Our firm frequently represents taxpayers in Richardson, TX, and other areas of Texas, who have had the IRS levy their bank accounts. The result of doing so can create chaos in the lives of those taxpayers and a high level of stress with not knowing what is coming next. When these taxpayers come to us, our first priority is to have the levy removed if possible, and then to assist the taxpayers in resolving the issue which caused the levy, and bring an end to their problems.
Bank Levies are one-time levies. A one-time levy means that the IRS gets only one shot at the taxpayer’s bank account per levy action. For example, if the balance in the account is $200 today when the levy is served, and tomorrow there is a $10,000 deposit into the account, the IRS gets $200, the amount on the day the levy was received. The only way for the IRS to get additional money from this bank account is to serve another levy.
Why Does the IRS Levy the Taxpayer?
Luckily for taxpayer, the IRS does not one day just decide to levy the taxpayer. By the time the account is levied, there have been several notices sent to the taxpayer over a period of time. Included in these notices would have been a Final Notice of Intent to Levy (usually a LT 11) which also gives the taxpayer Collection Due Process (CDP) rights, including the ability to get an Appeals Hearing, and to put all collections on hold (Including the Levy), until the Hearing. It is only when the notices are not addressed and a solution worked out with the IRS, that a Levy is issued.
The Bank Account has been Levied. What Does the Taxpayer Do?
By statute, banks do not send levied funds to the IRS for 21 days. If the taxpayer acts quickly, they may be able to have the IRS give them back all or some of the amount levied from their bank account.
The actions that the taxpayer should take to address the problem include:
- Contact the IRS immediately to communicate their intention to resolve the issue, and request that the IRS not complete the initial levy. The IRS may be willing to release the funds back to the Taxpayer, based on taxpayer's history with the IRS and the taxpayer’s willingness to find a solution.
- Provide the IRS with whatever information is requested which may include getting into Tax Compliance, including filing missing tax returns, and providing Financial Information to the IRS.
- Propose a plan to the IRS to resolve the tax issue. These resolutions include an Installment Agreement, an Offer-in-Compromise, or having the account placed in Currently Not Collectible Status.
- Follow-through on your promises. This is important!
Do you Need Help?
If you need help with IRS Levy Action or any other issues related to IRS tax debt, we can help you. Please give me a call at (972) 821-1991 or at email@example.com. To learn more about us, visit our website at https://jablonskyandassociates.com/.