If a Federal Tax Lien has not been satisfied with payment of the tax debt, the IRS can issue a Notice of Levy to your bank to pay that debt. The IRS then seizes the money in your accounts, and they don’t even need to prove the debt with the courts, unlike private creditors. The bank will hold your money for 21 days from the date of the levy, allowing time for you to either pay or dispute the levy, but then they must send the funds to the Treasury.
Notification of an IRS Bank Levy
You should have ample warning on an IRS levy, especially since there has already been a tax lien on your bank account(s) for months. The IRS will try to notify you, mailing a Final Notice and Demand letter to the last address on your tax returns, but if it’s been a few years since you filed, it may be the wrong address. That’s why sometimes a levy may come as a surprise.
How to Stop a Bank Levy
If this is our first involvement in the case, the first thing we will do is verify the amount owed. The IRS is prone to err in their favor, but if we can prove the amount is in error, we may be able to dispute the amount of the levy. It can be a difficult fight, but we may be able to get additional time in order to address issues properly, or secure a Bank Levy Release on your behalf.
Wage Garnishment or Wage Levies
Wage garnishment or levies are the government’s second choice to a bank levy, simply because it takes longer to get paid. But, if a bank levy didn’t clear your debt, the IRS is perfectly willing to continually garnish your wages, and they have their own draconian formulas to calculate what it takes you to live. And again, unlike private creditors, the IRS doesn’t have to prove your debt in court and they are not limited to taking 25% of your wages. They have the ability to seize up to 70%!
Ways to Slow or Stop Wage Garnishment
We utilize many of the same strategies as other tax problems (plus a couple more!) for limiting or stopping wage garnishment, including:
- Verify the amount you owe and appeal
- Pay your bill, maybe with an installment agreement
- Make an Offer In Compromise
- Prove Currently Not Collectible (CNC) status
- File Bankruptcy
We definitely want to use those first three strategies in that list if possible. We have successfully solved thousands of bank levy and wage garnishment cases, and we are ready to help you with yours. Call Tax Clean Up today at (214)-617-2020.