Having your wages garnished or bank levied can be an upsetting event. A levy is the seizure of property, including money in your bank accounts, retirement accounts, your car and the garnishment of your wages. The Internal Revenue Service(IRS) will use a levy to collect the amount owed only after it sends you a notice demanding payment, you fail to pay the tax and it then sends you a final notice of its intent to levy your property. It is best to deal with the situation by dealing with the IRS directly. There are several different strategies that may be employed depending on your specific situation and your finances.
If the IRS levies your wages, salary, federal payments or state refunds, the levy will end when:
- The levy is released, normally after payment terms are set,
- You pay your tax debt in full, or
- The time expires for the IRS to legally collect the tax.
If IRS levies your bank account, your bank must hold funds you have on deposit, up to the amount you owe, for 21 days. This holding period allows time to resolve any issues about account ownership. After 21 days, the bank must send the money plus interest, if it applies, to the IRS.
However, normally once terms for repayment are set (i.e. Installment Agreement, Offer in Compromise) the IRS will stop all enforced collation actions such as a levy.
When you are ready to learn more about what we can do for you, we encourage you to contact us.