IRS Bank Account Levy Frequently Asked Questions (FAQs)

bank levy faqWhat is an IRS Bank Account Levy?

  • A bank account levy is the legal seizure of funds from your bank account to satisfy taxes owed. The IRS requests a bank to freeze a bank account and to send over the money to them. The bank obeys the IRS because the IRS can legally hold the bank liable for that money if they do not comply.

How can a tax professional help with an IRS levy?

  • A tax professional typically can be the difference between you keeping your money or losing it to the IRS in a bank levy situation. A tax professional can quickly analyze your financial and tax situation and figure out the best course of action for you. The tax professional can then make the appropriate filings on your behalf to stop the bank levy and resolve your tax problems.

Can an IRS bank account levy be stopped once my account has been frozen?

  • Yes a bank account levy can be stopped once a bank account has been frozen. You must act quick because the bank will send the money over to the IRS after 21 days of the account being frozen. Find more information on stopping an IRS bank account levy.

Can I get back the money the IRS seized from my bank account?

  • Most likely you will not be able to get the money back that the IRS has seized from you account. The money seized from the bank account will be used towards the amount of tax debt that you owe the IRS. If you want to make another arrangement with the IRS you must do so before 21 days after the first day the bank account was frozen.

What if I can’t pay my other bills since my account is frozen?

  • The IRS doesn’t care if you can’t pay your other bills unless you prove it to them. You must prove financial hardship to them if you will be left without enough money to pay your other bills that are required for food and to put a roof over your head.

How can I avoid an IRS bank account levy?

  • You can avoid a bank account levy by keeping in good standing with the IRS. Even if you cannot pay your taxes in full you must work with the IRS on some other arrangement to show that you will pay them back.

What are the IRS rules / laws on IRS bank account levies?

  • The IRS must send a final notice of intent to levy and notice of your right to a hearing at least 30 days before they can begin to levy your wages.
  • The IRS must have assessed a tax liability and sent you a notice to demand payment prior to the levy.
  • You must have neglected or refused to pay the amount that was assessed by the IRS.