If you’ve received an IRS notice saying that they intend to levy your bank accounts if you don’t pay up in 30 days, then it’s time to pay attention. Before the IRS actually issues a levy notice, they’ve usually made a few attempts at contacting you and trying to get a payment. If you’ve received an IRS levy notice, it means that the IRS hasn’t heard from you—they think you’ve been blowing them off (which in many cases is true). If you ignore the levy notice, they’ll just take your money and the law is on their side so you need to act now.
First, the responsible thing is to call them, or hire someone to deal with them for you. (I personally think that if you’ve reached this point, it’s best to hire someone—but remember, I do this for a living, so note that I’m biased.)
There are things you can do to prevent the IRS from going through with the levy. Let’s assume that you really do owe the money:
1. You can set up a payment arrangement–you pay off the IRS on a monthly bill schedule
2.Your situation might qualify you for an offer in compromise (the pennies on the dollar thing you see in TV commercials), or
3. Maybe you’re going through hard times and need to be put into the currently uncollectable status—you still owe, but the IRS quits hounding you until you get a job or your situation changes.
But maybe you don’t really owe the money. That’s the big kicker for me. Usually, if you’re getting IRS levy notices, you do owe them money—or at least part of it, but I have seen several cases where my clients don’t owe the IRS anything! A couple of times I have even gotten them refunds instead. If you didn’t do your taxes, and the IRS did them for you, don’t assume that the IRS did them right. When the IRS does your taxes for you, they automatically put you in the highest tax bracket they can justify and you get no deductions or tax credits that you might have qualified for. (Here’s a hint: if you’ve got kids, the IRS probably did your taxes wrong.) Even if you find that you don’t owe the IRS money—you still have to contact them, let them know the situation, and then you’re going to have to provide proof. Usually your proof is your corrected tax return.
Dealing with the IRS is the best way to get yourself out of levy trouble. But here are a few things that you also might want to consider doing while the threat of a levy is still hanging over your head:
1. Make sure your name is taken off of your kids’ and/or parents’ bank accounts. If you’re on someone else’s bank account, the IRS can and will levy that account too.
2. Don’t keep large amounts in your bank accounts. If you’ve got lots of cash, then maybe you can just pay your debt. But usually, this isn’t an option for most people. If your paycheck is going direct deposit into your bank account, get the money out immediately. You can put your cash onto a prepaid Visa debit card. Once the levy is in place, the IRS can only take the funds that are in your account at the time of the levy, if you get another deposit, that money is accessible. Transfer money in only as you need to make payments out of the account.
IRS levies are serious business. Don’t make the mistake of ignoring them.
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Hi DJ,
That’s a good question. Basically, the IRS may issue a levy on any property or right to property that belongs to the taxpayer. That said, I haven’t seen them actually levy a secured credit card, but that doesn’t mean it can’t happen, that only means that I personally haven’t seen them do it.
Can the iRS issue a levy on secured credit cards?
Hi Harold,
Since you are in currently uncollectible status, the IRS won’t be pursuing you for payment – meaning they’re not going to garnish those payments. I suspect that even with you receiving payments, your income will still be low enough to stay in the currently uncollectible status. If you happen to be making enough to start paying the IRS back, of course you should do so – but I doubt you’re income is going up that that much.
Generally, once you go into uncollectible, you’re in there for a year and then the IRS sends you a notice reminding you of your balance due amounts. Then it’s always a good idea to check in with them – let them know you’re still unable to pay, and they put you back on uncollectible. (Unless of course you win the lottery or make a lot of money doing something else.) The IRS only garnishes when you’re not listening or keeping them up to date about what you’re doing. You’ve talked to them, you’ve proven your income. You’ve done everything you’re supposed to do. You’re okay.
I am currently in uncollectible status, for unfilled taxes. I have become disabled and with start receiving payments next month, will also be getting some back payments from SSDI. Can the IRS confiscate, garnish these payments? I currently have no bank acct. Don’t own any property (real estate, vehicle’s, land, nothing) had to sell it all to try and stay afloat before movie g in with my daughter! Thanks!
