68 Comments on Things To Do If the IRS Threatens to Levy Your Bank Account

Steve on Mon, 12th Mar 2012 5:34 pm


I just received my notice saying I have 30 days to pay some money to the IRS or they will “long list of threats” I am a 100% disabled army vet and my only income is from the VA, which is non taxable disability money. It is just enough for me to survive and believe me, it’s not much. I have been told that the VA disability is the only one the IRS can not levy against…my question is this, if my VA check is direct deposit into a check cashing place system and loaded onto a debit card “this is not a bank” is this something the IRS can take? Would I be better off switching back to getting a paper check monthly instead of the direct deposit?

Thank you in advance

Admin Roberg on Tue, 13th Mar 2012 2:14 am


Hey Steve,
Thank you for your service to our country. Now, back to business–First thing is to call the IRS. Tell them, “Hey, I’m a disabled Vet and the only money I get is from my VA disability. Explain the situation from them. Ask if you can be put on their “currently uncollectable” status. It’s quite possible that you’ll qualify. That’s the best thing to do, then you don’t have anything to worry about.
If you can’t get on the currently uncollectable status–and they still want to levy your accounts, I’d talk to the check cashing place to find out if the can accept a levy. Basically, if a levy is placed–it’s on the money that’s in the bank account on the day the levy is asked for–so I’m thinking you shouldn’t have a problem. But I don’t KNOW for sure, so you’re better off talking to the check cashing place. They’ll know their rules much better than I could tell you.
Do call the IRS first though. I think you can get the situation resolved and that would be the best thing for you.

Andrea on Mon, 26th Mar 2012 4:13 am


I receieved a notice of intent to levy for 2006 taxes. I was married at the time, still officially married but I was told by my husband that he he did our taxes for 2006. He did not and the IRS filed for me, but they filed it under single. I also have a child. I asked them to give me until April 15th to file, they said no because they attempted payment agreements in the past. The only thing I can think to do is file for bankruptcy under chapter 7. I have any appointment with a bankruptcy attorney tomorrow but since I didnt actually file the taxes for 2006, then I dont beleieve that debt is discharchable. I in know way was willfully evading the IRS. I just didnt understand what was going on. The IRS call center offer no advice, and I could not afford the payment agreement. I dont know what else to do, but Im very scared. should I stop my direct deposit right now?

Admin Roberg on Tue, 27th Mar 2012 12:01 am


Hi Andrea,
yes stop the direct deposit and don’t leave any cash lying around in your account. Now, what you want to do is to pay some of the tax–even if you don’t have a payment agreement in place–pay some of the tax.

Here’s why–you cannot amend your returns any more–it’s too late. But, if you file an amended return after the due date, you may be able to reduce the amount owed if you’d paid at least that much. So–I know that you should not have to owe that amount, but if you don’t pay anything–you lose the case. So start paying.

In the meantime–they’ve issued a levy notice, once the levy goes into effect-the bank must hold any money that’s in your account to pay the tax. So—it’s best if you don’t have much money in there.

Now–if you can’t afford the payment agreement there are a few options–you can negotiate a lower payment rate. Also, they’ve changed the streamline payment agreement from 60 months to 72 months–so depending upon when you spoke to them that may make the numbers more reasonable.

If they won’t work with you, then it’s time to pull out the big guns and get an Enrolled Agent on the job. Yes, it costs money, but sometimes we can do things you can’t.

But in the mean time–stop the direct deposit. The IRS knows when you get paid and they’ll probably issue the levy for pay day.

Steve on Fri, 30th Mar 2012 9:55 am


Thank you for your prompt reply and the information was right on the money! One final question, am I correct in my thinking that the IRS CAN NOT Levy VA disability payments?

Thank you again,

Steve M.

Admin Roberg on Sun, 1st Apr 2012 12:18 am


Hey Steve,
The way the IRS phrases it is that they cannot levy “service connected disability payments” so I would assume that includes VA disability. But–from experience, I had a client who’s military retirement was levied. He used to receive VA disability, but then when he was old enough it was converted to retirment payments–and the retirement did get levied. (I guess the rule is don’t get old?)

morgan on Thu, 5th Jul 2012 10:40 pm


I.ve just got off the phone w/IRS agent, I owe $13K back taxes. Im disabled vet and unempolyed after 30 min of explaining my hardship medically as well as my age IRS have given me “uncollectible status at this time.” should I stiil worry about my direct deposit from VA or should I get a check from VA instead of Direct Deposit? I worry please help

Admin Roberg on Fri, 6th Jul 2012 3:48 pm


Hi Morgan,
Thank you for your service to our country. You should not worry about anything. Uncollectible status means that the IRS knows you don’t make enough money to pay the bill right now. (Maybe never.)

