How Can I Get My Bank Levy Released?

On: March 29, 2023

Under what reason will the IRS release a bank levy?  The Internal Revenue Code specifically provides that the IRS must release a levy if it is determined that You paid the amount you owe, the period for collection ended prior to the levy being issued, it will help you pay your taxes, you entered into an Installment Agreement and the terms of the agreement don’t allow for the levy to continue. The IRS will notify the bank, credit union, savings and loan of the decision

What money in my bank account can the IRS Levy?  The IRS will seize funds in your bank account which will include funds available for withdrawal up to the amount of the seizure. After the levy is issued, the bank will hold available funds and give the taxpayer 21 days to resolve any disputes about who owns the account before sending the money to the IRS. After 21 days, the bank will send the IRS the money and any interest earned or dividends on that amount. The IRS can levy your checking or saving account, retirement account, and seize up to 15% of your federal payments.

Can my money be returned after a bank levy?  The IRS may return the property if the seizure was premature, the seizure was in violation of the law, returning the seized property will help our collection of your debt, you entered into an Installment Agreement to satisfy the liability for which the levy was made, unless the Agreement does not allow for the return of previously levied upon property. the IRS procedures were not followed, or it’s in your best interest and in the best interest of the government. We may return property at any time if the property has not been sold. If we decided to return your property, but it’s already sold, we will give you the money we received from the sale. You can file a request for return of seized money or money from the sale of seized property, generally up to 9 months after the seizure.

In What other ways can a IRS bank levy release take place?  The IRS will also release a levy if it was issued improperly. For example, in the case where the levy was issued against property exempt from seizure, prematurely, before we sent you the required notice, while you were in bankruptcy and an automatic stay was in effect, when the expenses of seizing and selling the levied property would be greater than the fair market value of the property, while an Installment Agreement request, Innocent Spouse Relief request, or Offer in Compromise was being considered or had been accepted and was in effect, or while the Office of Appeals or Tax Court was considering a collection due process case and the levy wasn’t a Disqualified Employment Tax Levy to collect employment taxes, a state refund, a jeopardy levy, or to collect the tax debt of federal contractor. while the Office of Appeals or Tax Court is considering an appeal of the denial of innocent spouse relief. There is also relief if the IRS bank levy was to be against the property of another individual. In this case, there is appeals process where the taxpayer can appeal the seizure of funds under the Collection Appeals Program within two years of the seizure by filing a claim. This is considered a wrongfully seized property case under Internal Revenue Code 6343(b) and claims must be submitted within time limits.