In this article, you will discover:
- Typical warning signs that precede an IRS bank levy in the Carolinas.
- How a bank levy works once your bank account is frozen.
- How long a bank holds your levied funds before forwarding them to the IRS.
What Warning Signs Typically Precede An IRS Bank Levy In The Carolinas?
Once the IRS assesses a balance, you’ll receive an initial Notice of Assessment. Following that notice, you’ll continue to receive further notices, each a little more threatening than before, until you receive a Final Notice of Intent to Levy.
IRS balance-due notices serve as early warnings, but once a Final Notice of Intent to Levy is issued, the IRS has the authority to seize your wages, bank accounts, and other assets unless you formally exercise your appeal rights.
Once you receive the Final Notice of Intent to Levy, you cannot protect your assets or income from levy unless you submit an appeal. You have formal appeal rights, but if you don’t appeal or fail to appeal in a timely manner, your bank account may be levied and your wages may be garnished.
How Does An IRS Bank Levy Work Once My Account Is Frozen?
The IRS will send a copy of the levy to the bank and to you simultaneously. Typically, it’s a one-time levy, meaning the funds in the account at the time of the levy are frozen for 21 days. At the end of that timeframe, the bank is required to remit those funds to the government, up to the amount of the levy.
With a one-time levy, the bank only freezes funds that are in your account at the moment the levy is received, up to the levy amount. Suppose you have $30,000 in your bank account, and your levy is $20,000, the bank will only hold $20,000. Any deposits made after that are generally not subject to the levy.
Similarly, if you have $30,000 in your bank account and the levy is $40,000, the bank will freeze the $30,000 available at that time. If you deposit an additional $20,000 the next day, those funds typically would not be subject to that one-time levy.
A continuous levy works differently from a one-time levy. Instead of applying only to the funds in the account at a single point in time, it remains in effect and captures additional deposits going forward. As a result, funds deposited after the levy is issued are generally subject to the levy until the full amount is satisfied or the levy is released.
Attorney Margaret “Laurin” Dukes is a skilled lawyer based in the Carolinas who has helped numerous clients like you navigate the intricacies of tax law. With years of experience, she is prepared to assist you in dealing with IRS bank account freezes by providing effective strategies to have them released.
Still have questions? Ready to get started? Contact Ecton Law Firm, PA, today to schedule an initial consultation.
How Long Does My Bank Hold Levied Funds Before Sending Them To The IRS?
In most cases, when a bank receives a levy, it is required to place a hold on the funds subject to the levy for 21 days before remitting them to the IRS.
What Immediate Steps Should I Take Within The First 24 To 48 Hours After A Bank Levy?
Contact your bank immediately and request a copy of what they received to confirm the date of receipt, the exact amount of the levy and the holding period for the funds.
Your goal will be to work with the IRS to secure a release within that 21-day holding period. To do that, you’ll need to provide some financial information to the IRS to demonstrate that the levy will create an economic hardship and negotiate a release. To that end, be prepared to provide at least three months of income and expense documentation.
How Can Working With A Tax Resolution Attorney Help Me Release A Frozen Bank Account Quickly?
A tax resolution attorney can confirm that the IRS actually followed all the required procedures necessary before issuing a levy, such as providing notice and appeal rights. If these protocols aren’t followed, it could mean that the levy was issued improperly and is therefore invalid.
A tax attorney will also know the best way to contact the IRS, whether that’s an IRS division or the specific agent that issued the levy. We have a working relationship with many of these agents, and we know how to contact them quickly.
If you’re operating within a maximum 21-day window, and assuming you receive your copy of the levy a few days after the bank does, you may realistically only have around two weeks to resolve the issue before the bank is required to remit the funds to the IRS.
We understand exactly what the IRS requires to release a levy, including how to prepare a financial statement and what supporting documentation needs to be gathered. When you’re working with a timeframe of only three weeks to secure a release, submitting incomplete or incorrect information to the IRS can delay the process.
Still Have Questions? Ready To Get Started?
For more information on IRS bank account freezes, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (803) 771-9800 & (980) 677-1099 today.