About once a year, you’ll get a letter from them. Make sure you open it and just call in to follow up. Usually, that means proving you’re still unable to pay.

Keep your direct deposit. It’s easier on you and changing to a check won’t change anything.

They will place a lien on your assets–like your house, but that’s the price you pay for not paying your taxes. Won’t hit you until you sell the house.

One last thing–do you really owe $13,000? So many times the answer is NO! You mention your age–so if you were retired and receiving Social Security during one of those years–then I guarantee the $13,000 figure is too high. Also, is there some self employment or stock transactions on there? Once again, you were over billed.

Take advantage of this time where you don’t have to pay to make sure what the debt is. The IRS figures your taxes at the highest possible rate with no deductions. This is going to sound dumb, but the IRS is really bad at preparing tax returns. If they did yours–it’s probably wrong. A human being did not come up with those numbers–a computer did. Do yourself a favor and have it double checked. You’ll be glad you did.

morgan on Thu, 12th Jul 2012 10:04 am


Thank you for responding for my Q’s. It is now waiting game since, IRS have stated that they will be sending me a letter, I am on the look out just for that!
Yes, IRS did file the taxes for me I do not know how they came out w/ those #’s
Anyrate, just wanted to tell you thank you for taking a time out to respond. May God be w/us when it comes to face w/IRS

Admin Roberg on Thu, 12th Jul 2012 4:08 pm


Hi Morgan,
The IRS got those numbers from employers and other places that are required to turn in the information–like pension providers, financial firms, etc. You can ask the IRS to send you the information they used to do your return. You have a legal right to it.
Good luck with your showdown!

mark on Fri, 13th Jul 2012 6:31 am


I owe my bank money through credit cards which i am paying back through a 3rd party but i am hopefully going to receive some cash soon and looking to see if bank can claim this cash even though i have arrangment in place??

Admin Roberg on Fri, 13th Jul 2012 9:20 am


Hi Mark,
I’l be honest with you, I don’t know anything about what the bank can do about debt. The IRS would not be able to take that money if you had a payment agreement and were current on it. But the bank would have different rules. Sorry.
Jan

Carrie on Sat, 14th Jul 2012 9:39 am


I have a question if I move my money to a pre-paid visa card can anyone levy this money or go after it ex: IRS or Judgement from court?? I have been out of work and off unemployment for a while and had a levy once with my bank that I was able to get released but it scared me so now I am paranoid for this to happen again?? Thanks

Admin Roberg on Mon, 16th Jul 2012 10:12 pm


Hi Carrie,
As of this moment, the IRS is unable to levy a pre-paid Visa card. But the best way to avoid a levy is to get into compliance–file your tax returns, and set up a payment arrangement or get into an offer in compromise or currently uncollectible status.

Christiana on Sat, 22nd Sep 2012 8:00 am


My Ex – husband owed a lot of money to the IRS and he deceided to just leave the Country becaue it’s a huge amount. The IRS after 3 years coming after me and I did not know anything about this because tjat he is NOT PAYING. The divorce paper said he is responsible to pay all his Tax. I just got a new Job as an independent Contractor as an 1099, where I get a Paycheck each week. My question is , when I Cash the Check in a Cash Checking Place and put it on a pre paid Visa, can the IRS still levy my Check directly from the Company when I am a 1099 Employee and they will not notify IRS by end of the Year for Tax purposes? OR can the IRS levy when I try to cash my check? I want to file Bankruptcy in couple month once I have that money saved and also looking for a good attorney . Thanks alot

Admin Roberg on Sat, 22nd Sep 2012 10:52 am


@Christiana,
Wow. Some ex spouses just keep on giving don’t they?
To answer your question–you should be fine cashing your check and putting your money on a prepay VISA card. There’s really no way for them to levy your check at a check cashing place. So that’s a short term solution–be we need to solve your much bigger problem–the tax debt.
First thing to consider–and this could be a long shot but at least try–can you qualify for innocent spouse relief? That’s where you are considered to be completely innocent of your husband’s tax debt. It’s really difficult to win on that grounds, (there’s usually physical abuse involved) but because your divorce decree says he is responsible for all of the debt–it’s worth looking at.
To be honest–I’m familiar with another case that the divorce decree divided up the tax debt–the ex didn’t pay and the the wife is getting hit with it. Innocent spouse didn’t work there, but we’re now working on an offer in compromise–which might be another option for you.
It’s hard to say what the best track for you to take is, but it sounds like you’re going to get an attorney and that should help. Everybody’s case is a little different and especially in a case like yours, little issues can make a big difference. Make sure you get good tax advice in addition to talking with an attorney. Most bankruptcies don’t cover tax debt so make sure you know exactly what’s going to be covered and what won’t.
Good luck.

