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Approaching bank levies logically and systematically

On Behalf of | Aug 3, 2023 | Federal And State Tax Collections |

Serious tax law matters are often complex, and their resolution tends to involve large private and public bureaucracies. Because of this, certain processes can seem to result in paradoxes or inescapable situations.

One example that is frustrating for many taxpayers is dealing with a bank levy. This article will hopefully shed some light on this complicated subject and encourage people to approach the matter logically.

An apparent contradiction

Starting with an example: Imagine that the IRS issued a levy, thereby causing the bank to freeze an account (disallowing access by the account holder, in other words). However, this action prevented the taxpayer from paying the owed amount.

This situation seems like a paradox. However, if the taxpayer shows that the levy is hindering the ability to pay a tax debt, then the IRS must lift the levy.

Many other, similar situations have similar potential resolutions. One does, however, need to understand the exact facts that the taxpayer must supply before the IRS has the obligation to take the desired action in a given situation.

Solutions for various errors and inefficiencies

The bureaucratic nature of the IRS imparts a sometimes-frustrating complexity to tax issues for the uninitiated. However, it does also ensure that there are potential options to handle nearly any issue. Here are some common problems that might find resolution through established forms and processes:

  • Excessive bank fees due to IRS error
  • Funds that the IRS should not have levied
  • Levies of accounts to which the delinquent taxpayer is a signatory

IRS processes tend to advantage those who take quick, appropriate action. Due to the often complex timelines of a bank levy case, acting promptly could potentially resolve issues more efficiently and strengthen the basis for any future action one might want to take.