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[I514]Irs Bank Account Levy

by Matt Robinson, Mat

If you received an IRS bank account levy it is imperative that you act quickly if you don't want or can't afford to have the IRS seize the funds in your bank account. It is important to find the best method that works for your unique situation. When you realize your bank account is going to be levied you will have no more than 21 days to act before your funds are seized. When your bank receives notification that the IRS will be seizing your funds they will freeze your account. The bank then makes the IRS wait 21 days before they send the funds over to them.

One important thing to know is that the IRS does not want to levy your assets, they would much rather resolve tax problems in another manner. The IRS uses levies as a last resort for collecting taxes from an unresponsive taxpayer. Most taxpayers end up getting in this situation because they realize they cannot pay the IRS and they avoid collection notices because there is little they feel they can do about them. What most taxpayers don't realize is that there are actually many mechanisms setup by the IRS to allow taxpayers to get back on a good standing with the IRS, even if they cannot pay their taxes. Below are the three most common methods used to release an IRS bank account levy.

1) Pay the IRS in Full – Most likely if you have a bank account levy you cannot pay your taxes in full and that is the reason why you are in this situation in the first place. Sometimes thinking outside of the box a little can help you come up with some ways to come up with funds to pay off your taxes. Below are some ideas to come up with funds to pay your taxes owed, it can be a good idea to even use a combination of a few of these.

a.Borrow from family and friends – This is only a good idea if you know you will be able to come up with the funds to pay them back in the very near future. It is not a good idea if you can't because there are other options you can use if that will be a problem.

b. Sell some assets – Do you have an extra car or some old stuff in the attic that may actually hold some decent value to it? You can either have a tag sale or put some stuff on eBay to quickly get some extra funds to put towards the taxes you owe.

c. Refinance your home – If you have equity in your home it is likely you will be able to refinance it and take that equity to pay towards the taxes you owe. Most likely you won't have enough time to use this method before the IRS seizes funds so maybe you can borrow from family and friends while your refinance is being processed and then pay back your family and friends with the refinance money.

2) Enter into an IRS Payment Plan – There are a few payment plans offered by the IRS. The most common payment plan is an installment agreement. With an installment agreement you will be able to pay off the tax debt owed in monthly payments. This method is one of the most common forms of tax settlement. You may be able to qualify for this as long as you don't have a history of defaults on these types of agreements. Once your installment agreement is accepted by the IRS the bank levy will be released.

3) File for an offer in compromise – An offer in compromise is a great program offered by the IRS that allows deserving taxpayers a way to settle their taxes owed for far less than the original amount to help them get back on track. A lot of taxpayers would like to settle this way but only few actually have their filings accepted. If you choose to use this method the IRS officer that you are dealing with may stop the bank levy while they are reviewing your case if they think you actually may have a chance of receiving this kind of relief. Once your offer is filed your bank levy will be paused and once it is accepted it will be released.

Bank levies are a very harsh collection mechanism. It is important to closely, but quickly examine all your options if you cannot afford to have the IRS seize your funds. It may also be a great idea to talk with a tax professional about your situation. A tax professional can quickly analyze your situation and come up with a plan of action. Tax professionals are great at stopping bank levies and coming to another form of resolution with the IRS. No matter what action you take, act quick as time is very limited.

Before the IRS sends a levy notice to you bank, employer or any other third party holding your assets, it will send you a letter 1058 - Final Notice of Intent to Levy and Notice of Your Right to A Hearing.

The letter will notify you of your unpaid taxes and that the IRS intends to levy to collect the amount you owe starting thirty days after the date of that letter. The IRS can levy your wages, bank accounts and other property.

Once you receive this letter, the most effective weapon you have to stop the IRS is to file Form 12153 - Request for Collection Due Process Hearing within 30 dates from the date of the letter.

In your Request for Collection Due Process hearing, you can also submit an Offer in Compromise or request an Installment Agreement. In your request for a hearing, you must offer an alternative, other than levy that would be acceptable to the IRS.

If you do not request for a Collection Due Process hearing, from day thirty one onwards the IRS is free to levy your bank accounts, wages and other properties.

If your request for a Collection Due Process hearing is made in time, the IRS will schedule a hearing.

This hearing is presided over by an Appeals Officer. The purpose of the hearing is to determine whether the collection activity by the IRS is appropriate.

The Appeals Officer is independent from IRS collection personnel and at the hearing must verify that the IRS followed all administrative and procedural requirements, determine if the proposed IRS collection action "balances the need for efficient collection of taxes with the legitimate concern of the taxpayer that the collection action be no more intrusive than necessary and consider all less intrusive collection alternatives such as an Offer in Compromise or an Installment Agreement which you may propose in your request for Collection Due Process hearing.

At the hearing, you can propose other ways to resolve the tax liability and also contest your liability for the underlying tax, as long as the liability has not been the subject of a previous Appeals Office determination or a final Tax Court decision.

While you are waiting for your hearing, the IRS will suspend all collection activities. If you fail to resolve your problem at the hearing the IRS will issue a Notice of Determination.

Unless you file a lawsuit in the United States District Court, thirty days after the Notice of Determination has been issued, the IRS can levy your wages and property.

Filing for a Collection Due Process hearing and/or a lawsuit in the United States District Court both extend the 10 year statute of limitation for recovery of tax dues.

If the deadline for requesting a Collection Due Process Hearing has passed, you can still request the IRS for an equivalent hearing using the same form - Form 12153 - Request for Collection Due Process Hearing.

An equivalent hearing, unlike a Collection Due Process hearing does not extend the 10 year statute of limitation for collection of tax debts.

Also the IRS may levy while you are awainting equivalent hearing.

There is no right of appeal in any court against the decision of the IRS in an equivalent hearing.

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Both Matt Robinson & Larry Weinstein are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Matt Robinson has sinced written about articles on various topics from IRS Tax, tax and IRS Tax. Find more information on an . Need help to stop a bank levy? We offer. Matt Robinson's top article generates over 1600 views. to your Favourites.

Larry Weinstein has sinced written about articles on various topics from IRS Tax, Home Management and IRS Tax. Larry M. Weinstein, CPA, Certified Tax Resolution Specialist is the Director of the Nat'll Tax Practice for, and has developed a 7. Larry Weinstein's top article generates over 2400 views. to your Favourites.