Can The IRS Take Money From My Bank Account Without Notice?

Can The IRS Take Money From My Bank Account Without Notice?

An IRS bank levy is when the Internal Revenue Service (IRS) directly takes money from your bank account to pay for owed taxes. While it may come as a surprise to some, it is a legal procedure. The IRS is a government agency in the United States that collects taxes and enforces tax laws. When a taxpayer neglects to pay their back taxes after receiving notifications and inquiries from the IRS, the government may need to take matters into its own hands. They may take the money out of your bank account to cover the taxes you owe if you don't pay them back.

The IRS typically only employs this radical solution as a last-ditch effort. Nevertheless, if you receive notification that the IRS plans to seize your accounts, time is of the essence. At Ideal Tax, we can help obstruct the process and prevent them from taking money out of your account. Our consortium of knowledgeable Ideal Tax bankruptcy attorneys would be more than happy to discuss your options with you and devise an effective legal strategy tailored specifically to you and your needs.

What Is An IRS Bank Levy?

The IRS is legally allowed to take money out of your bank account to cover any owed taxes through a process called levying. The IRS usually employs this measure as a last resort when all other attempts to settle the debt have been exhausted. A bank levy involves the direct seizure of funds from any accounts held at banks, credit unions, mutual fund companies, or brokerages. This money can be taken without prior notice, so it’s important to stay ahead of the curve by staying up-to-date on your tax obligations and taking proactive steps to settle your debt before the IRS has to take measures into its own hands.

Will The IRS Seize Your Bank Account Assets?

Will The IRS Seize Your Bank Account Assets?

Depending on your specific situation, the IRS might seize your bank account assets if you don't pay your back taxes. However, they generally take into account several factors - such as income level and other financial obligations - before resorting to this measure. If you're worried about the possibility of a bank levy, you can always contact Ideal Tax for a free review of your case. We'll help you determine the best course of action to take, so you can rest assured that your assets are safe.

Can The IRS Take Money From My Bank Account Without Notice?

How Does The IRS Determine Which Bank Accounts To Levy?

The Internal Revenue Service (IRS) has several tools at its disposal for collecting unpaid taxes, including wage garnishment, seizure of assets, and levying bank accounts. In the case of bank account levies, the IRS will first send a notice to the taxpayer informing them of the impending levy. This notice, known as a Notice of Levy on Wages, Salary, and Other Income, generally takes the form of Form 668–A(C)DO.

The taxpayer then has a set period - typically 21 days - to take action to prevent the levy from being carried out. If no action is taken, the IRS will send a notice to the taxpayer's bank informing them that they are required to freeze the funds in the account and turn them over to the IRS. The bank must then comply with this request, and the funds will be turned over to the IRS. The taxpayer will then have another opportunity to contest the levy or take other action to satisfy their tax debt. If no action is taken, the funds will be applied to the outstanding debt and any remaining balance will be returned to the taxpayer.

What Can You Do If The IRS Seizes Money From Your Bank Account Without Notice?

What Can You Do If The IRS Seizes Money From Your Bank Account Without Notice?

If the IRS seizes money from your bank account without notice, you may be able to get the levy released. An experienced tax attorney can help you determine if you qualify for a release due to financial hardship. If your account has already been levied, an attorney can also help you file a claim for reimbursement. There are a few exceptions where the IRS is not required to issue the 30-day Final Notice of Intent Levy, such as when they believe the money in the account is derived from illegal activities. In these cases, it is especially important to have an attorney on your side to protect your rights and ensure that you are treated fairly by the IRS.

How Often Are You at Risk of an IRS Bank Levy?

Federal income tax debt is only allowed to be active for a 10-year statute. If any debts are older than 10 years, the IRS isn't able to collect the funds from your bank account. On the other hand, if the debt is younger than 10 years, there's no limit on how many times or assets they can levy.

Take note that a levy on your bank account is not an ongoing process. Once the funds have been transferred to the IRS, your bank returns to its normal state. The IRS would need to start the process over again if they want to Levy your account a second time.

One of the harshest penalties levied by the IRS is a levy on assets. This method is generally only used when the taxpayer does not respond to other methods of contact, such as phone calls or letters. If you do make contact with the IRS and reach an arrangement (and stick to it), they will usually not pursue a levy. Bear in mind that receiving voluntary payments is much less time-consuming for the agency, so they would prefer this over having to take legal action for forced debt collection.

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Final Thoughts 

In short, if you're wondering 'Can the IRS take my money from the bank?', the answer is yes, but only if you have an existing tax debt and make no attempts to work with them on a repayment plan. If the agency levied your account, you then have 30 days to come up with a solution. If not, the IRS will send a notice to your bank to freeze your accounts and send them any amount after 21 days -- this could include draining it completely.

The levy will stay in effect until you can convince the IRS it is causing severe financial problems for you. If the agency made an error or overcharged you, you can get your money back--but only after sending what was originally owed.