Understanding IRS Bank Account Garnishment
By: Matt Robinson | Posted: 06th October 2009
Is money in your bank account safe from the IRS? If you think so you would be wrong. No, they are not going to take your money just to do so, but if you owe back taxes this is something that you may face in the future. This is known as bank account garnishment or a bank levy. Simply put, a bank levy is when the IRS freezes your account or money is taken from it in order to satisfy back taxes.
Of course, bank account garnishment is not something that happens overnight. In other words, the IRS is not going to tap into your account without first giving you notice. You will receive notice from the IRS first stating that you owe back taxes. From there, if you don't pay or setup a payment plan they may begin to move forward with the bank levy process.
What type of bank account can the IRS seize? In most cases, they will start with any savings or checking account in which you hold money. One of the most common questions by those worried about bank account garnishment is whether or not the IRS can attack a retirement plan such as a 401k. While the IRS can seize distributions from a retirement account that are in a regular checking or savings account, they usually do not directly access your 401k, IRA, etc.
As noted above, a bank levy is not a process that the IRS starts today and ends tomorrow. Instead, they must first go through several steps; all of which are designed to give you the chance to avoid this altogether. If you find that you owe the IRS money you can easily avoid bank account garnishment, as well as many other issues, by paying the entire debt at once. If you don't have the money the IRS is more than willing to allow you to pay in installments. As long as you show that you are willing to pay back the money a bank levy will never come into play.
It is not difficult to understand how bank account garnishment works. When you owe the IRS money they are going to get it one way or the next, and seizing money from your bank account is an option that will be considered. If you have had your bank account frozen or you know your accounts will be garnished it is important to act fast because you will only have 21 days max until the IRS will receive the funds from your bank. It is highly advised to use a tax professional when dealing with IRS bank account garnishment. A tax professional can quickly analyze your situation and stop the garnishment while they are resolving your tax problem.This article is free for republishing
Printed From: http://www.goinglegal.com/understanding-irs-bank-account-garnishment-1155016.html
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Tags: t pay, checking account, retirement plan, several steps, 401k, installments, ira, retirement account, distributions, levy