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The quickest, easiest and most effective tool is the Bank Levy. The key, of course, is to find the account. Many Judgment Creditors will have a copy of a check previously remitted from the debtor. The greatest advantage of using a Private Process Server is that the levy can be performed on demand. When the funds are available to satisfy your judgment (or partially satisfy), the account needs to be levied immediately. The Sheriff will perform the levy, but who knows when? A Judgment Creditor cannot instruct the Sheriff (or Marshall) when to levy on a bank account! Your local sheriff will perform the levy when they have time. However, by the time the Sheriff serves the bank, your money may be gone. Has the IRS filed a levy with your bank, leaving you unable to pay your bills, your rent or mortgage, your car payment or to feed your family? You only have 21 days to stop the levy with a Bank Levy Release.
If you ignore IRS notices, phone calls and letters, the IRS will start what they call Enforced Collection. Again, it is a way for them to get your attention and collect the delinquent taxes. Locating the bank or other financial institution can be difficult for the IRS. However, if you had interest or dividend income in the last few years, the IRS knows where to start. Just like your W-2, these 1099 forms show the name and address of the financial institution that may have your money or property (stocks, bonds, etc.).
Seizure of your bank account or your assets is the ultimate action in their debt collections efforts. The IRS sends a Notice of Levy to the financial institution informing them that you owe taxes. The IRS requires them to freeze all the money in your account(s) as of that day. This includes all accounts with your social security number. You are then unable to use any of those funds to pay your bills. This freeze may cause your checks to bounce. The bank must hold these funds for 21 days. At the end of that period, the bank must remit the funds to the IRS.
This 21 day period allows us time to negotiate with and encourage the IRS to release the funds from levy. See Bank Levy Release for more details. After the 21 day period, the bank sends the money to the IRS and it's gone! There is nothing you can do at that point unless you overpaid the taxes. Once you owe the IRS money, they become very aggressive in their collection attempts. One of the more common collection methods the IRS uses is the Bank Levy. It allows the IRS to present your bank with a piece of paper that requires the bank to immediately withdraw all the money you owe the IRS.
After the bank has cleaned out all checking and savings accounts with your name on them, they send the money to the IRS. You should take this as notice that the IRS will issue another bank levy against you in the future to satisfy any remaining amounts owed to them. It's kind of like hitting the lottery for the IRS. Once they find out how to get your money, they will continue taking your money by issuing more bank levies.
Many times these bank levies are wrong, but it's up to you to correct the problem. Meanwhile, the checks you've written are bouncing all over town.
The worst thing about the IRS bank levy is that it may capture your children's, parent's, girlfriend's or spouse's bank account, if your name happens to be on the account. Even if it's just on there for convenience.
This is true. Believe it. I am a CPA preparing taxes and have a client who's bank account was cleared of over $30,000 (21 day bank freeze then bingo...gone). However, I have been told that it is almost impossible to get the IRS to stop a bank levy once it has progressed to the point of "freezing the bank account". This could also be because I don't think the IRS can even answer a letter within 21 days!!!