IRS Bank Levy- Intent to Levy

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IRS Bank LevyOne avenue that the IRS will take to collect overdue taxes is the issuance of a bank levy. This means the IRS has legally claimed the money in the bank account(s) in order to pay part or all of a taxpayer’s debt.

An account levy differs from a property  lien, which is issued as security or collateral for the tax debt while a levy actually seizes the assets in order to satisfy tax debt.

The IRS may  also legally seize any funds from an individual, business or institution that is holding an investment or deposit for the indebted taxpayer.  This can include a utility company deposit, home escrow account or payments into a 401K retirement account.

A bank levy sent by the IRS instructs the bank to freeze all assets in the account for 21 days after which the bank is to forward the IRS all monies in the account to be put toward the tax debt. The money they levy from your account(s) will be put toward your principle balance first but your tax account will still be accruing interest and penalties until you pay it off. You are still being charged interest and penalties before, during and after the IRS has levied your accounts.

Banks are required to cooperate with IRS levies and will be seriously penalized if they fail to do so.  Expecting your personal banker, no matter how long you have been with your bank, to help prevent an IRS levy is pointless because the matter is completely out of their control.

 The IRS will send a Final Notice of Intent to Levy at least 30 days before they actually levy your assets.  They will send this notice by certified or registered mail or they may have a field officer give it to you in person.  This is especially dreary since IRS Field Agents also carry guns and are responsible for the arrest of extremely delinquent taxpayers. They are permitted by law to even show up to your workplace or home to personally issue a Final Notice of Intent to Levy. A hand delivered notice is rare but can be extremely embarrassing and uncomfortable for the taxpayer.

After you receive an Intent to Levy notice you have 30 days to request a Collection Due Process hearing with the IRS’s Office of Appeals. You may be able to prove financial hardship, incorrect IRS administration assessment or you may be able to negotiate to make other collection arrangements.  In these cases the IRS will release the levy of your assets. 

An IRS bank levy can be devastating to a taxpayer’s financial stability. Although contacting the IRS and negotiating ‘other arrangements’ may not seem to be too difficult of a task, the reality is, if your tax debt has gotten to a point where your financial accounts are being threatened with levies then the time has come to seek professional tax help.  Getting a hold of an IRS representative to discuss your tax account can consume many hours of the day. We know this because we talk to them every day and have had to design a specific phone system so that our Enrolled Agents are not spending most of their  work day holding for an IRS agent.  It is also difficult to negotiate if you do not know tax codes and all of the rights you have as a taxpayer.

The professionals at OMG Tax have negotiated the release of hundreds of IRS bank levies throughout our years of service.   If you are dealing with an IRS bank levy; we may be able to negotiate its release.  For more details on how the OMG Tax team can assist you in this matter please Contact Us and one of our team members will be happy to discuss your options with you. 

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