If the IRS has levied your bank or other deposit account, you have 21 days from the date the levy was served on the financial institution to get the levy fully or partially released. When the bank receives the levy it takes the funds out of your account and sets them aside until it is time to send them in to the IRS.
You will need to prove that the levy will create an undue financial hardship. A financial hardship may exist if the levy will prevent you from being able to buy food, housing or utilities, inability to get to work, etc.
You must act quickly! By the time you find out about the levy, several days may have already passed.
When the bank receives the levy from the IRS they will typically send to the IRS your prior day's closing balance. The levy only attaches to those funds. Not to funds that you deposit after the levy has been processed. It's a one time shot.
Once the bank takes funds out of your account for the IRS, if any of your checks come through before you make another deposit, you will incur over-draft charges.
Copyright © 2001-2008 by Gary W. Lundgren, EA
