| A bank levy by the IRS is imposed on people to | | | | You may represent yourself at CDP, CAP and other |
| recover the total amount due, while adjusting the | | | | Appeals proceedings. Or, you may be represented by |
| amount to the tax due. When you fail to pay your | | | | an attorney, certified public accountant, or a person |
| taxes even after you have been served a legal notice, | | | | enrolled to practice before the IRS, such as an enrolled |
| your bank will recover the amount from your checking | | | | agent. The enrolled agent EA designation is earned by |
| account and send it back to the IRS. In case your | | | | those who demonstrate expertise in representing |
| account has insufficient funds to cover your debt to | | | | taxpayers by passing a federal enrolled agent exam, |
| the IRS, your bank reserves the right to freeze your | | | | or equivalent experience with an IRS job. Some of |
| account and recover the entire amount. This process | | | | these professionals held IRS jobs in the past and can |
| is known as a bank levy. In other words, a bank levy is | | | | be a great asset. Also, you may be represented by a |
| imposed on you following your inability to respond to | | | | member of your immediate family, or in the case of a |
| the notice and pay the outstanding taxes to the IRS | | | | business, by regular full-time employees, general |
| within 21 days. | | | | partners or bona fide officers. |
| In case you are unable to pay your debts on time, the | | | | Another alternative is to prove to the IRS authorities |
| tax department has the right to initiate legal action | | | | that a bank levy would cause you undue hardship. If |
| against you by imposing a bank levy on your checking | | | | you can prove that you cannot sustain yourself and |
| account. A bank levy can be devastating, making | | | | your living situation would be jeopardized in the 21-day |
| normal day-to-day living impossible. If you receive a | | | | period, the IRS may allow you to withdraw whatever |
| notice of a bank levy from the IRS, you need to act | | | | is necessary to meet your daily living expenses. The |
| quickly. Once you receive the "intent to levy" letter, you | | | | onus is on you to submit thorough financial statements |
| must act quickly if you intend to stop the process. | | | | and details about your day-to-day financial health. This |
| Ways to Stop a Bank Levy | | | | step is usually your last ditch effort in negotiating with |
| Once you receive the dreaded letter, here are some | | | | the IRS. |
| steps you can take to prevent further trouble-- | | | | Do not let a bank levy happen to you. The problems |
| Submit a Form 12153 to request a "Collection Due | | | | you are likely to face range from complex legal |
| Process Hearing." This can give you a cushion of 30 | | | | tangles to bankruptcy. The tax department or your |
| days to negotiate with an IRS officer for an alternate | | | | creditors can seize and sell all your immovable and |
| mode of payment of your dues. The modes can | | | | movable property, such as house, car, furniture, etc., to |
| include an Installment Agreement, an Offer in | | | | recover IRS debts, rendering you homeless. The |
| Compromise, or a Penalty Abatement. The IRS on | | | | underlying moral - do not be intimidated by the IRS, and |
| their part will normally suspend any collection activity | | | | more importantly, do not make the mistake of |
| during this 30 day period, provided the IRS does not | | | | assuming that the IRS only makes idle threats. If you |
| believe the collection of the tax is in jeopardy. | | | | do receive notice of an "intent to levy" you should deal |
| At the close of the CDP hearing, Appeals will issue a | | | | with it immediately. |
| determination letter. After which you may request a | | | | IRS Circular 230 Disclosure - Pursuant to the |
| judicial review by petitioning the United States Tax | | | | requirements of the Internal Revenue Service Circular |
| Court, on or before the 30th day after the | | | | 230, we inform you that, to the extent any advice |
| determination. | | | | relating to a Federal tax issue is contained in this |
| There is another IRS appeals process, called the | | | | communication, including in any attachments, it was not |
| Collection Appeals Program, or CAP, that is available | | | | written or intended to be used, and cannot be used, for |
| under more circumstances than a CDP hearing. Unlike | | | | the purpose of (a) avoiding any tax related penalties |
| CDP, you cannot challenge the existence or amount of | | | | that may be imposed on you or any other person |
| your tax liability under CAP. Also, you cannot proceed | | | | under the Internal Revenue Code, or (b) promoting, |
| to court if you do not agree with the Appeals' decision | | | | marketing or recommending to another person any |
| in your CAP case. | | | | transaction or matter addressed in this communication. |