Christiana on Sat, 22nd Sep 2012 12:05 pm


Thank you so much. I definitly to look for an Attorney. After the little research I’ve done is I can I either do the spousal relief form when this is not working I am forced tp add it to my Bankruptcy Chapter 7..Than this way I do not have to pay back and I talked to an Bankcruptcy attorney and I qualify for chapter 7. I never thought in my life I have to file Bankcruptcy but in this extreme case I am forcen to do that because. But again thank you so much for your fast reply back.
Christiana

Trina on Tue, 25th Sep 2012 7:51 pm


The State levied my checking. The legal department at the bank stated that they can only hold the funds that were in the account, that they can’t take the direct deposit that is coming through in a few days.
Is this true? I’m worried that my employer won’t be able to stop my direct deposit. I’ll be working on get a paper check and transfereing the funds on a prepaid Visa card.

Admin Roberg on Fri, 28th Sep 2012 6:55 pm


Hi Trina,
Your bank person is right, they can only hold the fnds that were in the account when the IRS levied it. They cannot take the direct deposit that is coming. You’re good.

Gordon on Thu, 4th Oct 2012 9:12 pm


I am not a US citizen or permanent resident. I was in the US on a H1B but left in 2006. The IRS last year took some money from my account but I’m sure I do not owe them money. What can I do?

Admin Roberg on Fri, 5th Oct 2012 8:26 pm


Hi Gordon,
What I recommend is getting an Enrolled Agent in the United States who can represent you. There’s going to be a lot of questions that you couldn’t possibly answer online.
If you want, you can contact me directly. My email is Jroberg@robergtaxsolutions.com.

Rosa on Sat, 6th Oct 2012 2:07 pm


I just got a mail from my 3 year old bank saying that NY state put a levy on his account for me. My questions are: (1) I did not recieve any letter from them saying they will do a levy from my son account. (2) Can they do that even if he had $13.00 in his account. (3) will this effect my son credit?

Admin Roberg on Sat, 6th Oct 2012 9:03 pm


Oh Rosa,
I’m so sorry. I’d say I can’t believe it, because I know you’re not making this up. The truth is, yes they can do that. He’s only three so your name has got to be on the account. They must have done a bank search and found your name on there and bam–they got you. Whoopie–they’re going to get a whole $13 out of the deal. But it’s frustrating and embarassing and my goodness he’s only 3!

I don’t think this will hurt his credit report, the levy isn’t really on him, it’s on you. They just went after his account because you’re on there. I would get one of those free credit reports in his name in a few months just to check. He’s three–it should have nothing on it, but better safe than sorry. If you find something there, you can get it cleared. Clearly, he’s done nothing wrong.

You didn’t get a letter saying they’d go after your son’s account but I’m guessing that they sent you a letter saying they would go after your account. That will constitute the fair warning. I’m so sorry. It just seems ridiculous that they’d take $13 from a three year old. Just remember, it’s not like there is a human being looking over this stuff and making responsible judgement calls. It’s all computer generated and the computer found your name on his bank account and the “levy” program just kicked into action.

Be glad that he’s only three, he won’t know his bank account was levied, and be glad that it’s only $13 and no more than that.

Now, if it’s not too late, you might be able to stop the levy if you get with the IRS and set up a payment arrangement or get yourself into a “currently uncollectible” status. If you’re working and can afford to pay something–payment agreement. If you’re unemployed with no source of income–go for currently uncollectible. You may need to prove your financial circmstance, but you’ll be acting responsibly and getting the IRS problem handled. If you don’t, they’ll continue to go after you and, sadly, your three year old innocent son. Good luck.

Rosa on Thu, 11th Oct 2012 8:51 pm


Thank Ms. Roberg for the advice however I gather all the letters from NY state Taxtation and nothing said anything about putting a levy on any accounts. Don’t they have to send a court document showing that they will be doing this? Now my son has a negative balance of $125.00 from the bank, Oh my goodness. Here I am trying to train my son to save and not make the mistakes I made and they do this. Can my bankruptcy lawyer stop this for me? Also I just opened an account would they go after that too? Looking forward to your advice.

Regards,
Rosa

Admin Roberg on Sun, 14th Oct 2012 7:22 pm


Hi Rosa,
I would check with a New York EA or attorney. Here in Missouri, they always send a notice first, but different states, different rules. I’d be surprised though if New York didn’t send anything. Remember, if they send a notice to a prior address and you haven’t notified the state–it still counts as having sent notice. FYI.

Now since your son is only 3, I’m thinking he’ll never remember this and probably is totally oblivious to the fact that his account was levied. I wouldn’t lose sleep over that.

