The Internal Revenue Service (IRS) has the authority to levy bank accounts to collect unpaid tax debt. If you fail to pay your federal tax debt, the IRS can pull money from your bank account to cover the debt. According to tax experts, the IRS can take enough money out of your bank account to cover the entire debt you owe.
What Does It Mean When the IRS Levies My Bank Account?
An IRS levy gives the agency legal permission to seize your property if a federal tax debt has gone unpaid. Not only can the IRS take money out of your bank accounts, but it can also garnish your wages and seize your car, real estate, or other personal property.
If the agency levies your bank account, funds in the account are held for 21 days and then sent to the IRS. During this time, you won’t be able to touch the money. If nothing changes by the end of that period, the bank sends the funds to the IRS.
When Can the IRS Take Money Out of Your Account?
The IRS can take money out of your bank account to cover an unpaid debt only after four conditions are met: the IRS sends you a tax bill, you neglect or refuse to pay the tax bill, the IRS sends you two documents – the Final Notice of Intent to Levy and the Notice of Your Right to A Hearing – at least 30 days before imposing a levy, and the IRS sends notices to third parties to seek information about your tax debt.
If you still haven’t paid your tax bill or arranged to settle your debt after all these steps have been taken, the IRS can decide a levy is the next appropriate action. You can stop an IRS bank levy by taking action on overdue-tax notices, paying off the debt in full, negotiating with the IRS during the 21-day account freeze, or working with the IRS to pay off the debt during the 30-day period after receiving the Final Notice of Intent to Levy.
Original reporting: Alexandria, VA News – WTOP News — read the source article.
