take a step in dealing with the IRS within 30 days, the IRS would proceed to levy your account.
- You’ll get an instant bank levy release if you prove that there are errors or that the IRS didn’t comply with the collection standards. But, if you claim to have tax debts and your account is already frozen, you have 21 days to settle everything. Failing to do so, the 22nd day might mean transferring your funds to the IRS. And that is what tax resolution experts would want to prevent from happening.
Why Is IRS Bank Levy More Than Bank Levy?
Apart from the money in your account, the IRS proves they’re powerful with its capacity to take your federal income tax refund. The confiscation includes your pension, travel payments, and reimbursements. In some instances, they also put levy to taxpayer’s Social Security benefits as well as state tax refunds.
An IRS bank levy is not continuous on your account. If you were able to settle the levy, you could again use your account to pay bills and make transactions. However, the IRS could send a brand new bank levy to get back at your unpaid tax debts.
How Can I Prevent/Release an IRS Bank Levy?
Before being miserable, know that an IRS bank levy is not a hopeless case. There are chances and methods you can take to obtain bank levy release or limit what it can do to your assets. If you cannot prove that the levy is unfair, you can still prevent it from applying the legal approaches below:
Pay Your Tax Debt in Full
Paying your tax debts in full could be the fastest way of stopping and preventing an IRS bank levy. However, the fact that you weren’t able to settle your tax dues, you might find it hard to settle a full payment. If in tax trouble, you can speak with the IRS and see if there are possible settlements you can take. On the other way, if you are capable of settling the whole amount, including penalties, the IRS would immediately release your levy.
Request a Collection Due Process Hearings
On the 30-day levy notice, you can request Collection Due Process Hearings to settle a bank levy before it even begins. In this particular hearing, you can see if the IRS might give you a chance to defend yourself against IRS bank levy. This is also a chance to state if you’re in the middle of a bankruptcy proceeding or you found errors in your tax assessment. In these specific cases, the IRS may reevaluate your case and can give you the levy release if such is reasonable.
Request an Installment Agreement
If IRS found its way to your assets, the revenue service won’t issue a bank release if you haven’t settled your tax debts. To avoid the whole waiting game, you can try to request an installment agreement to compensate for your debts. The installment plan would let you make a regular monthly payment of your tax obligation. Of course, the agreement would depend on how much money you’re making to ensure you can really shoulder it.
An Offer in Compromise is another way to settle pay off your full tax burden. A good OIC would help you resolve your tax debt less than what you owe to the IRS. If you’re lucky enough, the IRS can forgive the remaining portion of your tax liability.
File for Bankruptcy
Possibly the last resort, you can get a bank levy release if you file for bankruptcy. No creditor, not even the IRS, can collect any money from you. However, you should know that bankruptcy could risk your credit report for several years.
Getting the Right IRS Bank Levy Help
The whole process of settling the IRS bank levy could be confusing and overwhelming for a mere taxpayer. We, at Platinum Tax Defenders, are eager to help you get through the process. Our tax relief team has licensed tax attorneys, x-IRS attorneys and also Certified Public Accountants. PTD could give you the best guide to better understand the what, when, why, and how of the IRS bank levy. Before it’s too late, reach us, and we’re more than willing to assist you to your tax resolution freedom!