With an IRS bank levy, the IRS will contact your bank and freeze your bank account. After 21 days, your bank is required to send the funds plus interest. In many cases, the IRS may not levy your bank account and instead levy your wages. If you have enough money in your bank account to cover the taxes owed, the IRS will usually levy it.
Notice of an IRS bank levy can be delivered to you at any time but before a levy goes into effect. Of course, this is not something that the IRS does just for the fun of it. They are not going to move forward with a bank levy until they first try to collect taxes you owe in a more civilized manner. That being said, some people do not acknowledge notices from the IRS. If the IRS cannot get you to respond to their notices or come to a payment agreement with them, they will often times issue a bank levy. It is important to know that there are times when you can appeal an IRS bank levy. Do you know when this is something that you can do?
You have the right to appeal an IRS bank levy 30 days from the date you received the notice. You want to act quickly if you need to appeal it. To appeal an IRS bank levy you need to have a good reason. In other words, you cannot appeal just because you don't want to deal with the levy - you need to show the IRS that you have a good reason. Some arguments that can be used include:
There are two basic ways to appeal a tax levy. One is through the Collection Appeals Program and another through a Collection Due Process Hearing. In both cases, you must first contact the IRS manager from the unit you filed the levy against you. Setup a conference call first to see if you can come to a resolution. If you cannot come to a resolution, then you want to look at one of the two ways to appeal.
- The IRS made a procedural error when dealing with your case.
- You have paid all of your taxes and do not owe the IRS any more money.
- The IRS sent you a notice while you were in bankruptcy - this is not allowed.
- The statute of limitation on the IRS bank levy has expired.
- You were not given the appropriate opportunity to dispute the liability.
- You are already in an Installment Agreement which is still in tact without any default payments
- An Offer In Compromise was submitted by you before you actually received the notice
Collection Appeals Program
This is the quickest way and suitable before and after the IRS levies your bank account. To get started, you need to fill out Form 9423 and submit it to the IRS at once. Obviously, the sooner you appeal your IRS bank levy the better off you are going to be. Normally your bank account cannot be levied while the IRS appeal process is underway.
Collection Due Process Appeal
This is the second way to appeal a tax levy link bank account garnishment. This is an alternative if you have received a Final Notice of Intent to Levy and Right to a Hearing. Again, call the number on the notice first. If you can't come to a resolution with the IRS manager, In this case fill out Form 12153 and send it to the address on your notice if you feel you have good reason to appeal.
During the appeal process the collection of funds usually comes to a halt. This gives you time to work out the problem with the IRS, and hopefully get everything taken care of before any more money is taken. If you have any further questions about an IRS bank levy, including when you can appeal, you should hire a qualified and experienced tax professional.