Skip to content
BOL Conferences
Learn More - Click Here!

Thread Options
#1337469 - 02/04/10 04:09 PM Charging a Fee for Levies or Freezes
TBTlady Offline
Member
Joined: Jun 2006
Posts: 64
We are beginning a new process to charge our customers for processing Levies and Freezes received from the IRS, State Comptroller, etc... and wondering how to handle the situation when the balance is less than the $50 fee. Do we only charge if there is sufficent funds to fulfill the Levy or Freeze and our fee? If the balance in the account is $60 and the Levy is for $100 do we take our $50 fee and remit $10 balance?

Return to Top
Operations Compliance
#1337512 - 02/04/10 04:38 PM Re: Charging a Fee for Levies or Freezes TBTlady
Midwest Banker Offline
Gold Star
Joined: Nov 2004
Posts: 349
Cheeseland
1. In the event the account, after processing the levy, has less than the normal fee, we collect whatever funds are remaining. Why should you NOT get any money?
2. You cannot take your fee first. You would process the levy for the $60 and notate this on the response form. In this case, there is no fee to you.

If you are also charging for garnishments and child support (freezes) make sure you check your state statutes to determine if there are any caps set on the amount you can assess

Return to Top
#1337544 - 02/04/10 04:58 PM Re: Charging a Fee for Levies or Freezes Midwest Banker
Al Miller Offline
Diamond Poster
Al Miller
Joined: Oct 2000
Posts: 2,416
Pleasanton CA USA
I disagree. Grab your fee first (except IRS) and remit what is left. Would you also reverse the monthly service charges to give to the levying party?

You cannot deduct the fee from the amount remitted to IRS. We overdraw the account. The customer is likely to make a deposit to cover the overdraft.


Al
_________________________
Al Miller, CRCM
Opinions expressed are my own and not necessarily shared by my employer.

Return to Top
#1337570 - 02/04/10 05:24 PM Re: Charging a Fee for Levies or Freezes TBTlady
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
As noted, the IRS levy has priority over your fee. (Because they say so, not because there is a law or regulation that says so.)

Most other third party claims are driven by state law and my experience is they frequently have unique answers. For example, in one state that I deal with if the claim is an attachment supported by a court order it would be "contempt" for you to take your fee first.

Generic answers are no good here. Research your question based on the type of claim you receive.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#1337952 - 02/04/10 09:36 PM Re: Charging a Fee for Levies or Freezes TBTlady
Hambone Offline
Junior Member
Joined: Nov 2003
Posts: 31
Arizona
As with the other responses the IRS has priority so can not take our fee first. Our state says to follow the same provisions as an IRS levy unless stated differently so we treat them the same. Our "Legal Process" fee is stated in our fee disclosure so we will take the account negative if necessary (with a pledge/hold) for the amount of the legal fee still owed. This is also disclosed in the letter we send with the individuals copy of the levy.

Return to Top

Moderator:  Andy_Z, John Burnett