Since they already took the money, I doubt that your bankruptcy lawyer can do anything. But since you’ve got an attorney, he’s probably your best source about New York laws. Good luck.

richard reilly on Sun, 9th Dec 2012 3:18 pm


I received a notice cp504 from the IRS stating that they would levy my State tax refund. I ignored it since I have been sick and in the hospital. I 62 and have been on Social Security Disability since then. I understand that arrangments can be made however I don’t have the money to pay even in installments as I’m paying the State in installments already for taxes owed. I am disabled as I have only one lung that was taken due to cancer and have been in the hospital this year 6 times. I am about to pick up another certified letter and I believe it’s going to levy my SSD income @15%. What should I do other than call them?

Admin Roberg on Mon, 10th Dec 2012 8:52 am


Hi Richard,
Call them! Seriously, I know you don’t want to but ignoring them is worse. Explain your situation. If you can’t talk very well, have someone make the call for you, but be in the room so that you can grant permission.

Ask to be placed on “currently uncollectible.” It sounds like your situation would qualify you (but they’ll need to prove your income and expense situation.” It will buy you some time. You’ll eventually need to settle the debt–either paying or making an offer in compromise–if you’ll qualify–but talk to them.

If you don’t contact the IRS, then it looks like you’re avoiding them and they’ll just levy and take what they want. Sorry. I know it’s not the answer you want, but it’s the right thing to do.

casimir todd on Mon, 10th Dec 2012 8:36 pm


I have a 401K hardship check in excess of 10k needed to replace my car that I had totalled and a few months out of work, but I am afraid to deposit it because I owe taxes… have been getting money levied from my employer checks and was wondering if I were to deposit the check would the IRS take the money I owe them!!!

Admin Roberg on Mon, 10th Dec 2012 8:50 pm


Hi Casmir,
Basically, the IRS can issue a levy on your bank account after giving you notice. Since you’re already being levied through your paychecks, it’s quite possible that you’ve passed the “notice period” and they can come in anytime. That’s a bit of a problem for you.
I think your best bet is to contact the IRS directly and find out what their intentions are. You’ve got to cash that check to get your car. If you can go through your bank–that would be the least expensive. If you need to go to one of those check cashing places, you’ll have to pay fees. That said–maybe that’s your safest bet. I don’t like recommending that, but it would keep your check out of the bank.
Still–talking to the IRS and working out some type of payment plan makes a lot of sense. (Or, given your situation, getting put on the currently uncollectable status would be a good idea.)

Dave on Wed, 12th Dec 2012 12:44 pm


If I owe back taxes and if I open a new checking account will they be alerted right away by my social security # and the account account be frozen, or does it take time for them to find it?

j carroll on Thu, 13th Dec 2012 8:45 pm


i looked at my bank account today. there was a deduction for a large sum. the bank said it was irs. i never received a notice from them saying they were going to take money out. i live in sc. they were sending mail to an old address i called but they wont release my money.

Admin Roberg on Sat, 15th Dec 2012 4:21 pm


Hi Dave,
It will take a little time for the IRS to find your bank account, but don’t count on it. Your best course of action is to contact the IRS get get your situation straightened out. If you work out a plan with them, they won’t levy. If you can’t pay–be up front with them and get on a currently uncollectable status. If you can pay something–get started on an installment plan.

Admin Roberg on Sat, 15th Dec 2012 4:45 pm


@ j carroll-
Once the IRS has your money, they don’t give it back. You say that you never received the notice from them–the thing is, under the law, you don’t have to receive it–they just have to send it. If they sent it to the wrong address–the fault lies with you for not information the federal government that you’ve moved. Sorry, I know that sounds harsh, but that’s the way the rules work. I didn’t make them–just repeating them.
So, here’s the issue–they’ve got your money and you won’t get it back. Are you and the IRS squared now? Or do you owe more and will this happen again?
They’ve certainly got your attention now. You need to get this thing settled so you don’t have it happen again.

j carroll on Sun, 16th Dec 2012 7:45 am


Well unfortunately I trusted someone who said they were taking care of filing my taxes and I do owe them some money, however, i have requested a call back from them and it hs too soon to have them call i guses…maybe next week. My question now is since they drained my account of about 4000 will they take money out of it every time i put it in? Or will they consider this a payment and possibly not take more money out right away until i can try and get a payment plan worked out?

Admin Roberg on Sun, 16th Dec 2012 3:25 pm


Hey j carroll,
Technically, they already tood the $4000 they’ll have to levy again to do it again. The catch is, once they’ve got their levy juices going–they don’t have to issue you a separate notice. They can pretty much strike when they feel like it. So–if you have money deposited into the bank, you should probably move it as quickly as possible to prevent another account draining activity. Sorry.

j carroll on Mon, 17th Dec 2012 2:00 pm


about how quickly will they withdraw the money again???? I don’t wanna write out checks and then have it withdrawn before the checks clear….just an approximate time limit.

