This isn't really a tax question as much as it is a banking question. I recently received a copy of an IRS levy on my bank account. After receiving the notice, I called the IRS and worked out a payment arrangement. Easy enough. The IRS agent I spoke with indicated there wasn't much he could do about the actual levy because it was probably already being processed. The notice was dated the 25th--I received it on the 30th and made arrangements on the 2nd. As of today, (4th), my account still hasn't been levied. Does anyone know how long it takes a bank to process a levy once they receive it? I was under the assumption that the IRS sends the copy to the taxpayer after sending it to the bank to keep the taxpayer from withdrawing funds prior to the levy. I'm in banking limbo until it happens.
Debt Samaritan
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I'm not sure, but you should probably not deposit any money into your account until you know the status for sure. Hopefully someone more knowledgeable about this will come along.
Debt Samaritan
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I haven't had an IRS levy but have experience with other levies. In my experience the bank has to put a hold on your account immediately upon receiving the levy. You need to call the bank ASAP. If you have direct deposit you may want to turn it off and get a paper check that you can cash somewhere else, you won't be able to use your bank if they see the levy. However, once they get the amount they need the levy is released.
Debt Samaritan
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Also, is there enough in your account to cover what you owe? If so why did you make payment arrangements. The levy will stay on your account and will drain everything out of it until the full amount of the levy is paid.
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An IRS levy is a one shot deal--meaning, they take what you have in the account at the time the levy. If it's not enough, they can come back later...but the levy doesn't remain active until the balance is paid (like wage levies do). As it turned out, I found the answer to my own question today after talking to both the IRS and the bank. The IRS sent the Form 668 to the bank a week before they sent me the form 8519...and, for whatever reason, the bank still hasn't received it. They also haven't received the mailed release (which is to be expected given the other delay). However, the IRS was kind enough to fax it over to them this morning, so the release has been posted and when and if the levy arrives at my bank, it won't be processed.
Debt Samaritan
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That is great news and thank you for following up with the information!
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