Houston Bank Levy Release

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Houston Bank Levy Release

A tax professional working with clients to get a bank levy release from the IRS.

A bank levy is one of the most severe actions the IRS may take to collect a back tax obligation. Levies are also known as account freezes or asset seizures because the process enables the government to simply take the assets as they please. A tax levy can be crippling to your finances and devastating to your future, not to mention weighing heavily on your mind.

But there is good news. With the right help, you can seek the removal of a bank levy. Securing this bank levy release, however, may require help from a qualified, expert Houston tax service like Instant Tax Solutions. Seeking a tax levy release requires extensive documentation and often negotiating an agreement to satisfy the conditions for release. That is why we are here. We have worked with both individuals and small businesses for over a decade and have the knowledge to take on the task of freeing you from this financial burden.

We know the documentation required. We understand the process and mindset of the IRS when they apply these levies. We know how to provide the documentation and rationale to argue for your levy release.

If you have seen your accounts frozen or are worried about the IRS seizing your property, you are not alone. Reach out to our Houston tax lawyers today and let us help. Just call (888) 921-3781 or fill out our contact form for a free, no-obligation consultation today.

Why Seek a Houston Tax Levy Release?

A bank levy can be devastating to your finances. It can make it impossible for you to pay other bills even while you struggle with your tax debt. You can suddenly find yourself unable to access your funds, watch your bank accounts drained, or even lose paychecks. Without relief, you can quickly find yourself well underwater in multiple areas of your financial life.

Just as bad, a bank tax levy shows up as a black mark on your credit report, which can make it difficult for you to do things like getting credit cards, buying a car, or refinancing your mortgage to bring down your monthly payments.

A tax levy is an extreme act by the IRS that is used to embarrass and intimidate you into settling your past debt. The tax levy release services through Instant Tax Solutions are here to help lift that burden and return your peace of mind.

What Is a Bank Tax Levy?

The most common types of levies placed by the IRS are wage garnishment, asset seizure, and bank account levies. The latter is by far the most common type of levy. The IRS can institute a bank levy, or freeze your accounts, any time you default on a payment plan. These levies can be attached to just about any type of bank account — checking, savings, business accounts, or others.

When the bank gets notification of a levy, they freeze your account for 21 days, after which they are released to the IRS. After this period, the money cannot be retrieved. Each levy is a one-time action, but the IRS can continue to issue levies as often as your debt is outstanding.

To issue a levy, the following factors must be established, all within 30 days prior to the levy:

  1. The IRS has assessed your tax burden
  2. They send a Notice and Demand for Payment
  3. They issue a final notice of the intent to levy and inform you of your rights to a hearing.

Levies are issued if you default on an installment agreement, fail to file past due tax returns, or fail to pay a back tax obligation.

What Is Asset Seizure, and What Can the IRS Take?

Asset seizure is exactly what it sounds like. The IRS can take your personal property to help them recover some of the amount you owe. After taking your assets, the IRS will sell them to you and apply the proceeds to reduce your outstanding debt.

It is important to note that tax levies are outside of the Constitution’s restrictions on reasonable search and seizure. This means the IRS does not need a court order. So long as the agency meets the qualifications listed above, they can issue a levy against your accounts or property.

Just a few of the types of assets that the IRS may seize include:

  • Vehicles, including cars, boats, and private planes
  • Life insurance assets
  • Bank accounts
  • Investment accounts
  • Real estate, including your home
  • Income tax refunds
  • Wages and earnings
  • Securities and contracts
  • Licenses and franchises
  • Business assets
  • Inheritance assets

The IRS cannot seize non-luxury clothing, provisions, personal effects, and furniture up to a specified total value nor books and trade tools up to a specified value, as well as all unemployment benefits, worker’s comp payouts, job training benefits, child support, welfare, Social Security, and some other public assistance funds or deposits.

It is important to note that in Texas, there is no individual income tax. This means that a bank levy will not be issued by the state in regards to your tax burden. Only federal taxes are subject to bank or tax levies in this state.

Understanding the Houston Bank Levy Process

The bank levy process includes several steps, which begin with a series of letters and notices, plus a grace period for you to get current. The first step is a simple reminder notice that you are late and giving you 10 days to respond. Second, a balance due notice is sent with a second 10-day period.

