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Receiving a notice from your bank or the Internal Revenue Service that your bank account has been levied can be scary, confusing and frustrating.  Moreover, in addition to the money levied by the IRS from your bank account, the bank levy can cost you considerable money in bank fees and/or overdraft fees if the bank levy cause checks and payment to bounce.  The article and video below have been prepared by a Denver tax attorney to provide you with information regarding a bank levy and maybe more importantly, how a bank levy can be released.

When you owe money to the IRS, the IRS can levy your bank account after providing you with certain due process.  A levy is a taking of property, and when the IRS levies your bank account, they are in fact taking your money.  The IRS levy will attach to the monies in your bank account as of the date of the levy up and to the amount of the levy.  For example, if the IRS issued a levy to your bank in the amount of $5,000 and you only had $1,000 in the account as of the date of the levy, the levy would attach to the $1,000.  On the other hand, if the IRS issued that same bank levy and you had $6,000 in the account, the levy would attach to all $5,000 of which the levy was issued on.  Upon receipt of the bank levy, the bank is to hold the funds that attach to the levy for a 21 day period.  Thus, you have 21 days from the date of the levy in an attempt to have the levy released or partially released.  Therefore, the million dollar question is, how can I release my IRS bank levy?  There are multiple ways to have the IRS bank levy released which are discussed further below.

First, if you formalize an agreement, the IRS is likely to fully release the bank levy.  Please note, to formalize an agreement you will need to have all tax returns filed and be in compliance with current payments.  Second, if you can show the levy is creating an economic hardship, the IRS will generally release the levy.  An economic hardship could be that will be evicted or foreclosed upon because you cannot pay rent or the mortgage due to the bank levy, or you are unable to provide the other daily necessities due to the IRS bank levy.  Third, full payment of the tax debt should release the bank levy.  This seems obvious, and may not be attainable, but it can be an option.  Additionally, if you can show that the IRS bank levy is improper because the IRS has not afforded you your rights as a taxpayer and due process, the bank levy should be released.

Thus, there are multiple ways to have the IRS release a bank levy that is attaching to money in your bank account.  The best action in my opinion is to be proactive and never be in a position of which the IRS can levy your bank account.  For example, by formalizing an agreement or having a pending installment agreement or other proposal, a hold should be placed on the tax debts and thus you should not receive a bank levy.  You can discuss your tax matters and issues with a tax attorney in Denver by contacting The McGuire Law Firm and scheduling a free consultation.

A Denver tax attorney at The McGuire Law Firm can help you if the IRS has levied your bank account!  Call for a free consultation with a tax attorney!

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