Levy Release

Tax liabilities and levies on your financial accounts. The Internal Revenue Service (“IRS”) has a certain process that they must adhere to in order to collect taxes that are delinquent. They also follow a process to release bank, and other, levies on your finances.

An IRS levy on a financial account can leave you unable to pay your bills, your rent or mortgage, your car payment, or feed your family. Although it seems as though it came out of nowhere, levies on your finances are usually forewarned. You go to the bank to take out cash, or you present a debit card at the grocery store, or you try to get gas for your vehicle and you are rejected. There is a notice to “please call the bank”. Your IRS levy has come to fruition.

If you ignore IRS notices, phone calls and letters, the IRS will begin the process of an Enforced Collection. It is a way for them to, finally, get your attention and collect delinquent taxes. The IRS has no problem finding your money. They associate your Social Security number(s) in databases and the information pours in from banking institutions, property, stock and bond accounts. Seizure of your bank account is the final action in their process to collect the taxes you owe.

The IRS sends a Notice of Levy to the financial institution informing that you owe taxes and requires them to freeze all the money in your account(s) as of that day. All accounts associated, in any way, with your Social Security number will be frozen. Checks & ACH Debit payments will be returned as unpaid and overdraft fees will build up. The bank, per the Notice of Levy, will hold the funds for twenty-one (21) days. The IRS is still open to the idea of solving this tax liability issue within the 21 days period before they seize the bank funds permanently. Now is the time for you to truly dig in and work this process to a good conclusion by getting the levy released.

Contact the IRS immediately to resolve your tax liability and request a levy release. The IRS can release the levy if it determines that the levy is causing an immediate financial hardship .If the IRS denies your initial request to release the levy, you may appeal that decision. An appeal may take place before, or after, the IRS places a levy on your wages, bank account or attainable property. As with most legal and financial situations, the quicker you move towards a solution regarding your tax delinquency, the easier a positive result will present itself. It is easier to dig your way out of a shallow hole than a deep one.

Even after the levy proceeds have been sent to the IRS, you may file a claim to have them returned to you. Additionally, you may appeal a denial by the IRS of your request to have the levied property returned to you.

Tax delinquencies, whether with the IRS or your particular State, are not going to magically go away. A good rule of thumb relating to contacting the IRS to solve a tax liability is earliest. The earlier you jump on the problem, the more flexible the IRS will be in determining a reasonable solution for all concerned. The IRS is required to release a levy if it determines one or more of a few scenarios: (1) You paid the amount you owe previous to the levy going into effect; (2) the period for collection ended prior to the levy being issued; (3) the novel idea that releasing the levy will actually enable you to pay the taxes due; (4) you worked through your issues and entered into an Installment Agreement with the IRS and, as part of your agreement, the IRS had to release the levy; (4) you demonstrate that the levy creates an economic hardship that prevents you from meeting very basic living expenses; or (5) the value of the property being levied is in excess of the amount of delinquent tax and releasing the levy does not impinge on the IRS’s ability to collect the tax amount owed.

The release of a levy does not mean that you are released from the responsibility of any tax that may remain due. In order to prevent a levy from being reissued, you must follow through with any agreements established between you and the IRS.

Earliest is easiest.