What Is A IRS Bank Levy?
An IRS bank levy is, a common tax levy used by the IRS to collect unpaid back taxes. A Taxpayer’s bank receives a notice from the Internal Revenue Service which, instructs them to withdraw money from their client’s bank account. Since, banks have legal obligations to the IRS, they must comply with levy orders. Yet, financial institutions may wait up to 30 days before, releasing levied taxpayer funds to the IRS. Thus, allowing taxpayers a small amount of time to resolve back tax problems with the IRS.
Why Does The IRS Use Bank Levies?
The IRS commonly arranges bank levies since, they can easily seize large sums of unpaid back taxes. However, the IRS will levy bank accounts only if, the account balances can satisfy a major portion of tax debt. If current account balances can only cover a small portion of tax debt, the IRS will use other means to levy a taxpayer, such as wage garnishments.
When Will The IRS Use A Bank Levy ?
The Internal Revenue Service will not levy bank accounts by, surprise. There are tax laws which govern the IRS bank levy process. Generally, the IRS needs to demand payment for back taxes and wait for a response from the taxpayer. If the taxpayer ignores the letters or fails to arrange payment options, the IRS will eventually mail a “30 day intent to levy bank account” notice. Taxpayers should be aware, the IRS does not enforce a bank levy before obtaining information on their bank accounts. Therefore, the IRS is already in contact with banks before mailing notices to taxpayers.
What Should Do Today
You need to ACT QUICKLY. Since tax situations vary by individual, you need to carefully look at your financial and tax situation. You may prevent an IRS bank levy however, very little time is available for action. Remember, once you receive a 30 day notice, you have exactly 30 days to make arrangements to pay your unpaid back taxes. This leaves a very small window of time, for you to get your finances in order. Even worse, IRS processing times may take well over the 30 days. Making it important to know, how to push the IRS before your bank account is levied.
You can stop an IRS bank levy.
You can appeal, remove or stop bank levies. IRS bank levy removal is likely if, you take the necessary steps with the IRS. However, the steps you take depend on your tax situation. With so many tax solutions at hand, it is difficult to determine the best money saving options. If you read the 5 Best Steps To Tax Settlement, you might conclude the importance of professional help. Nonetheless, here are a few good rules of thumb to evaluate your next steps:
- The cost of back tax professional help should never be equal to or, higher than your back tax debt. If this applies to you, have a tax prep professional review your tax returns in question and, make payment arrangements on your own with the IRS.
- If your tax debts are substantial, you should seek professional help. You may be able to eliminate considerable amounts of back taxes hence, saving you time and money in the long run. You are welcome to get in touch with one of our back tax professionals. The advice is free and highly recommended. (Ask A PRO)
* Tax Tip: Once the IRS successfully levies your money, it is near impossible to recover. Therefore, it is important to proceed with experience and knowledge before dealing with an IRS bank levy.