IRS Bank Levy Solutions

An IRS Bank Levy occurs only after the IRS is unsuccessful at collecting from you. If you get an IRS Bank Levy here’s what to do first.

The first step with an IRS levy is to check to see if there is a basis to get it released, while you work out a payment deal on your tax debt. Otherwise, your problems will only increase as you begin o bounce checks because the funds you thought were available in your bank account have been removed by Uncle Sam. Often our Trippon & Company CPA tax professionals are able to get a levy release for our clients. But, before getting into levy release strategies, let’s first make sure you understand where you stand when the IRS uses a bank levy against you.

What an IRS Bank Levy is…

If the IRS has issued a bank levy, they are proactively seizing your personal assets to settle an outstanding tax debt you owe. Once the bank levy has been assessed, the underlying bank must wait a period of 21 days before sending the IRS funds held within the associated bank account. During this holding period, the taxpayer may request and be granted a levy release if they have appealed and filed the appropriate steps showing cause.

IRS Bank Levy Releases

A levy release may be granted for several reasons, including financial hardship, IRS procedural errors; or in the event that the taxpayer pays their outstanding tax debts in full, including all associated penalties and interest. Generally this is best time to get a tax professional involved because IRS procedure is both very technical and very complicated.

Exempt Taxpayer Income

A portion of the taxpayer’s income deposited into the levied bank account may be exempt from collection under IRS rules. How much is exempt? That depends on your geographic location and family situation. The IRS has allowable cost of living exemptions based on your region, and your number of dependants. Unlike a wage levy, bank levies are not continuous.

IRS Levy Errors

If the IRS has assessed a bank levy on a taxpayer’s bank account in error, the individual may be entitled to a refund or reimbursement of funds. A determination appeal must be filed within 30 days of the tax levy using the appropriate IRS forms.

Of course, the best action for individual taxpayers is to resolve their outstanding tax liabilities before an IRS Bank Levy is assessed. When it comes with tax debts, it pays to be proactive.

Need help with an IRS Bank Levy? Call our Trippon & Company CPA office at 800-952-1099. We can represent IRS audit clients in all 50 States. Our phones are answered 24 hours a day, 7 days a week. Call now and we’ll start protecting your bottom line TODAY!