Orange County IRS Levies – Bank Levies – Threats to Levy

IRS or State Levies should never surprise any taxpayer. If your are surprised, then you’ve probably been so depressed that you have been stacking your IRS letters and State of California letters —even the certified ones— UNOPENED in a pile that you promise yourself:

“I’ll deal with those when I have the funds to take care of all that…”

The IRS and State Tax Collection Agencies are made up of regular people, often our neighbors, and frankly, from all the former IRS agent books I’ve read, they all claim that they don’t want to rain down hell on you, the taxpayer. But if you ignore their letters. Well what’s that bumper sticker?
“S#!T HAPPENS”

The truth is, the IRS will send a you certified mail letter — a final notice of levy to the address they have on record for the year the debt was created. If —out of sheer terror— you opened that letter and are here at our website because of it, it may not be too late.


Are You Reading This Because You Are Looking at an IRS Certified Letter?

The prudent move is to chase down or another CPA here.

  • Call us. (855) 791-1950
  • If it’s really late use the Contact Us form on the side bar too.

If you are being levied because you have unfiled tax returns, Call us. If you are being levied because you’ve been battling the IRS by phone, email, letter, and they are pushing back, it may be time for you to call a tax attorney. Don’t know one? Call us, we know the best and the brightest – and NO – they are not totally unaffordable.

They are the government!   You are not… They WIN. You LOSE.   Sorry…

It’s not that we are not sympathetic. The IRS has police powers over ALL Americans that the CIA, NSA, FBI, and local police can only dream about.

  • Constitutional protections against illegal search and seizure – “foo-get about it…” (hear a New York accent in your head).
  • Protections against self-incrimination – foo-get about it.
  • Upshot. We are experienced CPAs and EAs. We are also fast, accurate and affordable tax return preparers. We don’t have a RED PHONE to God, though many of us went to Christian Universities. But we can still help you by getting your paperwork in order. Reach out…
  • We wish you the best of luck if you continue to procrastinate.
“I’m a believer in GOOD LUCK. The harder I work the more I have of it!”
― Thomas Jefferson

Back to those panicked people who opened a certified letter threatening levy.

We might be able to help. Especially if, until now, you’ve never talked to the IRS or the State Tax Agency causing you grief. Call us. Right away. If you are facing levy because you had your head in the sand, and you are aware that the tax folks need some tax returns, or some communication from you, like Thomas Jefferson said, with some hard work, we can get your paperwork in order — in FAST ORDER!

I’ll bet you a Snickers Bar we can call the IRS or whatever State agency you’ve annoyed -that is causing you grief- and negotiate ourselves a 30-60 day delay if we ‘pinky-promise’ them to be forthcoming in a few weeks with the tax returns or other information they are needing. It’s like tennis – a little back and forth. We can often work with the government and buy months of time to produce forms and work towards a resolution. With the tax people, it’s all about communication. They’re BIG on that…


Levies Can Be Disastrous

IRS levies and State Tax Agency Levies, can be disastrous — especially bank levies . Bank levies can cause critical checks (like rent or mortgage payments) to bounce, stack up bank service charges, and a loss of funds you need for daily living expenses. Levies can really do a lot of damage and even ruin your life. A bank levy is only good for the ONE day it is received by your bank. However, if you, like most folks, only have a little bit of money in your bank account when a levy was processed, you dodged a bullet.

A levy is the IRS’s not so subtle way to get your attention. What the IRS levy is communicating is:

“We have tried to communicate with you but you have ignored us. Do we have your attention now?”

Imagine waking up one morning and finding all your bank accounts have been cleaned out. They will take every dime. If this amount did not cover what is owed, they’ll keep taking your money until you cover your tax liability. They know that levying your bank account will cause checks to bounce, alerting many people that you have tax problems. But they don’t care! Their sole objective is to collect the taxes owed. Period.


Wage Garnishments

An IRS levy of your bank account might seem terrible, but a bank account levy pales in comparison to having your income garnished. That’s when a significant portion of your pay check goes to the IRS. It gets worse for non W-2 folks. If you are a 1099 “self-employed” contractor, the IRS can take 100% of your earnings! The IRS doesn’t have to leave you enough money to pay your bills. And worse of all, a wage garnishment continues each and every pay period until your tax debt is fully paid.

We Can Usually STOP a Wage Garnishment – By Communicating

The state or IRS will pay attention to a taxpayer who finally chooses to make contact with some sort of plan. If an accountant or tax professional starts to advocate to the IRS for a taxpayer, the IRS will recognize that you are finally taking them seriously and will almost always be agreeable to ceasing draconian type collection tactics such as bank levies and wage garnishments.


Wage Garnishments & Bank Levies Should be Avoided at All Costs

Both Wage Garnishment Levies and Bank Tax Levies are generally the result of poor communication between the taxpayer and the IRS or no communication (or response by the taxpayer to the escalation of collection efforts). I totally get why depressed taxpayers fail to communicate with the IRS and other tax agencies. It is human nature. Faced with economic issues and the feelings of powerlessness to take care of any current or old tax problems, many taxpayers will collect the envelopes —unopened— in a growing stack until some future time when circumstances might improve.

Unfortunately, putting ones head in the sand proves to be a foolish choice. A taxpayer might choose to ignore the IRS, but the IRS will not choose to ignore the taxpayer. No matter the taxpayer’s current dire circumstances, if you are being threatened with a wage or bank levy, or a levy action has begun, call us. If we can help, we’ll tell you, if we cannot, we can refer your to a local tax attorney who can.

Facts Taxpayers should know about IRS Bank Levies

  • IRS bank levies are only valid for the one day the levy is received by the bank.
  • The bank is required to hold whatever amount is available in your account that day —up to the amount of the IRS levy— and then send those funds it to the IRS in 21-days.
  • The typical IRS bank levy does not affect any future deposits made into your bank account. It is possible that the IRS will issue another Bank Levy if the first one came up empty or short of the tax owed.

What can the Taxpayer do if their Bank Account was Levied?

An IRS bank levy is not an open-ended action that vacuums up every dollar you or your employer might deposit to your bank account. The typical IRS bank levy is a one time only, day the bank receives the request, deduction (up to the amount of tax owed) from your bank account. You can read more about the laws in the Internal Revenue Manual 5.11.4.3.

Federal tax law gives the taxpayer a 21-day window to petition the agency to rescind the levy and have the funds being held released back to the taxpayer’s account before the bank forwards the levied funds to the IRS. This 21-day waiting period, mandated by Internal Revenue Code 6332(c), provides an opportunity for your accountant or tax professional to contact the IRS and negotiate a release of the levy so that the money being held in trust will be returned to your account.

Does my bank have to give me notice before freezing my account?

Unfortunately… No. The law provides that when the bank receives a levy notice, it must freeze your account immediately, before notifying you. That is why most people discover that their account is frozen when they try to use their ATM cards and they suddenly do not work.

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