The IRS follows a standard process when levying the funds in a taxpayer’s bank account. You will be given several opportunities to resolve your tax debt problems before the money in your bank account is subject to IRS seizure.
You Have Unpaid Taxes
The IRS won’t levy your bank account until you’ve had unpaid taxes for quite some time. This process begins when the IRS sends you a notice demanding payment of taxes. This can occur when you fail to file a return or when the IRS adjusts items on your return.
You can avoid enforced IRS collection actions by either paying your tax bill, disputing the tax liability, or working out a payment arrangement. If the deadline to pay your taxes passes and you don’t do anything, you’ll move to the next phase of the process.
The IRS may send additional notices demanding payment and assessing penalties and interest because your tax payment is late. It typically takes several months or more before the IRS attempts to seize your assets. Eventually, they’ll send a Final Notice of Intent to Levy. This notice informs you of your right to a Collection Due Process (CDP) hearing.
The CDP notice is also called a 30-day notice because you have 30 days to request the CDP hearing. You should take this notice seriously. Your entire bank account balance can be seized, up to the full amount of your delinquent tax liability, plus penalties and interest.
You can prevent, or at the very least delay, the bank levy in several ways:
- Claim innocent spouse relief
- Request currently not collectible states
- Submit an Offer in Compromise
- Negotiate a monthly installment agreement
But you need to respond within 30 days and request your CDP hearing to preserve these rights.
Bank Levy Waiting Period
Once the 30-day period to request your CDP hearing expires, the IRS informs your bank that they are going to levy your assets. Your bank is required by law to comply with the IRS levy request.
Fortunately, there is a 21-day waiting period before the bank actually remits the funds in your bank account to the IRS. However, your funds will be frozen in the account during this waiting period. You won’t be able to avoid the levy by transferring or withdrawing your money.
You can still try to negotiate with the IRS during the 21-day waiting period. Contact a tax relief attorney immediately for assistance with an IRS bank account levy.
Get help settling your tax debt by calling The Gartzman Law Firm at (770) 939-7710. We can help you protect your assets and find a creative solution to your tax problems.