The IRS notifies your bank and you of a bank levy with Form 668-A(c), which is very similar in effect to Form 8519. The levy is not continuous and only affects the money in the account on the day the levy arrives. Form 668-A(c) can be used to seize life insurance, trusts, stock accounts, IRA's or 401(k)'s, etc. It is most often used for bank accounts.
Your bank will hold the money in escrow as frozen funds for 21 days before giving it to the IRS so you have some time to negotiate.
There are various reasons why your account has been levied so your approach to resolution will vary with the situation. In general, to get a release within 21 days you must:
- be current with your tax filings,
- disclose your financial situation &
- arrange an agreement with the IRS.
Even if it is discovered that you don't owe the tax, you'll still be required to fight IRS collections while preparing the documents to prove your case. It is very time-consuming and aggravating.
Each step in that process has traps and pitfalls to avoid. But, the case is NOT over. After you get the levy released, we still need to devise an Action Plan to reduce or eliminate this tax debt!
For more detailed information, please follow the Collections Prep Steps & contact Mr. Hopkins as soon as possible!