Hi Michelle,
I don’t believe that the IRS actually monitors your bank account to wait for a big deposit. But, if your luck is anything like mine, they’d place a levy right after you make the deposit anyway.
I’m thinking that your best bet is to contact the IRS, tell them you need to file the returns, and that you want to do an offer in compromise. You’ll need some help with that, but I’m guessing the OIC may be the best route for you.
Also, I would find a tax professional to help you with that tax return. It sounds to me like you had a partnership, but with everything being in your name – and not having your old partner’s information, that could be a problem.
So- what to do. I think your first move is to talk with the IRS. There is a lien, you know that, you want to know about a levy. You’re right in that they may have sent you a levy notice but you didn’t receive it. As far as they are concerned, if they sent it, that’s all they need to do. So you’re being responsible, you’re calling them, you’re taking action. If there is no levy, then ask them for a 30 day delay so that you can file that missing tax return. That means they can’t take further action for 30 days. Then you can deposit the check, let it clear and get your money out.
Do file that missing tax return! And get started on paying down the bill. An offer in compromise might be the way to go – but on the other hand, if you have enough cash from that settlement to pay the bill – then an offer won’t fly.
But I’m also thinking that once you file that return, the outstanding balance won’t be a bad as it looks right now. I’m guessing they’re taxing you on the full value of the house, not your capital gain, which should be much smaller. Once you reduce your tax debt, your penalties and interest will go down too.
If there already is a levy out, then your situation is riskier. They can pretty much garnish your bank account when they feel like it I don’t know if your mom can cash your check for you. I don’t know the banking rules in your area. You may be able to go to a check cashing place, but I don’t know how bad the fees will be. That’s why I think your first call should be the IRS. I think you’re better of knowing, than trying to guess what they’ll do.
So I have had a federal tax lien since October of 2014, I only found out about it because I do check my credit regularly and I saw it for the first time in May of 2015. I sold a house in 2006 and did not file taxes for it since I was young and stupid at the time, I had sold another house the year before and after doing the taxes on it, I knew the following year the amount that I would owe for the second house I did not have, so instead of being smart and just filing and not paying, I did not file at all since I was only like 22 or 23 and didn’t know it was better to file and then not pay or make payments instead of just not filing because then it looks like I’m trying to evade taxes. The amount for the lien is about 40 to 50 times more than what I would have originally owed. I’m guessing it’s years of penalties and interest for not filing. So my question is, with having the lien, could they possibly be monitoring my bank account waiting for me to deposit a large amount of money to then levy it. I got a settlement check recently from a lawsuit from a job I had a few years back and I want to deposit it so I can then do my taxes from 2006 on the house I did not pay capital gains tax on. I’ve been holding off looking for work as I am afraid they will garnish my wages too. And I in no way can pay the amount owed ever in my lifetime but I can pay the original amount. I’ve been told the IRS usually forgives you one time of not paying your taxes and you will just owe them the original amount and not all the penalties and fees. They could be sending notices to my last known address to them and I not know it. I’m afraid if I deposit this check they will levy my account but I read that they can’t do that without sending you notices first, but like I said they could be sending them to my old address. Do they levy your accounts when you have a lien? I’ve searched the internet for so many answers to my questions but I have yet to find anything that fully answers my questions. I’ve been thinking about signing the check over to my mom and she cash it for me, but if I know there is no chance of my bank account being levied after I deposit the check waiting for it to clear I will just do that. I’m just so afraid of that happening and me not getting the chance to actually do my taxes first and just pay what was originally owed. Please let me know what you think they can and cannot do or what might possibly happen if I deposit this check. Things are also a little more complicated since I bought the house with someone else, we drew up a partnership agreement with a lawyer and stated everything in there that we felt was necessary, including that we split the taxes owed on the houses we bought together, even though the houses were only in my name, that contract holds him liable for half of what’s owed, so that’s another reason I don’t want the IRS seizing that entire check once it’s deposited because then I would possibly have no way of him paying up his half which is already going to be a process trying to find him and make him pay up. I know I wrote a lot And asked a lot, please answer everything as best to your knowledge but my main question is just, could the IRS possibly be monitoring my bank account since I have a lien and just waiting for a bigger deposit to levy it. I can’t take the chance of them taking this money from this check so should I deposit it and take my chances or have someone else like my mom cash it for me since she has plenty of money in her account to cover more than what the check even is.
