- The Internal Revenue Service collects federal income taxes in the United States. The agency has the authority to pursue collection of unpaid sums without the requirement of prior approval through the court system. In other words, the IRS does not have to obtain a judgment to come after your assets. As such, the IRS can seize and sell your personal property, such as cars, homes and boats, and levy your bank accounts, tax refund, retirement accounts, employment wages and the cash loan value of your life insurance.
- Although the IRS doesn't have to seek a court order to levy your bank account, according to the IRS, it doesn't pursue a levy until the agency has sent you a Notice and Demand for Payment, you refused to pay the taxes owed and then were sent a Notice of Intent To Levy and Notice of Your Right to A Hearing at least 30 days before the levy. The levy remains in effect until the IRS releases it, the tax debt is paid or the time expires for legally collecting the debt.
- Within 30 days of receiving the notice, you have the right to request a Collection Due Process hearing with the Office of Appeals. To qualify, you must file a request for a Collection Due Process hearing with the IRS office. The contact information for the local IRS office in your area is included on the notice that you receive. At the close of the hearing, the Office of Appeals will make a determination on your case, and if you wish to contest the determination of the hearing, you have 30 days from that date to do so.
- If the IRS levies your bank account, the bank must place a hold on those funds in your account for 21 days. The bank can hold up to the total amount that you owe to the IRS. The hold is to allow for any resolution concerning the ownership of the account. After 21 days, the bank must turn the funds over to the IRS. If the IRS mistakenly levies your account and you incur bank fees, you have up to 30 days to file an appeal with the IRS and request reimbursement.
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