Bank levies are one of the most powerful tools the IRS uses to collect tax debt. They can be devastating, making normal day-to-day living impossible. One moment your ATM card may be working fine, and the next minute it may stop working altogether.
If you receive threatening letters from the IRS concerning your tax debt, you need to act quickly. If you receive a letter entitled “Final Notice of Intent to Levy,” the IRS is informing you that they intend to levy your bank account. This means that they are freezing your account. If your account is frozen, you won’t be able access your account until the levy is lifted.
When the IRS freezes your account, you will have 21 days before they seize all of the money out of your account. Take advantage of this short time and take the necessary steps to protect your money.
Ways to Stop a Bank Levy:
- Hardship Plan: Send a letter to the IRS with evidence proving that if they levy your bank account you will not be able to meet the standards of basic living.
- Payment Plan: Negotiate a payment plan (usually in the form of an Installment Agreement or Partial Payment Installment Agreement) with the IRS in which you will pay a monthly amount on your debt. The bank levy will be removed as long as you continue to pay monthly and on time.
- Negotiate a Settlement: It will be hard, but it’s possible to negotiate a settlement with the IRS to have your debt quickly paid in one lump sum. It’s a good idea to speak with a tax professional if you want to pursue this course of action.
It’s your choice: You can let the IRS seize the funds in your bank account, leaving you penniless, or you can act fast and make the right choices. Use these tips to your advantage; with some effort on your part you can become debt free.