A bank levy is a legal seizure of your property to satisfy a tax debt – so what should you do if you receive one? First, try to get the bank to give you a copy of the levy notice. The notice will tell you how many days you have before your money is taken out of your account. In addition, the levy notice will detail the amount that is being levied. It will also outline the specific years and the type of tax owed.
Typically, the states instruct the bank to freeze your account for up to the amount on the levy notice. They are then required to forward the money within 5-15 days, depending on the state. The IRS also instructs the bank to freeze your account for up to the amount on the levy notice. However, they will normally give the bank 21 days to hold it, before it must be sent into the IRS.
One of your best chances is to get the IRS or State to agree to a full, or at least partial, bank levy release. Once the bank has sent them the money, it is extremely difficult to ever get it back. It is very common for the IRS or State to issue an additional levy and/or wage garnishment if the terms of the release are not met in a timely manner.
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