Tax Relief Blog
IRS-FTB-EDD-CDTFA-BOE Bank Levy Tax Relief
What is a bank levy?
Are you a Los Angeles taxpayer, or a business that got notified of a bank levy? Want to stop and release the levy? Let’s start our discussion with what is meant by an IRS Levy, the term levy is the legal seizure of any property or asset that you hold or have an interest in so that a tax debt you owe to the IRS can be satisfied. This can be bank accounts in or outside of Los Angeles, other business assets and much more. When the IRS, FTB, EDD, CDTFA, BOE has determined that a bank levy is its best course of action in order to satisfy your tax debt, they have the authority to do so and do not need to seek a court order to proceed.
Legal Notification and help to release and stop your bank levy
While the IRS has the authority to use its levy power, it must, however, send you a Final Notice of Intent to Levy and Your Right to a Hearing letter. If you have received this letter you must reply if you hope to avoid the levy being enforced and the IRS seizing your bank accounts to secure payment of the tax debt that you owe.
Get help to release your bank levy today 877-788-2937.
In 1988 as part of Taxpayer Bill of Rights I, Congress passed section 6332(c) which requires banks to hold the proceeds subject to a bank levy for 21 days. The purpose of the 21 day holding period is to give joint account holders time to come in during that period and prove to the IRS that some or all of the money in the bank account belongs to them rather than to the taxpayer.
The notice of bank levy only reaches the amount on deposit when the levy is received. Money deposited later is not surrendered, including deposits made during the holding period. Another levy must be served to reach these funds. Also, the bank levy only reaches deposits that have cleared and are available for the taxpayer to withdraw. The bank may not reduce the amount it pays to the Service by a bank processing fee or any other fee. The Service’s view of the bank’s duty to locate accounts under various names can be seen in I.R.M. 5.11.4.10.1.
IRS Stats:
Taxpayer delinquent accounts: 14,005,000, that is over 14 million taxpayers with unpaid back taxes
Notices of federal tax liens filed: 446,378 just in 2017
Notices of tax levies issued: 590,249 just in 2017
What steps the IRS takes before it resorts to a bank levy
Contrary to popular opinion, the IRS does not resort to draconian measures to force business taxpayers to comply with their demands that you pay them for a tax debt. There are three distinct steps that they must do in order to be able to use its levy authority. While it has the legal authority to levy bank accounts based on the IRC 6331 or Internal Revenue Code 6331, it must do the following three things first:
● The IRS has determined that the tax debt is owed by you and has sent you a Notice and Demand for Payment letter
● You did not pay the debtor refused to comply and pay the debt
● They have sent a Final Notice of Intent to Levy and Your Right to a Hearing letter and 30-days has passed.
As you can clearly see that while the IRS does have the ultimate power to seize any and all assets (except those that have been exempted to rules) in order to satisfy a tax debt, they do in fact use it only as a last resort.
IRS-FTB-EDD-CDTFA-BOE Bank Levy Tax Relief
Can a bank levy be released or stopped? Get help today!
Under certain circumstances an IRS bank Levy once enforced can be released, but only after certain requirements have been determined to have been met. The following is a list of the things that can lead to having an IRS bank levy released:
● You actually paid the amount that you are being asked to pay
● The period of collection ended before the levy was enforced
● You need the levy released in order pay the tax debt
● You have agreed to an Installment Plan with the IRS to pay back the tax debt
● The levy has created an actual hardship on you and your family as determined by the IRS, FTB, EDD, CDTFA, BOE
It is extremely important for you to realize that just because the IRS bank levy was released or stopped, it does not mean that you are free from paying back the tax debt that you owe. It simply means that it recognizes that the levy was not the best course of action in your case.
Get help to release and stop your bank levy today 877-788-2937.
Our boutique tax representation firm led by Mike Habib serves and helps individual and businesses in greater Los Angeles, Santa Monica, Beverly Hills, Whittier, Pasadena, Lancaster, Long Beach, Santa Ana, Irvine, Newport Beach, Orange County, Inland Empire, San Bernardino, Upland, Claremont, Rancho Cucamonga, Fontana, Ontario, Corona, Riverside, we offer the best nationwide bank levy defense service.