Admin Roberg on Mon, 17th Dec 2012 8:33 pm


Hi jJ Carroll,
The IRS says that they usually wait a couple of months before they levy your account again. You won’t get a notice ahead of time though. Now, if you’re talking to the IRS, and telling them that you’re working on it, they won’t levy–or at least they’ll give you a date and say, “we need this information or something by such and such a date, if you don’t do it, then we’ll levy.” So once again, I highly recommend talking to them.

j carroll on Tue, 18th Dec 2012 2:05 pm


talked to them and they gave 30 days. i am taking care of a terminal relative. and they can’t get the info to me for 14 days. is there anyway once i get that i can have it delayed again and if so what can i do to get this delayed. i just have a lot on my plate. you are so helpful

Admin Roberg on Wed, 19th Dec 2012 9:21 pm


Thanks j carroll,
I find that the IRS is usually rather generous about extending the 30 days when you have a problem like yours. Make sure you call them on around the 29th day so they know you’re on top of things. Good luck with your tax situation. I’m sorry about your relative.

Kristen on Thu, 27th Dec 2012 12:14 am


Hi,

Last week the IRS placed a levy on my checking account and got about $1100.00, which in turn resulted in a couple overdrafts. The next day I went to the bank so I could cash a check and then deposit cash to at least cover overdrafts, but my bank said that they couldn’t even cash a check because IRS now had “first dibs” on all funds and the bank was second in line. So basically my bank account is unusable. I thought levies were a one time pull not a takeover of all future account funds.

Here is the background. I was self-employed from 2006 to 2008 as an apprentice then newly licensed real estate appraiser. Never having been self-employed before I was a bit overwhelmed when working on my 2006 taxes and filed and extension. By time extension deadline was nearing the housing/real estate bubble was bursting, and I never filed. 2007 and 2008 I didn’t even make enough to cover expenses, so those years never got filed either. I used credit cards to cover the gap. Since the end of 2008 I have been unemployed. Needless to say, this all compounded my long-standing battle with depression. Fortunately for me, my parents have been able to extend to me loans to cover my cost of living, which I have every intention of paying back in full. After all their help, they were very dissappointed with me to hear the IRS had levied my account.

To get my life back on track, I knew I had to resolve these issues. I started by getting a CPA to compile and file the back tax returns and initiated a bankruptcy for about 15k on the credit cards I used to cover my income/expense gap during those years. It turns out that the IRS had no 1099′s or records of any kind that I earned income from those years, and it was only my honesty in filing my returns that put me on their radar. If I had never done them they would have never known. (But, I would have). The penalties, and fees were more than the taxes themselves. I started making small payments but of course they wanted them paid in full. I should have called but I didn’t.

So, here are my questions. Can they keep continous hold on on my bank account? Can they levy funds from 401k and IRA accounts? Will they still negotiate with me even though they have already levied and apparently “commandeered” my bank account? I just this month started working, part-time, but it looks like more hours will be available after the first of the year. My earnings will be sent to a prepaid debit card issued by my employer, can they levy that card? Should I be wary loading other cash on to that card? Or, would they just levy the wages from directly from my employer before they are dispersed to me? Should I give my new employer (a contract security company, had to pass, standard & criminal background checks, fingerprint verification, and a drug test prior to hire) a “heads up” about this situation, not knowing if or when the IRS will contact them?

I’d really appreciate any advice, suggestions and insights you can give regarding this pickle I have gotten into and now have to get out of. I hope to hear back from you soon. Thank you so much.

Kristen

Admin Roberg on Tue, 1st Jan 2013 10:15 pm


Hi Kristen,
First, once the IRS levies your bank account–and that money is taken, it’s taken and your bank account should be normal. I think someone at your bank didn’t know what was going on. I’ve seen that happen before.
Here’s how it works. The IRS issues the levy–let’s say you’ve got $1100 in the bank at the time–okay so they get the $1100, but they don’t actually take it for 21 days. So after the levy is issued, you deposit $2000, that $2000 that you deposit should be for you to use. The IRS can’t touch it–they’ve got their hooks into the $1100, but they can’t have anything else.
So–somebody at your bank messed up. The IRS cannot, I repeat, they CANNOT keep a continuous hold on your bank account. That said, they might try to levy again, but they can’t just hold your account in limbo forever.

The IRS can levy 401(k) accounts and IRAs, but they don’t like to. They get more money out of you if you cash them in to pay tax debt than if they levy them. (The IRS has to forego the 10% penalty of they levy those accounts.) So it’s possible, but highly unlikely that they’d go after those funds.

The IRS cannot levy a prepaid debit card. What they can do is contact your employer and levy your wages before the money is loaded onto the card.

