Bank Levy Relief

IRS seized your bank account? We provide immediate relief from bank levies and help you regain control of your finances with expert representation.

What is a Bank Levy and How it Works

Key Takeaways:

• Bank levies can be used by creditors to access bank account funds to collect on a debtor's outstanding tax debt.
• When a creditor requests a bank levy, your account will immediately be frozen – and you may not be notified.
• A money judgment is a court-issued document indicating limits on how much a creditor can seize from a debtor's bank accounts.
• Judgment creditors can try to collect on unpaid debts through wage garnishments, tax liens, and writs.
• The best way to remove a bank levy is to pay your tax debt or settle with the IRS.
• When an individual accumulates unpaid taxes, a bank levy can be used by creditors to legally seize funds from the debtor's bank account to pay off the unpaid debt.

How do Bank Levies work?

Bank levies allows creditors to access your bank account funds. Your bank will freeze funds in your account and require the bank to send this money to creditors to pay your debt.

To request funds from your bank account from a creditor, you must send a request to your bank proving there is a legal judgment against you. Some government creditors like the Internal Revenue Service (IRS) don't require a court judgment.

Bank levies are usually followed by less formal collection attempts like collection calls. To levy an account, most lenders need to file a lawsuit against your account to obtain court approval. If the creditor is successful, the court will issue a money judgment stating how much you owe. This is your best and most important opportunity to dispute the amount owed.

Tax Levies vs. Tax Liens

A tax levy is different from a tax lien in that a lien is security in support of tax debt, whereas a levy is a process of actually taking property used to satisfy a tax liability. If you have unpaid debt, and you have not made arrangements to pay that debt, the IRS may seize any of the following:

If the IRS determines you are available to be levied, this method is usually only issued after certain requirements are met by the IRS:

• You Received A Notice And Demand For Payment
• You Refused Or Neglected To Pay Your Tax Bill
• You Received An Intent To Levy And Failed To Respond Within 30 Days

Other Ways Judgment Creditors Can Try To Collect On Tax Debt

Wages

Creditors may use a wage garnishment and levy a percentage of an employee's wage. Before garnishing your wages, lenders will need to obtain the appropriate legal documents from a court. Federal and state laws determine the maximum amount that can be garnished. It is often set at 25%.

Real Property

Mortgage lending can also forbid the sale of real estate. They can put a lien on your house and force you to sell it (called foreclosure sales) or pay you when you sell it. The proceeds of the sale are used to "lift" the lien.

Personal Property

A writ can be obtained from a court to seize personal properties. A writ allows a sheriff, or another public official, to enter your home or business to seize assets (such as cash registers, boats, jewelry, etc.). The proceeds can be applied to the debt by selling the property at a public auction.

How tax levy could affect you?

These are some possible outcomes if you get hit with IRS bank levies:

• Wage garnishment: Your paycheck could shrink when your employer withdraws a percentage of your earnings each payday.
• Frozen bank accounts: For recouping taxes, your bank can place a 21-day hold on your account. The bank might send part or all of your money to IRS if you don't reach an agreement with them.
• Your house may be at risk: The IRS states it cannot seize unemployment benefits and certain annuity and pension benefits, certain disability payments, workers' compensation, public assistance payments, or child support payments.

How to stop a bank account levy?

There are many ways you can stop the IRS from taking your assets that almost always involve filing all tax returns. These are the most common arrangements the IRS debt forgiveness program will accept:

How To Defend Against a Bank Levy?

You can limit or prevent IRS levies from being applied to your account. Talk to a professional tax attorney same as Ideal Tax to learn about your options (laws differ from one state to the next). There are several options: