Seizure of Funds from a Bank Levy
In extreme cases of non-payment of taxes, the IRS (Internal Revenue Service) can impose a levy on your bank account. It’s perhaps the harshest form of tax collection unpaid debt that can have a devastating effect on your finances. You can get legal protection from bank levies, so it’s best to hire a law firm that knows the tax laws.
Nobody likes bank levies, not even the IRS. They use it as a last resort for people who either are unable to pay their taxes or ignore their tax bill altogether. Remember, your tax bill won’t go away, and the IRS is persistent in their pursuit of payment.
Relief from a Bank Levy
Bank levies are a legal matter. Your best defense is to seek help immediately and hire a tax attorney to plead your case to the IRS. It’s crucial to bring in Bryson Law Firm, L.L.C. before a bank levy is even considered. But don’t give up hope if the IRS has started planning or initiated a levy on your funds.
There are two timeframes to keep in mind for the IRS to impose a bank levy – 30 days and 21 days. Three events must occur before the IRS can impose the levy:
- The IRS sends a “Notice and Demand for Payment” letter
- You neglect to pay the tax bill
- The IRS then sends or personally delivers a “Final Notice of Intent to Levy” letter.
The 30-day deadline goes into effect once you receive the final notice. At the end of the 30 days, the IRS will freeze the funds in all of your bank accounts. Once your accounts are frozen, you then have 21 days to reach an agreement with the IRS for payment of your taxes. If no agreement can be reached, the IRS seizes the levied funds, never to be seen by you again.
That gives us 51 days before your money disappears into IRS coffers. Before that happens, our tax attorneys at Bryson Law Firm, L.L.C. can work with you and the IRS to come to an agreement. We have a number of options available to us to remove the account levy and come up with a game plan for a solution to your tax dilemma.
Some of the options to remove a bank levy include:
- Discussing an Offer in Compromise to pay a lower amount of the taxes owed
- Initiating an Installment Agreement to set up a payment plan
- Appealing the levy to the Regional IRS Appeals office
- Applying for Hardship status by showing you can’t pay for basic needs
Some out-of-state tax firms will only give you one option. We collect all your pertinent financial information and present the pros and cons of different scenarios to get the levy released.
The Difference Between a Levy and a Lien
Some people confuse levies and liens and how they affect their finances. When the IRS establishes a lien on your assets, they are claiming a legal right to secure the assets for payment of a tax bill sometime in the future. An IRS levy is much more severe. The IRS actually seizes your funds to pay your tax bill by force. Levies can be much more devastating to your finances. Imagine trying to pay for your meal at a restaurant and your debit card is declined, or not being able to pay your employees because your bank funds have been seized.
The good news is the IRS can only collect the funds seized in your accounts at the time the levy is enacted. So, you can continue to make deposits and withdrawals to your accounts after the levy. While the IRS can impose additional levies in the future, you will still be able to manage your finances with funds placed in your account after the initial levy.
Seek Professional Help for a Bank Levy
Enlisting a tax attorney is crucial to heading off or removing a bank levy. Call or click to set up a free initial consultation with a tax attorney at Bryson Law Firm, L.L.C. to discuss your bank levies and the best options to prevent it from happening to you. Don’t wait. The clock is ticking to stop or eliminate a bank levy on your accounts.