Third, you will get a notice that the IRS intends to place a levy. You no longer have a grace period and must respond immediately. Next, you get a final notice of the intent to levy. At this point, you get 30 days to settle your account before the levy goes into effect. You can also appeal the IRS’ decision to levy within this period. Finally, you will receive a notice that the levy has been implemented.

How to Release a Bank Levy

After the levy is enacted on an account you own, your funds will be frozen for 21 days. This period is your window to get the IRS to lift the bank levy from your account. It can be extremely difficult for an individual taxpayer to qualify for a release. To do so, you must qualify for one of several very specific conditions:

  1. You have paid your tax debt in full
  2. You successfully filed an amended tax return that reduces your burden to zero
  3. Your monthly expenses are higher than your income
  4. The levy is the result of an error by the IRS
  5. You share your bank account so the funds do not belong to you
  6. You are already behind on bills such as medical bills or mortgage
  7. The bank levy actually stops you from paying the balance due
  8. The levy otherwise creates an unreasonable financial hardship

Note that filing an IRS extension does not extend the due date of your payment; it merely extends the time you have to file your tax return. Arguing that you meet one of these conditions for a levy release requires knowledgeable and experienced help from a service like Instant Tax Solutions. We are ready to talk to you about your options today.

Can I Appeal a Levy Removal Denial?

You can appeal the decision if the IRS denies your levy removal. You can also appeal the IRS’ decision to place the levy if you act within the 30-day final notice period before the levy is implemented. It is vital, however, that you work with a tax professional to undertake this process. You will need to attend a CDP, or Collection Due Process hearing where you must present evidence to show that you do meet the qualifications for removing the levy.

Successfully earning a favorable appeal decision often requires extensive experience and knowledge that a seasoned tax professional can provide. It is also your final opportunity to remove the levy outside of just paying the debt. This is why it is important to take action quickly and contact the bank levy removal professionals at Instant Tax Solutions right away.

Does a Released Bank Levy Eliminate Taxes?

Releasing your levy does not mean your taxes are forgiven. You still owe the money, and the IRS can continue to take action against you. If your release was related to a hardship claim, they may reinstate a levy if they re-evaluate your financial situation and decide that the hardship has passed.

It is best to seek tax relief as soon as you can. In some cases, seeking tax relief at the same time as seeking a levy release can be helpful.

Tax Debt Relief Options

The IRS offers four specific options for debt relief which your tax professional can help you to negotiate.

The first of these is known as an offer in compromise. This means that you agree to pay a lesser amount, and the IRS agrees to settle your debt for that amount.

Next is a basic installment plan. This means that the IRS works out a schedule of payments that let you gradually pay down your debt.

Penalty abatement is a third option, which lets you eliminate penalties and interest associated with your debt. This lowers the total amount you need to pay.

Finally, you may be able to file an amended tax return for prior years, which lets you add credits or deductions you did not realize you could claim, and lower or eliminate your debt as a result.

Get Help With Your Houston Bank Levy Release

Bank levies are devastating, scary, and stressful. Getting one released requires experienced, expert help from the Houston tax levy relief services at Instant Tax Solutions.

We can help you explore your options and stand by your side the entire way as an important ally in your struggle. If you face a levy, do not wait.

Get started today by calling us at (888) 921-3781, or reach out online and schedule your confidential, no-obligation consult today.

Asset Seizure and What The IRS Can Take

Asset seizure allows the IRS to directly take your personal property to satisfy a tax liability. After the assets are seized, they are sold to reduce the outstanding tax debt. The US Constitution, on unreasonable searches and seizes, does not apply to IRS levies. The IRS is not required to go to court prior to issuing a tax bank levy and seizing property. However the IRS must fulfill the following requirement before it can seize most property:

  • The tax must have been assessed
  • A Notice of Assessment has been sent to the taxpayer
  • It must demanded payment of the taxes owed
  • The taxpayer must have neglected or refused to pay the assessed tax  within 30 days after the notice and demand were sent

Assets Subject to Seizure in a Levy:

  • Cars, boats, airplanes, and luxury vehicles
  • Cash value life insurance
  • Accounts Receivable
  • Stocks and bonds
  • Your home and other real estate you own
  • IRAs, Keogh, and other retirement accounts
  • Pension or profit-sharing plans
  • State income tax refunds
  • Securities, contracts and promissory notes
  • Dividends and rental income
  • Licenses and franchises
  • Pending inheritances

Typically, asset seizure occurs only after your IRS case has been assigned to a Revenue Officer.