Hi Nikki,
Hmmmmm. If you were put into uncollectable, you should still be in uncollectable. I think you had a nasty person just trying to get you to pay. But, we don’t want to just take that for granted.
Okay – the interest is going to accrue while you’re in uncollectable – so don’t call them to ask about that. Do call though, and say you need to be placed in uncollectable status. Make sure they do that. They will ask you about your income and expenses. They may have you send them proof. But if you are not working, you should qualify – at least until you get a job.
Okay, that’s the first thing. Next – you have an estranged husband who owes for 2016. What about your tax return? Did you file one? You can file as married filing separately. If he did not file – you should file your separate return right away. Then – voila – your return is filed, and you only owe what you owe. That should settle the 2016 issue. Good luck.
Hello, I received a letter stating I owed taxes because of my estranged husband not filing in 2016. I told him about it and he said he called and they told him it was my debt alone. Both our names is on it and it’s his taxes that caused this. Well the amount is $7,000 and I can’t pay it, I was put on the uncollectible status but when I called to inquire about the interest I was told that they were going to levy my account and start taking whatever they can. I was trying to tell the rep I am in uncollectible status but she ignored it and told me to call back in 10 days with agreeing to pay on a payment plan. They want $96 a month but I’m no longer in the military and I have no income right now. I don’t understand how come I’m not in that status anymore. My situation has only gotten worse. I don’t know what to do. She said I would have to apply to be put on that status as if I never was.
Hi Mason,
It’s a pain in the backside for the IRS to take your house while you’re still living in it. They can-but it’s pretty rate. But if you owe them $180,000 they be be inspired to be a little more aggressive than normal, especially if the statute of limitations is about to run out. Now, I suspect they’ve already got a lien on the house so if you sell it, they will definitely get their money then, but if you don’t sell it, evicting you would be a hassle for them. (They don’t like hassles that much.)
That said, they can seize your home and sell it. The way to prevent that from happening is to make some sort of arrangement to pay – like an installment agreement. They also cannot seize if you are in the process of getting an offer in compromise – but remember, the time that you’re in an Offer in compromise – or waiting to see if one will be granted adds to the fall off date when the statute of limitations runs out.
Hi Julia,
Hmmm. I would take your information and go talk to a tax professional in person. My gut says you don’t owe any tax on that money, but you might just want to get some eyes on that. Just to be on the safe side. I mean, if he’s just giving you money – that’s a gift, it’s not taxable. But if he’s paying you for something – are you going to get a 1099MISC later? You want to know. I don’t have the answers for you. Sorry.
WHAT ARE CHANCES IRS GOING AFTER YOUR HOUSE FOR A TAX DEBT. IF THE HOUSE IS PAID OFF. 180K FALL OFF JUNE 2019. HOW CAN IRS BE STALLED UNTIL STATUTE OF LIMITATIONS RUNS OUT
Hi! My X-boyfriend whom I broke up with a few months ago, had depositing money to my checking account every month for almost 7 months. However, when we broke up in march, of course there are no deposits to my bank account anymore. Today, I got a call from my Chase bank asking me about deposits that my X-bf was making for me. As I googled about all these, he is the one who supposed to pay taxes for these gifts (financial support), is this correct info I got from IRS.gov? Should I be worried about this call?
Hi Eileen,
If he can afford to pay it’s probably a good idea to do that to prevent them seizing his assets. But I’ve got a couple of thoughts also.
1. He could try to file an innocent spouse claim. Innocent spouse is a difficult claim, but he might actually qualify. The thing is – he was overseas and he didn’t know about the money or the taxes. He’s got a shot at it – but it’s a tough case to win so I’d pay the tax upfront to stop any further penalties.
