Why Do I Have An IRS Bank Levy?
So you just got a very unpleasant surprise, right? You tried to use your debit card to pay for lunch the waiter told you that your card had been declined. Or you may have just checked online to see what your balance was in your bank account. You called the bank and discovered an item on your bank statement that says something like “IRS bank levy” or something similar.
Your worst fears have been confirmed. The IRS is holding your money, among other things, with an IRS bank levy. You have no idea why, and the thought of the long process to remedy the situation gives you intense anxiety. What are you going to do?!?
Don’t give up just yet. Even this is survivable.
First thing’s first – What exactly is an IRS bank levy? The IRS website says this: “An IRS bank levy permits the legal seizure of your property to satisfy a tax debt. It can garnish wages, take money in your bank or other financial account, seize and sell your vehicle(s), real estate and other personal property.”
Let’s assume that you owe the IRS several thousand of dollars and you have been avoiding them for several years. If your Social Security is linked to the bank account, they will find you eventually. Even if you don’t agree that you owe it…….. if the IRS says you owe it then you really have the obligation to try to work out some kind of solution.
With an IRS bank levy, anything your SSN is attached to is up for grabs
Basically what it boils down to is that IRS can (and quite often will) be able to take cash out of your bank account, paycheck, savings, retirement accounts or out of any other source of cash you own. Unfortunately this happens to a lot of unsuspecting people every day.
What you need is an IRS Bank Levy Release
So can you get your IRS bank account levy reduced or possibly released by the IRS? Actually, believe it or not, yes you can. Can you get your bank to put the money back into your bank account so that you can pay your bills? Yes you can. But only if you meet some very specific requirements that the IRS has established. Negotiating with the IRS to release your bank levy or bank account garnishment is difficult.
Technically, your bank must hold your money for 21 days from the date they receive the IRS wage garnishment before they send those funds to the IRS. The wage levy affects only the money that is in your bank account on the day that the bank receives the IRS Form 668-W Notice of Levy on Wages, Salary and Other Income. For example, if your bank receives a wage levy notice on Monday for $1,250 and the balance in your account was only $750 then your bank is obligated to seize the amount of money that is in your bank account on that day up to $1,250. So the bank would seize your entire $750 and leave you with nothing in your account. However, you could make a deposit the very next day for any amount of money and the bank would not seize it……. so you could then have immediate access to any future deposits.
Then your bank would hold that $750 for 21 so that you would have the opportunity to talk to IRS and try to get the bank levy released. But keep in mind that IRS obviously would prefer to keep the money for themselves rather than return it to you. And before they will return it they will require you to give them a lot of personal and financial information and they will also require you to file all of your missing tax returns. It can get very tricky to get your money returned to your bank account, so you should be ready to lose the garnished money.
Hopefully this information will give you a good foundation and education on the IRS bank levy subject.