« What is a Wage Levy/Wage Garnishment?? | Main | Identity Theft-Don’t Let this Happen to You »
What is an IRS Bank Levy?
By Larry Weinstein, CPA | December 21, 2007
If your bank account is levied by the IRS, the bank “freezes” your bank account for the amount of the levy, on the day the bank receives the levy. The funds that are frozen are not immediately given to the IRS on that day.
You have 21 days to work with the IRS and get the levy released.
If you do not take action, your bank will send the money in your account that was “frozen” to the IRS. These funds will be credited to your account, reducing the amount owed.
To get the levy released, you must work with the IRS to find a solution such as an installment agreement, currently-not-collectible, or offer-in-compromise that would be a satisfactory solution.
The levy does not affect any deposits made after the levy, unless the IRS issues another levy.
Thus, if at all possible, it is always advisable, to deposit additional funds into your bank account after a levy. You will not have available the portion of your balance that the IRS levied upon. This will probably cause the bank to dishonor (bounce) any checks that are presented against your account.
The levy is effective for only the balance in your account at the time of levy. If your balance with the IRS is still not cleared, the IRS must issue a new bank levy to obtain more funds from your bank account.
Topics: Bank Levy |