2. She set up the payment plan on the taxes for 2013 – but 2013 was in both their names so he’s technically still liable for that plan. Even though the tax might be attributable to her, because they filed jointly (I’m assuming) he’s still legally liable for the tax.
3. He may wish to discuss with his lawyer if he has any legal recourse against his ex for that tax. He’ll want to make sure first that it is all hers and none of it is due to his underwithholding. (Better safe than sorry.)
Hi Leesa,
So you never got any notice that the IRS wanted you to file a return? No certified letter stating that you were being garnished? You just work up one day and all of your money was taken?
So you became a stay at home mom. Are you married? Did your husband file returns? Or maybe you’re not married an your partner is claiming you as a dependent? Somewhere, somehow, you’d think the IRS would have some information on you.
Oh, yes, they did because they had enough information to grab your bank account. So, forgive me if I’m sounding a little surprised that you just woke up one day and the IRS took your money.
But, it’s possible. I shouldn’t scold. I’m sorry. You’re looking for help, and I wasn’t being helpful.
Here’s the thing, The IRS is not going to refund any money from your tax return, but they may refund the $400. I say may, because if it’s not necessary for your 2010 taxes, they may hold onto it because they think it should go on another year. You haven’t filed tax returns for several years. Maybe you didn’t need to. But if the IRS has documents saying that you were working and do owe, well then they’ll just apply that $400 to another tax year. So maybe they’ll give the money back, but they also have good reason to hold it.
Also, you mentioned something about the state. If you owe your state money – they may garnish that $400 before you get it also. If you see that money again, you should consider yourself to be very blessed.
My son divorced his wife this past Oct 2016. He received a letter from the IRS saying he owed over $4000 from a 2013 filing. She had cashed out her 401k, approx. $2000. She didn’t pay the taxes on it and then set up a payment plan. Then she ignored the payment plan and now owes over $4000. Our son is in the military and so she always picked up the mail and so he never seen it.
He has talked to the IRS filled out forms and has a case number. Was told to file and wait while they finished the investigation on the case. They also stated seen she is not responding back to them and any mail with her name on it needs to be sent back to them.
So he filed received money back and this past Friday received a certified letter stating they are going to seize his assets.
He is going to call the IRS again and find out why he got this letter when he has been trying to work with them already or should he just pay it and live with it?
Hope I explained this well enough.
Hi! I have a question please. I forgot to file my taxes in 2010. I was only on unemployment for a few months then moved and didn’t forward my address. I became a stay at home mother afterwards so completely forgot. Have not had to file taxes since I’ve moved so it completely skipped my mind until one day I wake up and check my bank account and there was a state tax levy and it took $400 (all I deposited that day). I called the Irs and they told me because I didn’t file 2010 return they filed it for me and in return I owed them $600. So I got my wage info and etc and file it. I understand after 3 yrs or so I am no longer eligible for a return however my question is since they took $400 from me once my actual 2010 return replaces the one they file for me.. will I get my $400 they took back? 2010 return shows I don’t owe them anything and they actually owe me money. I don’t care for the money they owe me I just want the money they took from my checking account. Please please help.
Thanks Mark for this information.
Speaking from current experience, prepaid debit cards are not safe from levies. Since the fight against terroist funding…..prepaid debit cards are still tied to a bank and although you can load money (usually a low limit like $200) you cannot take cash out or reload with more cash UNTIL you register the card. That means giving up your name, address, and especially SOCIAL SECURITY NUMBER. The? Its game over. ..once my ssn was entered they denied me the ability to register the card. That triggered the system to not even be able to check the balance that i had initially loaded and with most of these prepaid card companies you cant get a live person on the phone. Theoretically it can be registered under another persons name but I would just start with a whole new card since my attempt at registering the card may have red flagged it. But this way money can be used. In fact fictitious names linked to your social may allow the card to be registered but from personal experience it cant be loaded. …anything associated with the ssn is a no-no if you are in this situation.
Hi Lisa,
the problem is his, not yours – at least for now. But here’s something you should know – let’s say that he doesn’t fix his problem and then later the IRS comes after him. And they decide to levy his bank account. Well, since his name is on your account – the IRS could garnish your bank account. So – you might not want his name on your account.