Assets Exempt from IRS Seizure:

  • Certain clothing (does not include mink coats or other luxury couture)
  • Fuel, provisions, furnishings, and personal effects worth up to $7,430 in total
  • Tools of your trade and books up to $3,710
  • Books for school
  • Benefits for unemployed individuals
  • Worker’s Compensation payouts
  • Certain funds received as public assistance
  • Benefits from job training
  • Child support as ruled by the court (if the judgment is dated prior to the levy)
  • Certain deposits made to the Special Treasury fund by members of the Armed Forces and Public Health Service employees
  • Some disability payments
  • Minimum exemption amount of wages, salary and other income
  • Welfare or SSI payments

Letters or Notices You May Receive

There are many different notices sent by the IRS informing taxpayers of a levy.

The IRS is required to notify the taxpayer, at least 30 days in advance, of its intent to levy on salary, wages and other property.

CP 501 – Reminder – Balance Due

The CP 501 is a reminder notice that is sent prior to the Notice of Intent to Levy. This notice informs the taxpayer of an unpaid balance still due on their account. The taxpayer is allowed 10 days to respond to the notice before the IRS pursues further collection action.

CP 503 – Second Notice – Balance Due

The CP 503 is a levy notice that follows the reminder notice stating the balance is still pending and full payment is due 10 days from the date of the notice.

CP 504 – Urgent Notice – Balance Due

The CP 504 is a notice stating the intent of the IRS to issue a levy. Immediate communication with the IRS is required to prevent a levy against your assets. There is no more grace period.

CP 90/CP- 297 – Final Notice of Intent to Levy

The CP 90/CP 297 notice informs the taxpayer the IRS intends to levy. Salary, wages, bank accounts and personal property are at risk. You are allowed 30 days from the date of the notice before the IRS issues the levy.

CP 91/CP-298 – Final Notice Before Levy on Social Security Benefits

This CP 91/CP-298 is a notice that tells you the IRS intends to issue a levy against fifteen (15) percent of your Social Security benefits because you still have a balance due on your tax account. You have 30 days from the date of the notice to contact the IRS.

CP 523 – Notice of Intent to Levy – You Defaulted on Your Installment Agreement

This CP 523 levy notice is sent when a taxpayer defaults on their Installment Agreement. Either you missed a payment, have a new balance due or you did not file your tax return. You have 30 days to respond to this notice before the IRS levies your assets.

Form 668-W – Notice of Levy

Form 668-W informs you that the IRS has issued a levy to collect back taxes. This notice will also be sent to a third party such as your payroll or bank. The notice requires your payroll department or your bank to withhold funds and send them directly to the IRS.

Once the levy is issued, it is imperative you call the IRS immediately to try to get it released. The IRS does not release a levy easily; however there are certain circumstances when they will.

Form 668-D – Release of Levy

If the levy is released, the IRS will mail and/or fax Form 668-D to your bank or payroll. This notice releases all wages, salary, or other income that was previously levied. Occasionally, the IRS will agree to a partial release of the levy.

Tired and frustrated with your tax problems? Start a worry-free day and get IRS bank levy release assistance from a tax attorney.

Having Your Wages Garnished, and Other Forms of Employee Levies

Once the IRS becomes unwilling to wait any longer to collect the taxes you owe, they can levy your wages by issuing a wage garnishment. The most common types of IRS wage garnishments are:

  • Employee Garnishments
  • 1099 Garnishments
  • Federal Payment Levy Program (FPLP)

A Notice of Levy informing you of the IRS wage garnishment will be mailed to you.

Employee Garnishments

The IRS can demand of your employer that a portion of your wages be withheld from your paycheck and sent directly to the IRS. Keep in mind, although there is a small exempt amount that cannot be levied, this amount is often not enough to cover regular living expenses. A garnishment upon wages is a continuous levy. It is issued only once and remains applicable to all future wages until either it is released by the IRS for cause or the debt is fully paid.

