A common concern once the IRS Levies or “freezes” a bank account is whether it will remain in place as to all future deposits. In other words, can the frozen account still be used to make deposits and pay bills?
The good news is that the IRS Bank Account Levy only freezes the money that was in the account at the time the levy was processed.
If you have $500.00 in the account tomorrow and the levy is fully processed tomorrow, the bank will freeze $500.00.
If the next day you make a deposit of another $500.00, that money is your own and the bank should not freeze it. The levy was complete when first $500.00 was frozen. The IRS would have to issue another levy.
If someone asks you, the same question above then your answer is…”An IRS levy is not a continuous levy on your bank account”.
Video: Tax Attorney In Mesa Michael Anderson Explains Frozen Bank AccountsA lot of people ask their Mesa tax attorney about their bank account when it has been frozen by the IRS, and specifically when can they use it again?
The follow up question is whether or not the IRS will issue another levy on the bank account?
One after another isn't common, but…it could happen and I tell clients to just get the situation worked out so that all collection activity is stopped.
It is also important to know that when the bank freezes the funds, it must hold them for 20 days before mailing the dollars to the IRS. This provides some time for you to try and get the money placed back into the account.
In the end, the IRS is really just trying to rattle your cage when it grabs a bank account. If you have a serious tax debt and have been hit, you need to use the levy as extra motivation to get the entire situation analyzed and solved via a negotiated plan, offer in compromise or even bankruptcy.
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