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How It Works
Here’s how the IRS uses the bank levy to grab taxes out of your bank account. If you fail to pay your tax bill when due, the IRS resorts to calls, visits, letters, and garnishments. What is shocking for the wage earner is that the IRS does not have to provide any notice before beginning collection activity for IRS back taxes.
The IRS has vast collection powers, unlike any person to whom you might owe a debt. Why? Because they can issue a bank levy and take property without a court proceeding. No other collection agency gets to do this (not counting repossessions, where you’ve agreed in the contract that repossession is part of the deal).
When a Bank Levy is More Than a Bank Levy
The bank levy starts when the IRS sends a letter along with an IRS levy notice to your bank. The notice states that the IRS is seizing your bank account. Your bank is ordered to freeze all of your accounts and to turnover the funds to the IRS. The IRS frequently uses bank levies as a way for collecting back taxes. Of course the bank always complies by promptly freezing your funds because bank knows that if it fails to cooperate with the IRS then the IRS will come after it! When you are on the wrong end of a bank levy, you are left feeling frightened and confused. Just as bad, the IRS can seize funds from any source that has funds belonging to the you. This means they can grab your 401K from Fidelity (or anyone else), your series H bonds at the bank in your safe deposit box, and insurance proceeds that are reducible to cash. An IRS bank levy can have a horrendous impact on your finances.
The Good News
But there’s also good news: You can stop bank levies today! Do not wait for the IRS to start collection efforts. Find answers to past due taxes before the IRS sends out its levy letter and notice. To learn how you may be able to stop a bank levy from the IRS contact us today.
Contact us to schedule your consultation with an experienced Chicago tax attorney. Evening and weekend hours are available by appointment. As this tax law firm represents individuals and business and is always pleased to meet with you, please call us at 312-471-0126 to discuss your situation in detail.