I think your best bet is to contact the IRS and work something out with them. If you set up some type of agreement, then they won’t levy your bank account or contact your employer. I don’t think you want them contacting your employer, not in your line of work, so call the IRS. That’s your best move. Good luck.

yvette mason on Tue, 22nd Jan 2013 9:03 pm


I owe the IRS. I know that what I owe I will not be able to pay in full. I submitted an offer in compromise and received a response that stated while investigating, a notice of federal lien could be placed. I have kept good contact with IRS responding to all compromise. I am a single parent with health issues and horrible credit meaning I do not have the means to repay. I barely make enough to support my daughter. What can I expect while waiting to hear if my offer is accepted? And what happens if accepted or not accepted? I received the bill and have been responding in timely manner. I didnt pursue installment option yet as I wanted to try the offer in compromise. I guess I just want to know what I can I expect from IRS? Will my paycheck be levied? Is it a one time thing or continuous? Thanks for your advice. I am reading this and the information seems to be very helpful.

Jan Roberg on Wed, 23rd Jan 2013 8:22 pm


Hi Yvette,
First off, while the IRS is pondering your offer in compromise–they aren’t going to levy your bank account or garnish your paycheck. The will probably place a lien on your property–that means that if you own your house and try to sell it–you can’t without the IRS getting their money from the sale.
If you don’t own a home, then the lien would show up in your credit report and could affect you getting a loan. But a lien does not mean they’ll go into your bank account or paycheck.

So–if the IRS accepts the offer–great. If not, then you’re back to trying to negotiate a payment arrangement.

If you they do accept the offer, it’s really important to not fall behind on your taxes again. Let’s say the IRS says yes to the offer and then in 2013 you wind up owing a ton of money and you don’t pay by April 15th–BAM! Not only do you owe the 2013 tax money–but your offer is rescinded and you owe all that money again. So–never ever get tripped up with owing federal income taxes again. That’s really important. I’m not saying that to scare you–just to make sure you know about that.

Good luck with your offer. I hope it goes through.

yvette mason on Thu, 24th Jan 2013 5:38 am


Thanks so much. I plan to stay on top of this 100%. I don’t own a home but hope when things shake out, I will have everything in place. Thanks again for your time.

Vanessa on Tue, 29th Jan 2013 2:21 pm


Can the IRS place a levy on a pre-paid visa card issued by Chase bank? I have a regular banking account at Chase also but I only keep a few hundred on there just to pay bills. If I get direct deposit to my pre-paid Visa for my tax return is the IRS able to touch that money? I owe both the IRS from a repossessed car that was sold & student loans and every year for the past 3 years both the State and IRS fight over that money. I have plans in place to repay the IRS what I owe them, which is only $300 but I cant do that until I get my refund.

Jan Roberg on Tue, 29th Jan 2013 9:21 pm


Hi Vanessa,
The IRS can’t levy a pre-paid Visa Card BUT–and this is important–they can keep your refund from going to the card in the first place. And I think that’s your situation. The IRS will keep the $300 (or whatever you owe them) and the rest of your refund will be delayed. Sorry.

Arhtur on Sat, 9th Feb 2013 8:02 pm


I setup a monthly payment plan with the IRS before we filed our 2012 taxes and it was accepted. But only to come find out that they deducted from our refund the full amount due. What can I do to rectify that with the IRS or will they even consider putting the balance back towards my refund so we can continue with the payment plan we set up ?

Jan Roberg on Sun, 10th Feb 2013 9:56 pm


Hi Arthur,
Your taxes are all paid up. Be glad its done. You’ll be saving yourself money in the long run.

Jan Roberg on Sun, 10th Feb 2013 10:04 pm


Hi Fernando,
You might be able to claim your parents. Here is a link to the IRS website questinaire about claiming dependents. http://apps.irs.gov/app/ita/app/investigate.action?screenId=s1%40TLC_Dependents_Development_Screens_DEPLanding_xint&ts=1360555360518&ita=Dependents&factId=Dependents&entity=global&screenEntityInstanceName=global&itascreenid=Who+Can+I+Claim+as+a+Dependent%3F-s1%40TLC_Dependents_Development_Screens_DEPLanding_xint&screenEntity=global&entityInstanceName=global

Wow, that’s a pretty long web address. Anyway, you will need to apply for ITIN’s for your parents, and there are some other issues that you’ll need to be able to prove, but unlike the people with families in India–people may be able to claim family members in Mexico.

Do go through the questionaire to make sure your parents can be claimed.

Dell Dumas on Tue, 12th Feb 2013 9:36 am


Good Morning. If only part of my State tax refund was placed on hold by the IRS, does that mean that I will receive the remainder of the state refund? Also does this now mean my IRS tax debt is now paid in full? My thinking is that if I owed more than what was placed on hold, then they would have taken the entire refund. Am I correct? Thank you for your time.

