The IRS has the ability to levy or take cash from the taxpayer’s bank accounts to satisfy unpaid tax debts. This is within the IRS’s administrative powers. The IRS does not have to obtain court approval to do this.
The bank levy is one of the first enforced collection actions the IRS takes, as it is relatively easy for the IRS to locate the taxpayer’s bank accounts. Bank levies are particularly troublesome as they can result in overdrawn accounts (for checks that are in the process of clearing) and leave the taxpayer with little to no funds to pay for their basic living expenses.
Taxpayers often find out about the bank levy from their bank. The bank is not able to send the cash to the IRS until after 21 days of receiving the levy. This allows the taxpayer a precious few days to try to deal with the levy.
There are a number of ways to address IRS bank levies. We can help with this. We advise clients on collections issues such as bank levies daily. Please contact us immediately if the IRS has levied on your bank account or you think it will soon.