A Bank levy is the IRS’s right to collect the amount owed by a taxpayer. Under the provision, the IRS freezes the funds available in the defaulter’s bank account. Even though a bank levy is one of the most extreme tactics used by the IRS to collect outstanding payments; the good news is, taxpayers have ways to avoid the situation.
In this post we provide an overview of the scenarios in which the IRS may release a levy, and what taxpayers need to do to find their way out of the problem. Read on.
Scenarios in which the IRS can Release a Levy
The IRS releases a levy when:
- The taxpayer has paid the owed amount, in full.
- The collection of debt is completed before the issuance of the levy.
- Releasing the levy can help taxpayer pay off the debt
- Taxpayer enters into an installment agreement, which does not allow levy to continue.
- The levy creates an economic hardship for the taxpayer
NOTE: If any amount was sent to the IRS before the release of the levy, you can file a claim to get the money back.
The Way Ahead
The IRS issues a notice to the taxpayer before placing a levy on their assets. In most cases, a bank levy can be avoided by acting while there is still time and informing the IRS about your intent to pay off the debt. The best way to communicate effectively with the IRS is through an IRS tax lawyer. Hire an experienced lawyer who can help you deal with the issue.
The Bottom Line
If you find yourself at the receiving end of a bank levy, hire an experienced IRS tax lawyer who can help guide the way to a resolution. The attorneys at the Law Office of Nick Nemeth have extensive experience in helping taxpayers resolve of IRS tax related problems. For a free consultation, simply call (972) 426-2553 . Alternatively, fill out our contact form and we will take it from there.