IRS tax levy bank account disasters are both inconvenient and frustrating. Ramifications include, but are not limited to: bouncing checks and bank overdraft fees, along with other bank imposed service charges, as well as, of course, the anxiety over how you will be able to meet day to day expenses while there is a levy on your bank account. You may also have to deal with late fees and even service interruptions in regards to your utilities, returned check charges imposed by those you do business with, and a multitude of other similarly unfortunate inconveniences.
Fortunately, IRS tax levy bank account disasters can be abruptly headed off in some cases. Tax laws require your bank to “hold” the money taken from your account for 21 days. It is not sent off to the IRS immediately. During this three week period, you have the opportunity to get in touch with the IRS and work out an arrangement to have the levy released. Once this is accomplished, the money will be returned to your bank account.
Another thing to understand about IRS tax levy bank account guidelines is that a bank levy does not allow money to be taken from your account day after day. If your bank account is levied, the bank will deduct money only once. In order to take more money, another levy would have to be attached.
It goes a little something like this: It is Monday and you have $643.51 available in your bank account. The bank receives the IRS levy. They process it immediately, deducting $643.51 from your account and placing it on hold, as required by tax law, for 21 days. Tuesday morning you deposit $150.00 and guess what? It stays right where you put it; it is yours.
If you do not make arrangements with the IRS to have the levy released, $643.51 will be sent to them at the end of the 21 days. If you are able to appease the IRS and convince them to release the levy before the 21 days are up, the $643.51 is returned to your bank account instead of forwarded to Uncle Sam.
