When the IRS freezes your bank account due to tax debt, it quickly makes your tax trouble especially urgent.
After all, you probably don’t have cash stuffed in your mattress or gold hoarded somewhere in your house. An IRS levy against your bank account can therefore undercut your access to the money you need to meet your most basic needs.
How should you respond to a freeze on your account so that you can avoid an actual seizure of your funds? In this post, we will address that question.
The IRS cannot immediately take your account. Even if you have unresolved tax debt, a collection action aimed at your bank account starts not with a seizure of the funds, but with a freeze on them.
The IRS can put this freeze in place by issuing something called a levy to your financial institution. This levy, which comes in the form of a letter, puts a freeze on the account that lasts for 21 days. If you don’t resolve the underlying debt within that time, your bank will have to hand your money over to the IRS.
But a skilled tax attorney can help you take steps to keep that from happening. It may be possible, for example, to work out a payment plan or negotiate an offer in compromise (OIC) for your tax debt that keeps you out of collections. It may even be possible to show that the levy was issued in error.
In short, an attorney can take quick, focused action aimed at obtaining a release of a bank levy. This can be done during the 21-day waiting period, before the IRS actually takes your funds.