My Bank Account Was Levied By The IRS – Can I Still Make Deposits And Use The Account?
My Bank Account Was Levied
A future client of the Tax Resolution Institute started his relationship with Peter Stephan by asking, “My bank account was levied by the IRS and there were not enough funds to cover the bank levy. Will the IRS levy all future deposits until it is satisfied or can I continue to make deposits, use the account and pay my bills?” Later, after answering the question, Peter Stephan convinced the future client to become a client by explaining how the bank levy could be lifted and his IRS tax problem solved to cover the rest. Still, we imagine you want to hear Peter’ Stephan’s answer to my bank account was levied by the IRS question.
My Bank Account Was Levied By The IRS
Peter Stephan explained that an IRS bank levy attaches only to funds in your account at the time your bank processes the levy. Any future deposits that you make are not subject to the levy once it has been processed. For example, if you have $4000 in your account at the time of levy, your bank will deduct that amount and only that amount to cover the debt. Without an additional IRS bank levy If you make a $1,000 deposit the next day, that money is yours and is not subject to the levy – you keep it. The levy was extinguished when the $200 was deducted.
An IRS bank levy is not continuous on your account. After the levy is processed, you can continue to use the account and pay your bills. The IRS would have to send a brand new levy to get money out of your account again. You certainly never want to say that my bank account was levied by the IRS again. But this rarely happens because rarely is there any substantial additions to a levied bank account.. As a result, a second bank levy is unlikely to happen in rapid fire succession. Still, caution should be exercised. Your account is clearly active in the IRS collection queue. More importantly, you need to look out for a wage garnishment or asset seizure.
IRS Bank Levy Not Continuous
Do you know IRS bank levy requires your bank to hold the levied funds for 20 days before sending it to the IRS? This gives you a window of time to contact the IRS, negotiate a release of the levy and have the funds restored to your account. This is why you should contact a tax resolution professional like the tax attorneys and tax resolution specialists at TRI for help.
If you have been hit with a bank account levy, the IRS is doing its best to clear your delinquent tax debt balance off their books. It’s their best in terms of a first step and nobody wants to ever say, “My bank account was levied by the IRS.” But it’s only a first step. If you have been contacted by the IRS about a tax levy, bank levy or any other back tax collection action, please contact TRI right away for help by calling 818-704-1443.