Owing money to the IRS can lead to more problems than you could ever imagine.  If you do not contact the IRS and make arrangements to pay them, they have the right to freeze your bank accounts.  This process is called a Bank Levy.  Bank Levy’s also include credit unions, trust companies, savings and loan associations etc.  Finding a way to get a bank levy release can be avoided if you contact the IRS the moment you are aware that you owe them money and are unable to pay it in full by the due date.

If you are currently having your funds seized or your accounts frozen then it is time to explore how to get a bank levy release.

Once your financial institution receives the levy notice from the IRS they are required to freeze the amount listed on the levy.  The bank then holds the funds for 21 days before they are required to send the amount listed on the levy to the IRS.  This gives you some time to work on getting the bank levy release.

You need to be aware that it can be very difficult to get the levy released. Once the IRS has a hold on the funds owed to them, they are reluctant to let go of that hold.

There are certain conditions that can get a bank levy release accomplished:

The money owed to the IRS is paid in full thereby causing the levy to be invalid

• The statutory collection time frame has expired.
• Releasing the levy will facilitate collection of the amount owed to the IRS
• The levy causes an economic hardship, meaning the levy will cause you to be unable to pay your NECESSARY living expenses.
• You set up an installment agreement with the IRS to pay the money owed (this must be agreed to by the IRS and is difficult to set up once a levy has been enforced).

Basically there must be some concrete resolution made with IRS to pay what you owe before they will release the levy.  The IRS may (and usually do) require that all outstanding tax returns be filed prior to any bank levy release.

It is imperative that you contact a tax professional if you owe the IRS and are unable to pay in the time set forth by the IRS.   This is no time to procrastinate!  Bank levy’s are much more common than you realize and you don’t have to be that far past due before your funds will be frozen by the IRS.

A tax professional can assist you with exploring all of the possible options when it comes to dealing with the IRS.  You may be able to set up payment arrangements making it possible to avoid dealing with a bank levy release all together!  It is worth taking the time to find out what your options are as quickly as possible.  Dealing with the IRS is stressful and overwhelming, let a tax professional be your liaison and represent your best interest.