IRS Bank Levy
What is an IRS Bank Levy?
An IRS bank levy is when the IRS will randomly freeze money from your bank account and apply whatever is frozen to a tax debt that is owed. The bank is contacted by the IRS and is told to hold whatever funds are in the account at a specific point in time and give that amount to the IRS.
The amount that is requested to be frozen is either the full tax debt amount owed or the amount that is in the account (whichever is less). The bank holds that amount for about 3 weeks and then delivers that amount to the IRS as requested.
The bank will not be able to help you in this situation because their hands are tied. If they don't adhere to the IRS request, they can face potential punishment.
How to End an IRS Bank Levy
If an IRS bank levy has been issued, it's possible, although challenging, to release it. Before anything can be done, an agreement must be made between the IRS and the taxpayer to settle the tax debt. Once made, the IRS can issue a release to the bank.
There are creative ways our experienced tax professionals know in order to expedite this process of releasing the levy that are not known to taxpayers (or even other tax professionals).