The Comptroller’s office is telling me I have to put a hold on a negative balance and any deposits made within 60 days, from the day the levy was received, need to go towards the hold amount. Here is the scenario I’m dealing with…

4-18-12 Received Notice of Levy for $5000. Customer was negative $500. Sent back notice account was negative.

5-11-12 Comptroller’s office called and the customer had a positive balance of $900. I didn’t put a hold on the $900 b/c I had answered the levy on 4-18 as the account having negative balance and I didn’t have another Notice of Levy in hand.

5-16-12 Received another Notice of Levy. Customer was negative when I pulled the account up. Sent back notice account was negative.

6-13-12 Comptroller’s office called and is looking the $900. Customer is currently negative again.

Should I have put a hold on a negative amount or watched the account for 60 days and held the positive balance when there was one? Any guidance to regulation would be appreciated.

They have to hit you with an offical notice when there are funds in the account. The phone call is not effective. If they persist, call your legal counsel.

(d) On receipt of a notice given under this section, the person receiving the notice:

(1) within 20 days after receiving the notice shall advise the comptroller of each such asset belonging to the delinquent or person to whom an unpaid determination applies that is possessed or controlled by the person receiving the notice and of each debt owed by the person receiving the notice to the delinquent person or person to whom an unpaid determination applies;

(2) may not transfer or dispose of the asset or debt possessed, controlled, or owed by the person at the time the person received the notice for a period of 60 days after receipt of the notice, unless the comptroller consents to an earlier disposal; and

(3) may not avoid or attempt to avoid compliance with this section by filing an interpleader action in court and depositing the delinquent's or person's funds or other assets into the registry of the court.

If I am reading (h)(2) correctly, I should have watched the account for 60 days and held any money which came into the account? This doesn't make sense to me if it is what I am to do, escpecially if the deposit made was to cover a negative balance.

(h) A notice delivered under this section is effective:
(1) at the time of delivery against all property, rights to property, credits, and/or debts involving the delinquent taxpayer which are not at the time of the notice subject to an attachment, garnishment, or execution issued through a judicial process; and
(2) against all property, rights to property, credits and/or debts involving the delinquent taxpayer that come into the possession or control of the person served with the notice within the 60-day period provided by Subdivision (2) of Subsection (d) of this section.

A phone call isn't notice.

I would have placed the hold on the account and also notified the Comptroller the account was currently in the neg. I was under the assumption Liens & Freezes- You could hold the whole amount requested even if it is unavailable at the time of delivery.