Bank Levy: The IRS is taking my bank balance

The IRS is taking my bank account balance

Don’t panic if the IRS has just taken your account balance. It’s likely that the IRS has been unsuccessful in reaching you for some time. This is why they took the extreme measure of garnishing your bank, credit union, and brokerage accounts with an IRS bank levy. We need to act quickly to solve the situation, but understand not all is lost.

Before a levy, the IRS mails a final notice of the levy to the most recent address that they have on file. Avoiding registered mail will not prevent or stop a levy. You should call the IRS immediately to ask what they need to release the levy. Better yet, we recommend hiring a knowledgeable tax professional who is authorized to represent you before the IRS to make that call.

What is a bank levy?

If your IRS balance is significantly large and you have not tried to pay off that tax debt, the IRS takes an advanced measure to pay off the balance—with or without you knowing. Since they cannot contact you or because you haven’t replied to their letters, they have legal authority to levy your accounts. Once you or your representative determine the details and extent of the issue, you must act quickly to resolve the problem causing the levy.

It’s important to note that if the IRS is levying your bank accounts they are probably also trying to levy wages. This means they will or have contacted your employer and require that most of your wages be withheld and sent to the IRS. If the wage levy has not already occurred, it’s possible that the IRS will process a wage levy on the same day or day after the bank levy. You must act immediately to resolve your tax problem with the IRS, especially if losing your bank account balance and wages will put you in jeopardy of financial hardship.

Releasing a Bank Levy

If you pay what you owe, the IRS will release you from the bank levy. The process to appeal the levy can be complex if you cannot pay off your debt, so it is best to have someone represent you before the IRS. Representation can explain your situation through the proper lines and begin the process of setting up alternative payment plans to pay off your IRS balance.

Even with a financial hardship, the IRS will require supporting documentation detailing your financial situation. Most of the time, the IRS will require a financial disclosure on an authorized IRS Collection Information Statement (CIS) form. Currently approved CIS forms are IRS forms 433-A, B, or F. Either the IRS or your tax representative will let you know which form to use for your case.

The IRS will also need documents to support your financial disclosure like pay stubs, bank statements, and copies of bills. Depending on your specific case, the IRS will notify you of what documents they need to support your CIS form.

Contacting a Tax Professional for Help

A bank levy can be scary, especially when it brings financial hardship. Remember that you are not alone in solving this problem with the IRS. Having a trained professional at your side can be emotionally relieving and help you save money in the long run. At Private Tax Solutions, our team will represent you before the IRS and find the best options to resolve the levy and your IRS balance as quick as possible. Don’t wait another day, call us and let’s find a solution.