Does an IRS Tax Levy Apply to Protected Funds?

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Question:

Does an IRS tax levy apply to protected funds? Our depositor receives SSI into their dda account.

Answer:

An IRS levy does not fit the definition of "garnishment order" under the Treasury garnishment regulation. The account gets no special consideration when handling the levy. The customer has a right to contest the grab of SSI funds, but he deals directly with the IRS. The bank doesn't intercede.

First published on BankersOnline.com 5/14/12