My son is having a refund into a bank account with his and my name on it. I have found he made an error and is going to receive too much back from the IRS? Will I be in any way responsible for repayment of this overpayment to my son?
Hi Emily,
Call the IRS immediately. Sometimes, they can’t process an agreement online, but they can over the phone. You’ll have to wait on hold, but pick up the phone and call. I expect they will want you to pay at least $240 a month – unless there’s some other issue that’s outstanding. And make sure you get your husband started on making estimated tax payments also.
Another thing – maybe it’s time to look at if he’s claiming all of the deductions he can? Or maybe he should be an S Corp? Maybe not. Just throwing some stuff out there to see if it will help. Good luck.
Hey Jan, my husband is one of the “self employed” needed all the income that was coming sort of person till this past year when he actually got a job. So he roughly owes $17,000 and I had no idea it was that much. When i sent in a proposed payment agreement I thought it was $7,000. I did send in a payment agreement though maybe a week and a half ago and now they have sent the dreaded “intent to levy” letter. I found out that you could set up a Payment Agreement online, which is where i found he owes $17,000 and then when I tried to set up that agreement it was denied as well. I even agreed to pay their amount per month but it said they just couldn’t process the agreement. So should i take all of our money out of our accounts? Or should I wait for a letter from the IRS to see what they say. The letter says the levy will happen on the 22nd of December.
Hi Amanda,
I’m seeing a couple of things here. Forgive me for doing a numbered list here, but I want to keep my thoughts straight.
1. It does take the IRS awhile to process those 1099s. (But, I would think they’ve been processed by now!)
2. If the corrected 1099 was prepared and submitted, why didn’t your SO receive a copy then?
3. It would be okay to pay the amount due under protest, until the situation was resolved. But you are right, once the matter was resolved, the IRS would keep that payment for your 2015 taxes.
4. Once you receive the corrected 1099 you can hand deliver it to the IRS – but it won’t correct the situation unless the accountant submits the corrected 1099 to the IRS. I had this problem before. I had a 1099 for a client that showed $2,500 was actually paid in federal withholding taxes. Two years later she got an IRS notice demanding the $2500. I sent the 1099 showing the withholding. The IRS wouldn’t accept it. We went round and round. The problem was with the issuing company because they hadn’t submitted the 1099 to the IRS. (They shouldn’t have withheld the $2500 in the first place but that’s another nightmare.) Anyway, I see how annoyed you must be. It took months to settle that problem.
5. If you could trust the accountant, I would sign the POA, but you don’t trust the accountant and I don’t blame you.
6. If you don’t feel comfortable with signing a POA, be with him in his office when he calls the IRS. Then, together you can talk to the collection agent and he can fax the corrected 1099 along with the signed 1096 (that’s the transmittal copy – you never see those) to the IRS agent, and the IRS agent can receive that paperwork and acknowledge it while you are in the room. This is probably what you need to do. More than you just taking your copy to the IRS.
7. Here’s the tough question. Do you trust the dad? Think about it. Why did the accountant prepare a 1099 for the father using the son’s social security number? Where’d he get the number in the first place? Something smells fishy here.
8. And if nothing else works, I would file an amended tax return. Have your SO claim the income. And then have him issue a 1099 you his dad! So your tax return for that year is not change except for the and and out of whatever that 1099 income was.
7. Keep talking to the IRS. Maybe get your own accountant to represent you.
My significant other is getting levy notices on a 1099 that was filed incorrectly with his social 2 years ago. The accountant filed a 1099 for his father, with my significant others social. He submitted a corrected 1099 months ago (so he says) but they are still threatening. We have even sent them letters stating the income was not his, and the accountant has submitted the corrected forms. Now they have ceased our current payment arrangement we have made for our 2015 federal taxes, and demand the full amount of both sums or they will levy. His father has offered to pay the taxes that should have been his, but we fear if he pays that while they still show it in JR’s name, the IRS will question why we had to make payment arrangements on the 2015 taxes and still try to take the funds…I’m in the process of getting a physical copy of the corrected 1099 from the accountant, but he is rather incompetent and slow. He says the only way he can help is if my spouse signs POA to HIM so he can deal with the IRS for us…Should hand delivering this corrected 1099 to the local IRS fix the solution?