Jan Roberg on Thu, 14th Feb 2013 9:10 pm


Hey Dell,
I’m not sure–you’re talking about your state refund. Is the IRS confiscating your state refund? Is the IRS levying that? If they are and they only took half, then it sounds like you’ll get the rest. I’m not 100% positive, but that’s the way it sounds to me.

laurie on Wed, 20th Feb 2013 10:33 am


Hi, my mom has recently had all of her bank accounts frozen by the IRS. She can’t pay her bills.

She has several checks for large amounts of money. Is it legal for her to sign these over to me, so that I can deposit them in my account and give her cash as needed? Are there any criminal or civil federal implications on me if I do this? I doubt state enters into this at all, but I live in Maryland.

Thanks.

Jenny on Tue, 26th Feb 2013 5:46 pm


Ok, so my bank account was levied by the State and the bank is holding that amount for 21 days. Then the state will get their money but I got my federal refund and they subtracted that same amount I owed the state and they will give that to them in about 3 weeks. So to me it seems that the State will get their money twice. Once from my bank and also from my federal refund. Is that possible and if that does happen will the state or irs refund me one of those amounts? So confused!

Diane on Wed, 27th Feb 2013 1:31 am


I had an installment agreement to pay 50.00 per month as I’m on SSI and do not receive a lot of money. Something happened to where my payment for January was not accepted yet I did not know until I received a notice “intent to terminate installment agreement” on 2/4/13 unless I paid in full by 2/19/13. I have had an agreement for 2 years and this was the first time my payment was returned, will my account be levied? I have tried to contact them and the line is always busy and I did make a 50.00 payment recently. What could I expect now?

sherri on Fri, 1st Mar 2013 6:26 pm


I did an offer and comp they accepted it for 30 k from 69k I couldnt come up with the 10k downpayment and then make 1400.00 payments until it was pd in 24 mths so they cancelled my oic. I received a levie notice I dont have a home in my name or bank acct in my name or car in my name or job at this time because i was laid off. I am up to date with all my filing yrs even this yr 2011 I was told in 10 yr 30 days it all will be gone and zero balance but will go up to 250k in taxes owed. I know its ruined my credit but it was ruined anyway from divorce. I feel I have nothing to loose if I just wait out 8 more yrs. What do you think should I try to make payments or file Bankruptcy and make sure it would be in it or, just wait it out.. I dont have anything to take but my boys have 2 homes in a trust that I live in and rent out with an aunt as the trustee. Advice will be appreciated. Thanks Sherri

Chris on Sat, 2nd Mar 2013 11:11 am


Hi Jan-

I had an issue with my state taxes in 2000 and was contacted in 2006 about the situation, with the state telling me that I owed them almost $10,000. In 2000 I was a student and had part time jobs on and off, but have no idea how I’d come to owe the state that much money. There was a year or two where I remember not filing back then (I was young and dumb). After they’d contacted me, they wouldn’t give me an explanation to why I owed that much money. I talked to several representatives, pleading my case and finally they stopped calling.

The other day I’d received a NSF alert on my mobile phone for one of my bank accounts. A levy was put on all of my accounts, draining each one. Now I have no money, no way to pay bills including my rent and car payment, and no money for groceries this week. Nobody had contacted me and I had no idea that this was coming. I talked to a friend of mine at the bank and he gave me a contact number to call. of course it’s the weekend and I’ll have to wait until Monday but I’m unsure of what options I have to fix this.

Are they required to provide me with the evidence to why they think I owe them that much money?

If there’s a glitch in their system and this was a mistake, is there legal action I can take for putting me through this hardship?

I just don’t understand how I could owe more money in taxes that year than what I probably made, even if I failed to file.

Thank you ahead of time!

Kenneth K on Sun, 3rd Mar 2013 8:51 am


I owe roughly 4k for 2009, 2010, and 2011 and want to make a payment arrangement w/ them, will they work with me, they say i didnt file in 2004 but was owed a refund that year, how can i get that applied to my tax debt ….will i see a irs collector at my job?

Jan Roberg on Sun, 3rd Mar 2013 4:05 pm


Hi Laurie,
For one thing, if your mom deposits those checks into her own bank account after the levy, the bank has to release those funds to her. They can only hold the funds that were in the account at the time the IRS issued the levy.

That said, she may not feel comfortable having her money in the bank.

It is not illegal for her to sign the checks over to you and have you give her money as she needs it.

Jan Roberg on Thu, 7th Mar 2013 9:58 pm


Hi Jenny,
If the state gets it’s money twice, you will eventually get your money back. It will take them awhile to sort things out, but you will get your money. Make sure that you follow up if you don’t get your money within a month. Then follow up again in another month if nothing happens.

