What Is a Bank Levy
March 14, 2013 By Law Offices of Stephen B. Kass, PC
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Imagine getting a letter in the mail informing you that your mortgage payment has been rejected by your bank for insufficient funds. This may be because your bank account has been levied by another creditor whom you owed money.
The state or federal government can place a bank levy on your bank account if you are delinquent in the payment of your tax debt. A levy is a legal seizure of property to satisfy a tax debt. A bank levy allows the government to take money directly out of your bank account.
The Internal Revenue Service (IRS) has the authority to issue a bank levy without a court proceeding. Even if you think you have a legitimate excuse for your nonpayment, the IRS can still issue a bank levy without giving you the chance to be heard.
The IRS sends a letter called a Notice and Demand for Payment to your bank. The notice informs the bank that the IRS is freezing your bank account, and orders the bank to freeze any and all accounts you have and turn the funds in the accounts over to the IRS. In this way, the IRS can seek to recoup payment for back taxes.
The bank must comply with the orders contained in the IRS’s notice of levy. They have no control over the levy being issued. For the taxpayer, this means he or she will not be able to access any of their bank accounts or the funds in them. The IRS can similarly restrict the taxpayer’s access to all accounts and order them turned over to the agency. Retirement accounts like 401Ks, wages and insurance proceeds can all be subject to IRS seizure. The IRS can also issue levies on property including cars, boats and houses.
Because of the severe consequences of a bank levy, if you owe back taxes or have already had a levy or lien issued, you should contact an attorney immediately. An attorney can help you protect your assets and property from the IRS in emergency situations. The attorney will help you negotiate with the IRS to achieve a resolution that enables you to continue your life without much interruption to your financial life.
AUTHOR: Stephen B. Kass
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More information about Law Offices of Stephen B. Kass, PC
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
The Internal Revenue Service (IRS) has the authority to issue a bank levy without a court proceeding. Even if you think you have a legitimate excuse for your nonpayment, the IRS can still issue a bank levy without giving you the chance to be heard.
The IRS sends a letter called a Notice and Demand for Payment to your bank. The notice informs the bank that the IRS is freezing your bank account, and orders the bank to freeze any and all accounts you have and turn the funds in the accounts over to the IRS. In this way, the IRS can seek to recoup payment for back taxes.
The bank must comply with the orders contained in the IRS’s notice of levy. They have no control over the levy being issued. For the taxpayer, this means he or she will not be able to access any of their bank accounts or the funds in them. The IRS can similarly restrict the taxpayer’s access to all accounts and order them turned over to the agency. Retirement accounts like 401Ks, wages and insurance proceeds can all be subject to IRS seizure. The IRS can also issue levies on property including cars, boats and houses.
Because of the severe consequences of a bank levy, if you owe back taxes or have already had a levy or lien issued, you should contact an attorney immediately. An attorney can help you protect your assets and property from the IRS in emergency situations. The attorney will help you negotiate with the IRS to achieve a resolution that enables you to continue your life without much interruption to your financial life.
AUTHOR: Stephen B. Kass
Copyright Law Offices of Stephen B. Kass, PC - Google+
More information about Law Offices of Stephen B. Kass, PC
View all articles published by Law Offices of Stephen B. Kass, PC
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
