When the IRS engages in enforced collection of a tax debt it almost always begins with the taxpayer’s bank accounts and wages.
The Notice of Levy
The IRS will serve what is known as a Notice of Levy (the “Levy”) on all of the taxpayer’s known financial institutions and employers.
Generally, a bank must freeze your account for 21 days from the date of the Levy before it is required to turn over the funds to the IRS.
This gives the taxpayer, the bank and the IRS an opportunity to resolve the matter before the taxpayer’s funds are lost.
A wage levy takes effect immediately upon receipt and the taxpayer’s employer must pay over to the IRS the proper levy amount on each payday the levy remains in effect.
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Levies are a Last Resort
The IRS usually will not resort to the issuance of bank and wage levies until after it has made several attempts to contact the taxpayer and resolve the matter amicably through the use of a collection alternative.
Often our clients first contact with us is after the IRS has begun enforced collection and has issued either a wage levy, a bank levy or both.
We regularly help these taxpayers get their levies released; however, it is often a difficult job because the IRS, having been ignored by the taxpayer prior to our engagement, is now in no mood to make concessions to the taxpayer.
Advice and Recommendation
The earlier the problem is addressed the better are your chances of obtaining a favorable outcome.
Contact our office immediately upon receipt of the first IRS notice you get demanding payment of back taxes or requesting the filing of an unfiled return.