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Do you know what a bank levy is?

A bank levy is legal right of the Internal Revenue Service (IRS) to attach any funds in your bank account to pay for unpaid tax debt. Once the levy has been issued, the bank must hold the funds for 21 days before the funds are released to the IRS. The following are some facts you should know if you have a bank levy or someone you know has a bank levy:
1. Once the IRS issues a bank levy, the IRS allows mailing time for the bank levy to be released by the bank. For example: If the IRS issued a bank levy today, the date on the levy notice would probably be 5-7 business days out.
2. The bank can only holds the funds for the day the bank levy has been issued. For example: if the bank levy is issued for 09/30/2019, the bank will only freeze any amounts in the account for that day. If you have deposits coming in before or after 09/30/2019, you should be able to use your account.
3. Each state has its own separate holding period. If the bank levy has been issued by the state, please check with the state on the requirement of how long the bank will hold the funds. For California, the holding period of the bank levy is 10 days.
4. For an IRS bank levy, the bank will hold the funds for 21 days to allow you to obtain a release from the IRS. In order to obtain to the release on the bank levy, it is important to know the amount in your account being held, the bills you are unable to pay because of the levy, and the date the bank is to send the funds to the IRS.
If you have a bank levy, it is best to hire a tax professional who is an expert at obtaining bank levy releases. In my resolution experience, release of a bank levy is one of the hardest releases to obtain from the IRS, but it is not impossible. It is very important to hire the right firm to not only help keep you out of collections, but also to resolve your tax debt. At Lifeback Tax, this what we do and we love helping our clients.

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