Bank Account Levy - When The IRS Raids Your Bank Account
The Internal Revenue Service is one of the most powerful institutions in the world. The organization is responsible for collecting taxes from individual taxpayers and businesses. A business entity can get into trouble with the I.R.S. for a number of reasons. Most new business owners are unaware of the laws surrounding payroll taxes. Some business may not know how to conduct proper withholding from employee paychecks. Businesses sometimes use funds that they should be sending to the I.R.S. for operations, investments and other purposes. The I.R.S. has the right to collects its money by any means necessary. Unfortunately, sometimes the I.R.S. will use a bank levy to do such.
What Is A Bank Levy?
A bank levy or a tax levy is one of the most aggressive collection methods that exist. It involves complete and total seizure of a consumer's or business’s bank account. The funds in the account may contain investment profits, payroll funds, part-time job earnings, gifts and more.
However, the I.R.S. can take everything in an account no matter where the money came from. Banks cannot protect consumers or businesses when it comes to tax levies. Therefore, a business or individual must take steps to prevent the levy from occurring before it gets to that.
How To Prevent A Bank Levy
The best way to prevent a bank levy is by taking steps to resolve the debt long before it reaches default status. The I.R.S. gives a person notice of a debt immediately after it discovers the debt. The person has ample time to correct the mistake, which is why the organization’s recovery efforts are so aggressive when they occur. The consumer or business owner can directly contact the I.R.S. and request a payment plan or installment agreement. The I.R.S. is generally willing to accept installment arrangements, and the organization will not impose any garnishments or levies as long as the person sticks to the arrangement that he or she promised. A person who owes the I.R.S. money can contact a bank levy attorney to help prevent a levy. The attorney can draft a formal installment agreement and have someone from the I.R.S. sign it so that it stands correctly in court. Such an attorney can include information that specifies the exclusion of bank levies if the taxpayer abides by the rules set forth in the agreement.
What To Do If You Receive A Notice Of A Bank Levy
A consumer or business owner must act quickly if he or she receives a notice of bank levy. Sometimes, the bank account is already frozen when the person receives the notice, and sometimes it is not. The person must immediately contact a bank levy attorney. The attorney will schedule a consultation as quickly as possible so that the prospective client can discuss the issue with him or her. An experienced attorney can develop the best plan for the consumer to recover his or her monies. A bank levy is a serious situation that can make or break a business. Contacting an attorney in a timely fashion can save a company from destruction.