Hi Jenn,
As long as you are on a return with a balance due – the IRS can garnish your account. And you’re right, if he keeps letting the domino effect go – it will only be worse.
Here’s my quick and dirty advice. 1. Get your current year taxes caught up. If 2016 is a lost cause, then make darn certain that you get 2017 estimated payments started. Forget quarterly payments. Do it monthly! You get your phone bill, you pay your IRS estimated taxes. (The phone company never forgets to send you a bill, they’re really good about that.)
Then, either file for an offer in compromise or an installment agreement, depending upon what your income is. I’m currently working on an online class to help people do their own offers. (Why pay a company thousands of dollars when you could use the money to pay off your debt, right?) I’ll be posting information about the class soon.
One thing – and this might not apply, but – if money is really that tight, you could try to get into the “currently uncollectable” status. But, if your husband is making so much that you’ve got a big tax bill every year – you probably won’t qualify for that. Good luck.
I have a couple of questions…my husband has a rather large balance that is owed to the IRS. He was self employed for several yrs and when business picked up during the later yrs, he didn’t file quarterly returns. He thought he would be able to pay in one lump sum, needless to say, he was wrong and that started a dominoe effect, if you will. He was making payments, but stopped awhile ago because business slowed to the point that he basically had no income. (He’s in construction…)He is currently employed by a local construction company and I have urged him to call the IRS and set up a payment plan again, rather than wait for them to garnish his wages, but my concern is this. He wants his checks direct deposited into my checking acct so I can handle the finances, but I’m terrified to have them in there because I don’t want my acct frozen or seized. His name is not on my acct anymore, but we did file jointly the first yr that this debt started. (Since then I have filed separate). I was thinking if his father opened an acct and listed me as an authorized user that that would safeguard his money. He fully intends to pay back his debt, it’s just that we are your basic struggling middle class family and need to utilize as much of our pay checks as possible for our month to month survival and the thought of one day going to access our accounts just to find out that the monies aren’t there, and well, we’re just trying to avoid that route. If we set up an acct this way, could the IRS go after it because my name would be on it and we filed jointly that one yr? Any insight would be appreciated. Thank you very much.
Hi Negative,
My IT guy didn’t want me to approve your comment so I’m responding without posting your question. I hope this post makes sense.
Okay, just for argument’s sake-you get a 30 day notice that the IRS will levy your account-they haven’t levied yet. You open a new bank account, and take all the money out of your old bank account. How long will it take the IRS to figure out you’ve got a new bank account?
It’s time for my standard accounting answer: It Depends!
For example: let’s say you open the new account at the same bank, the IRS sends the levy notice to the bank, the bank might just go ahead and attach the levy to the new account anyway. (I know a guy who got audited, the IRS issued a subpoena for his account statements only-the bank turned over his bank account info, plus all sorts of other stuff the IRS never asked for creating a major problem for the guy.) So, I’m saying that even if the IRS says they are going to levy account XYZ, if it goes to a bank and someone there sees you have account ABC – they might just levy it anyway – because they now know about it.
But say you open the account at another bank and the IRS has not record of you dealing with that bank eveer – then they probably would not know you have an account until after the next reporting period, – February of the next year.
Plus, if they can’t access the bank account, then they could garnish your payroll if you are a W2 employee. And while I don’t think it’s common, I did see them garnish 1099 payments once. I don’t know how often that actually happens, but I did see that one time.
Hi Chaun,
I don’t think it is BS. If the card is tied to an account, then there is the possibility that the card could be traced to you. I believe that the occurrence is rare it is possible. I think you’d have to tell the IRS that you have a pre-paid debit card for them to place a garnishment on it.
Hi. I was recently told the IRS can levy prepaid cards as well (i.e. Amex Serve card) because they are tied to an account with my name & info. Is that BS?
Thanks for this forum. I appreciate it.
Hi Harold,
It’s because the Kansas City office is a national office and is responsible for about half of the country.
