Bank Account Levy

How to Deal With a Bank Account Levy

Screen Shot 2014-02-25 at 12.50.51 AMA bank account levy never fails to surprise and shock the affected party, especially when he goes to access his funds and instead finds the account balance reads zero or he gets a notice saying a levy has taken all available funds. This sort of embarrassing and frustrating problem occurs when either unpaid taxes have initiated a tax agency’s collection efforts or a creditor has secured a court-approved collection. The experience can make a person feel worthless and without rights, but there are legal protections and professional experts who can help.

IRS Levies

IRS Levies

Fortunately, ugly bank levy situations don’t happen out of the blue. However, they do tend to surprise affected bank account holders usually because the person did not see the advance notice or take his tax problems seriously. In either situation, a levy first requires approval of a court. In the cases of taxes, for example, the IRS will work repeatedly with a taxpayer, notifying him of the amount due and when it needs to be paid. Once the tax bill has reached a certain date of outstanding status only then will the IRS take a proactive step in seizing funds to pay off the amount owed. This frequently happens where a person overtly refused to pay, didn’t pay by a deadline, or refused to sign up for a payment plan. Once this trigger occurs, the IRS then initiates a freeze of the taxpayer’s known assets in banks and grabs the balance available. The banks are required by federal law to cooperate. To make matters worse, the account will continue to be frozen until the outstanding tax bill is paid in full, forcing the taxpayer more and more to have to deal with the IRS.

Private Levies

Private Levies

Bank levies are also not the specific domain of only the IRS. Private company collections can also take advantage of bank levies as a means by which to get money owed to them. Credit card companies are probably the most active in this arena. They first need to win a judgment in court, but once they do a bank levy can be established to recover their debt owed. The level and extent that this tool can be used varies by state. Additionally, some monies will be off-limits under federal or state law such as child support payments or federal benefits.


Levy Impacts

Bank levies can also cause quite a bit of havoc for an account holder and his bank as well. Banks are not fond of such forced contacts and, in addition to the problem of the levy itself, the bank may also fine the account holder for the levy occurring in the first place. This can feel like an insult on injury. Additionally, both the IRS and court-approved creditors and re-apply levies repeatedly until their outstanding collection is satisfied.

Additionally, levies will disrupt any outstanding checks or automatic payments that draw upon the affected account and have not been paid yet. The money the account holder set aside for such bills and payments will be gone, and the check demand or automatic payment will bounce. This will cause additional problems with payees suddenly feeling jilted by the account holder. It can result in bounced check fees with the bank as well as charges assessed by the aggrieved payee.

Given the above, it’s quick to see how a bank levy can escalate into a very large mess quickly. However, people caught in these uncomfortable and unwanted situations don’t have to roll over and accept them. Just because a levy is initiated doesn’t mean the target person is a criminal, nor should he allow himself to be treated that way. People have legal rights, even when they owe money or taxes, and there is expert assistance that can help tremendously.

Getting Help With a Levy

Fortunately, there is professional help.

Since the late 1960s TaxCite’s experienced and professional staff have been helping thousands of taxpayers and debtors resolve their issues with the IRS quickly and painlessly. Because the company employs tax attorneys, accountants, and enrolled tax agents, TaxCite has the knowledge and skill to professionally address tax problems as well as levies, big and small. TaxCite’s staff can get levies removed and garnishments eliminated quickly. The company can also help clean past tax filings so a customer is back in line where he needs to be with the IRS. This solution can be implemented in an expert manner if when a customer can’t find his old tax documents anymore. TaxCite has the know-how to find the paperwork and get taxpayers records straight permanently. People don’t need to suffer with ongoing or repeat levies or tax bills. TaxCite is the professional solution to a complicated problem with quick results.