Jan Roberg on Thu, 7th Mar 2013 10:00 pm


Hi Brad,
If you have an exchange rate for a specific date, that’s the best choice.

Jan Roberg on Thu, 7th Mar 2013 10:01 pm


Hi Diane,
You will need to contact them and wait on hold (forever). You’ll want to reinstate your installment agreement. Get through to them before they levy you.

Jan Roberg on Sun, 10th Mar 2013 9:01 am


Hi Sherri,
You’ve just told the tragic tale of what happens when you don’t keep up with your offer in compromise–you miss your payments and you lose your deal. And you owe a lot of money to the IRS. But here’s a few more things you need to know: one–while you are in an OIC, the statute of limitations is suspended–that means that the clock isn’t ticking on the 10 years. The clock also stops during a bankruptcy. The IRS has all sorts of ways to make the clock stop.
Plus, do your really want to put another 10 years of your life on hold? Seriously. Right now you can’t do anything. If you had enough earnings that you owe the IRS $69,000–don’t you want another good job? Do you really want to keep hiding for 10 years?
I suggest that you contact the IRS, and get yourself into a payment agreement. Explain all the issues, why you can’t pay more than $X and work something out. Whatever you do, make a schedule that you actually can keep, not one that you’re going to miss deadlines on. And then live your life, the one that you’re supposed to live, not one where you’re hiding from the government for 10 years. You deserve better than that.

Jan Roberg on Sun, 10th Mar 2013 9:12 am


Hi Chris,
You’re not going to like my answer–I’ll warn you now. The state contacted you in 2006–you didn’t respond. It took them 7 years before they actually levied your bank account. But technically–they did contact you back in 2006. So you won’t be able to sue them for not warning you. I know, that stinks, but there you have it.

Now, the money’s gone and you’re not going to get it back. I’m guessing that you never filed your tax return. What you should have done back in 2006 was to find out what the problem was and fix your 2000 year return back then.

Since you never filed, you may be able to file now and at least prevent any further damage.

While the IRS has a statute of limitations of 10 years–the states are a different animal. Here in Missouri, I’ve got a taxpayer who owes for 1989. Although Missouri has a statute of limitations, they can extend it if they have filed a lien–and they just keep renewing those liens before they expire.

If your funds are still tied up, you may be able to contact the state and have them release some funds for your necessary bills. Have access to a fax machine and copies of the bills ready. I’ve done that before for clients with the IRS–I don’t know how your state will react.

The whole point of the levy is to get your attention–which it did. Get this old issue handled and out of the way. Make sure you don’t have any other old debts that they intend to levy on either. Good luck.

Jan Roberg on Sun, 10th Mar 2013 12:13 pm


Hi Kenneth,
First, the IRS will not apply your 2004 refund to anything because the statute of limitations has worn out. Sorry.

But they will work with you on a payment agreement. Call them, make a deal. If you call them, they won’t be coming to your work. I’m thinking the minimum payment they will accept would be about $60 a month. If you can pay more, do so and get it taken care of. They just keep piling on interest if you don’t pay if off.

Chris on Wed, 13th Mar 2013 8:58 am


Thanks, Jan. I was able to get in contact with a representative with the Iowa Department of Revenue and it sounds like they had never received any record of me filing. He told me that the state generates a return based on my likely income for that year (apparently they thought I made 6 figures while I was in school?!).

I contacted the IRS, got a transcript for that year, and refiled. I’ll follow up this week to see if my issue is fixed. The representative also told me that the state hadn’t taken the money yet. The bank is holding it and if the issue isn’t resolved within a certain amount of time, the bank will issue a check for the amount held to the Department of Revenue. Hopefully we’ll come to a resolution soon.

I’ll go ahead and speak on behalf of this whole message board. THANK YOU for taking the time to help us out!

I’ll keep you posted regarding my situation.

Jan Roberg on Wed, 13th Mar 2013 8:54 pm


Thank you Chris,
I appreciate the comments. Good luck and do keep us posted on what happens.

allen on Wed, 27th Mar 2013 8:54 am


IRS stated I never filed my returns. Notices they sent went to an address I never lived at. Got notice at work of garnishment. I was laid off and all severance was garnished. Been a year and a half and company is hiring again. Will that same levy be in place if I am rehired?

Jan Roberg on Sat, 15th Jun 2013 8:50 pm


Hi Allen,
So the IRS garnished your severance pay a year and a half ago and now you’re getting rehired. Will they still garnish your pay?
My best advice is for you to call them. Figure out where you stand, file those back tax returns, and make some sort of arrangement so they don’t garnish your wages.
My best guess is the garnishment won’t be active right now as you’ve been gone from that company for over a year. That said, once the IRS finds out that you’re working (probably next tax season) if you still owe them money, then they will be going after it. Beat them to the pucnchline and get yourself caught up.

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