Hi James,
I’m not sure I understand your question. You owe $14,000 to the IRS and they are are holding your refund? Or did they garnish your wife’s 401K? I’m sorry. You might need to go see someone in person. You can find an enrolled agent at: http://www.NAEA.org. You can type in your zip code and they will find someone in your area to call.
This is my question, How can the IRS (ACS support) of Kansas City, Missouri, initiate a Notice of Levy, against someone who has never lived in that state?
My wife took out her 401k because the doctors where she was work at where retried. So this was 2yrs ago and they have been taking are income taxes we get back. We own 14,196.25 we need help. Please jim
Hi Christina,
I’m a little concerned about that letter. Usually, the IRS doesn’t tell you which bank account they’re going after until after they’ve already attacked it. For example: you could get a letter saying that they will levy your bank, but they don’t tell you which bank they’re going to levy until the levy’s already in place. So, my guess is – they’ve already put the levy on.
Here’s the thing – normally I would say the IRS cannot levy your bank account if his name isn’t on there. BUT- and this is big, he’s direct depositing funds into your bank account. I’m guessing that he also is allowed to make withdrawals from your bank account – so he has some sort of legal right to your account somehow. So – yes, I’m saying the IRS can do it.
I once had a client with an adult son, the IRS levied the son’s bank account for the father’s debt. The account had been set up back when the son was a child, but he kept the same bank account into adulthood and never changed it. I managed to successfully argue that they couldn’t levy the son’s account since the father had no more access and was just on the account in name only. The IRS accepted that position.
But, they had also levied my client’s adult daughter’s account as well. In that case, the father had been putting money into her account and the IRS could prove that he was actively using it. (Actively using it to help her – but still he had access to the funds.) So the IRS took her money and I couldn’t stop that one.
So, I’m thinking that your account is in trouble. You may be able to talk to the IRS and unfreeze some of the assets if you can prove that your boyfriend can’t access your account or isn’t on there, but I think it’s going to be a tough sell. I would set up a new account in your name only without him. No direct deposit, not access, no nothin’! Until he gets his IRS issues taken care of, you don’t want any of your funds co-mingled with his. It’s too dangerous for you.
My boyfriend got a letter from the irs threatening to seize my bank account. His name is not on my account, but some of his payroll is direct deposited in my account.
I also use this account for my payroll direct deposits. Since his name is not on my account, can they still take it?
Also my ex owned the business and his tax accountants and attorneys did all the taxes. I just signed the form every year. I have no clue how to do complicated taxes. Being single with no business mine take about 20 minutes to do online….
Hi Jan I am now going to speak to a professional. When I received the letter of preliminary determination it says I have 30 days to appeal. I also found out this whole case already went to tax court by petition from my ex without my knowledge. This is why I was denied. I had no idea he did this. Anything I can do there? Just trying to figure out how to do this appeal. Attorneys want $750 just to get started…is this something I can do on my own?
Hi Rose,
So here’s the deal – since you were not granted innocent spouse relief – this IRS holds you to be equally responsible for all of the 2011 IRS debt. Now, the good thing here is that your ex is paying the payment plan. Kudos to him! But, let’s say something happens to him and he quits paying – well then the IRS will still come after you!
I once had a divorced client, he got an IRS letter saying he owed additional tax from a year he was still married. He owed the tax, not his wife. We sent a letter to the IRS saying that he owed the tax, not his wife and that he would pay. His wife filed a tax return and the IRS held her refund to collect on the tax, even though we told the IRS it was not her tax.
So–you see how this could be an issue for you, right?
So, I kind of want to go back to the innocent spouse relief. You say it was denied. Did you have a professional help you with that? I’m guessing that maybe the wrong category was used. If you just categorically deny any tax–that’s pretty hard to prove. But if you could show what part you actually owed, separate from him – or taxes under the divorced decree – you might have better luck. (And if you already did that then I apologize, I’m just trying to get you whatever we can.)
Anyway, right now, as things stand, if your ex defaults on his payment plan, the IRS could go after you for the entire remaining balance due. Sorry.