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IRS Tax Levy - Funds Less than Amount Levied
by John Burnett, BOL Guru
Guru Bio
Question: For an IRS tax levy with funds on deposit less than the levy amount, can deposits be accepted to the account and would these be subject to the levy? Our feeling is that account(s) should be blocked to prevent any transaction during the 21-day hold period.
Answer: IRS levies reach funds in an account at the time the levy is served only. Those funds are held for the IRS for 21 days before sending them along, in order to provide the customer an appeal to the agency. Deposits made after the initial funds are held or set aside are not covered by the levy. You should not rely on that when dealing with state levies, however. Some state agency levies can reach all funds deposited to an account for a period of time following levy service.
First published on BankersOnline.com 4/07/08
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