General Questions

An IRS bank account levy is the seizure of funds from your bank account to satisfy unpaid tax debt. By using a bank levy, the IRS has your account(s) frozen and paid to them so you can’t spend the money. The account is frozen for a minimum of 21 days, so you can settle any disagreements, and then the IRS gets paid if you cannot otherwise pay your balance or get the bank levy released. Levies can empty your bank account, causing you to bounce checks and rack up bank penalties and processing fees. Unlike a recurring wage garnishment that takes a percentage of your check every pay period, bank levies are designed to take all the money in your account(s). Bank levies generally happen only once, but they can be reissued until the debt is satisfied.

Before the IRS actually sends a notice of levy letter to your bank it has to do three things:
  • Make a tax assessment: this involves looking at your tax return(s) and making an assessment based on your income and how much tax is owed. The IRS then has to make a formal request to you for payment.
  • Exhaust all standard means of collecting that money: The IRS is willing to work with tax payers and this threshold is very extensive. It is only after these standard collection methods have failed that enforcement actions escalate.
  • Final Notice of intent to levy is served: 30 days before the actual “Notice of Levy” is sent to the bank, a final notice of intent to levy is sent to you (the taxpayer). During this period, the IRS will attempt to find any accounts you may have in order to ascertain the availability of funds. Once this is established, the process moves quickly and you must act fast.
A bank account levy can be stopped, but it is important to act quickly to resolve this before it is too late. The levy typically ends when a debt is satisfied. However, there may be other options. The bank must hold the funds in your account(s) for a minimum of 21 days before they are released to the IRS. If you reach an agreement to pay by other means, declare bankruptcy, or successfully appeal to have the levy released, you’ll get access to your cash again. Documents that show the levy is causing a hardship are especially useful in negotiating a bank levy release. Those could include eviction notices, orders to shut off utilities, past due notices, etc. It is important to communicate with the IRS or get reputable legal help if you want to end a bank levy.


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