Except in rare cases, the IRS has to send you a Notice of Intent to Levy by mail before your bank account can be levied. This notice tells you the following things:
- You owe IRS tax debt and haven’t paid on time.
- The IRS is going to seize the money in your bank account soon.
- You have the right to request a Collection Due Process (CDP) hearing.
- You have only 30 days to request a CDP hearing.
Responding to the CDP Notice
Ideally, you would contact a tax resolution immediately after receiving the CDP notice. This would give you some time to meet with your attorney, discuss the situation, and still have plenty of time to meet the CDP hearing deadline.
If you don’t open your mail or read the notice right away, you might not have much time left before the deadline expires. The important thing to note is that the request for a CDP hearing must be made in writing.
CDP Hearing
Request the CDP hearing gives you some breathing room. If you haven’t had a chance to dispute the amount of the tax assessment, you can now do so.
For most taxpayers, the amount of tax is not in dispute. They just can’t pay, and they need to figure out a payment arrangement that works with their budget.
You still may be able to reduce the amount you owe using penalty abatement, innocent spouse relief, or another tax resolution option. The remaining balance can typically be paid off using an installment agreement, allow an Offer in Compromise may also be considered in some cases.
If you’re too late to request to the CDP hearing, you may still be able to negotiate a deal to stop the bank account levy, but you also lose some important rights when you miss this deadline.
Prevent or Delay the Bank Levy
The IRS will generally not try to seize your assets until you’ve had your CDP hearing. IRS collections are also typically halted while considering your requests for innocent spouse relief, an installment plan, or an Offer in Compromise.
If you can’t get the IRS Settlement Officer to see things your way, you also have the right to petition the Tax Court. Once again, the IRS generally doesn’t take enforced collection assets while your case is pending. This process can take a while and give you more time to avoid the levy.
If you don’t respond to the CDP notice within 30 days, you lose the right to petition the Tax Court. There are a lot of ways to prevent a bank account levy, but you have to act quickly to preserve your rights.
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.