1099 Wage Garnishments

This type of garnishment applies to payments owed to non-salaried subcontractors not on the regular payroll. A garnishment of 1099 wages is a one-time levy as opposed to a continuous levy. The employer is required to hold up to the amount owed to the IRS. This levy attaches to 100% of the funds not yet paid to the sub-contractor at the time the garnishment is received. The levy does not apply to future 1099 payouts. Electronic Federal Payment Levy Program (FPLP) This type of wage garnishment applies to government employees and recipients of Social Security payments. This program electronically levies your federal payments paid through the Department of Treasury, Financial Management Service. Under the Federal Payment Levy Program, the government generally withholds 15% of the wages/payments to reduce past due tax liabilities. It takes longer to release this type of garnishment. The levy can remain in effect for several weeks after the IRS agrees to release it due to lengthy government processing.

Releasing a Wage Garnishment

Negotiation with the IRS is required to obtain a wage garnishment release. Possible qualifying reasons for release are:

  • You set up an Installment Agreement
  • You promise to pay the total tax debt within a certain time frame (i.e. 60 days)
  • You already paid the entire tax liability
  • You filed an amended tax return showing you do not owe the tax
  • Your monthly expenses exceed your monthly income
  • You are behind on your mortgage, rent or medical bills, etc.
  • The levy was issued due to an IRS processing error
  • The levy inhibits the full collection of the balance due

Frequently Asked Questions about Levies

How am I notified about a bank levy?

The IRS will mail you a copy of the original Notice of Levy that was sent to your employer or financial institution. Many taxpayers find out about a bank levy first either from their bank or employer.

What should I do after my bank account is levied?

You should immediately get proper representation prior to any contact. The tax professionals at Instant Tax Solutions are experts in negotiations with the revenue service. Attempting to deal with them on your own can lead to less than favorable results.

How long does it take to release a levy?

It depends on the situation. Most bank levies can be released in 1-2 business days. Exceptions are:

  • Your case has been assigned to a Revenue Officer
  • Your case has been placed in the Large Dollar Unit for balances over $100,000
  • You are not compliant in the filing of past due tax returns

Do I get a warning before a levy is issued?

Yes. They are required to send a Final Notice of Intent to Levy to your last known address. If you no longer live there, you may not receive it.

Can the IRS levy Social Security?

Yes, up to 15% of each payment.

Can the IRS levy state tax refunds?

Yes, if your state participates in the State Income Tax Levy Program (SITLP).

How do they know what bank accounts I have?

They are aware of only those bank accounts that earned interest in previous tax years. Banks are legally obligated to report any interest paid to their account holders. Your bank will send you a copy of the 1099 Interest Income report at the beginning of the year. Therefore, if your bank account does not earn interest, the IRS probably does not know about it. If you have submitted a financial statement to the IRS when entering into an Installment Agreement, all bank accounts listed will be known and subject to a bank levy.

Are joint accounts subject to bank levies?

Yes, a bank levy can be issued to any account attached to the tax debtor’s social security number, even if the funds are not theirs. They will release the levy if the delinquent taxpayer can prove that the funds are not theirs, and that the funds in the account are not commingled.

Are my IRAs protected?

No. However, the government will only levy IRA’s as a last resort since liquidating the IRA early will create a taxable event.

What is the difference between a tax levy and a tax lien?

A tax levy allows the government to actually take your wages, bank accounts and personal property to pay the taxes owed. A federal tax lien is a claim against your assets and will show up on your credit report.

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Linda C.
"The entire staff was very helpful and courteous through the process with no gimmicks."

The experience was a painless one with no hassles of hoops to jump. I had a debt of $16,000.00 and ended up paying $1,700.00. They handled everything from start to end with a very positive resolution. The entire staff was very helpful and courteous through the process with no gimmicks. Keep on with the GREAT work.

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I had ten years of taxes I hadn’t filed. I was really nervous and didn’t know what to do. I checked the IRS website for tips on selecting a company. Instant Tax Solutions had a good rating and made me feel comfortable working with them. A burden has been lifted from my shoulders. Thank you Instant Tax Solutions!

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I had a very serious tax problem, I was basically looking at the end of my life as I knew it. I called Instant Tax Solutions and within 3 days my levy was released and the monthly installment agreement was far better then I could have ever hoped for.

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