Bank Levy

A bank levy is an enforced collection, where money is taken out of your bank account. Before the IRS or state can levy your bank account they must send a Notice of Intent to Levy to your last known address.

If you do not pay your taxes (or make arrangements to settle your debt):

The government can seize and sell property that you hold (such as your car, boat, or house), or
The government can levy property that is yours but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, rental income, accounts receivables, the cash value of your life insurance, or commissions).

The government usually levies only when the following three conditions have occurred:

The government assessed the tax and sent you a Final Notice - Balance Due
you neglected or refused to pay the tax, and
The government sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. The government usually sends this notice to your last known address by certified mail, return receipt requested, but they may give this notice to you in person, or leave it at your home or your usual place of business.

If a levy is placed on your bank account, the levy attaches funds that have cleared and are available for withdrawal, up to the amount of the levy. The bank must wait until 21 days after a levy is received before sending the money. The holding period allows you time to resolve any dispute about account ownership, or get professional advice on your situation. After 21 days, the bank must send the money, plus, if applicable, any interest earned on that amount.

To cease enforced collection, the taxpayer must work with the taxing authority, by presenting a reasonable resolution and working toward fixing the tax problems.

To resolve your tax problems, please contact Larson Financial today.

The information provided on this website is for general guidance and to offer the user general information on particular subjects of interest. It is not intended to constitute legal, accounting, tax or other professional advice or services. To the extent that this site concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
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