The IRS uses bank levies as a tool to collect tax payments. If you owe tax money and you are unable to or choose not to pay it, the IRS has the power to take it directly from your bank account. Having a bank levy is something that can leave you feeling powerless and in a position where day-to-day living is nearly impossible, especially if your financial situation is already tenuous.
You will receive a letter notifying you of the upcoming levy from the bank. Receiving the letter is a warning and should cause you to take action and determine what you can do to prevent the levy. If you wait and the levy occurs, you will have only 21 days to resolve the matter before the bank seizes all of the money in the account. As unpleasant as it might be, you need to deal with the situation as soon as possible and do all you can to prevent the government from leaving you in a desperate situation.
What Can You Do Once You Receive Notice of a Bank Levy?
The first thing you need to do when the levy notice arrives is contact an attorney who understands bank levies and tax payments. He or she will help you make the best decision, despite your limited options.
What are your options?
File a Hardship Plan Request
You can send a letter to the IRS proving a bank levy would prevent you from meeting standard basic needs. If you have only enough money to meet the basic standard of living, the IRS might give you some leeway.
Arrange a Payment Plan
Negotiating a payment plan allows you to pay you tax debt gradually. You will need to make monthly payments and if you do not meet these monthly obligations, you can expect the IRS to be harsh. However, setting up an Installment Agreement can stop them from freezing your account.
Negotiate a Settlement
Sometimes the IRS is willing to work with you to pay less than you owe, if you are willing to make a lump sum payment. This is not an option for everyone because most people who were unable to meet their tax obligations do not have enough available to make a large enough lump sum payment to the IRS. However, if you work with an attorney familiar with IRS practices, you might be able to create an arrangement that satisfies everyone involved.
Your final option, of course, is to let the bank seize the account and deal with the consequences. Obviously, this is not the ideal solution, but it has potential to satisfy your tax obligation, depending on the amount in the account.
Have you received a notice of bank levy from the IRS? Do you expect the IRS to take action because of back taxes you owe? You need the support and guidance of someone who understands. Contact the Law Offices of Robert M. Geller at 813.254.5696 to discuss your tax debts and determine your next step.