Back taxes cause serious financial difficulties for taxpayers. The most crippling effects are those of a bank levy. When a bank levy occurs, taxpayers are faced with a frozen bank account.
Being unable to access funds places you in immediate financial hardship. If you have a frozen bank account due to back taxes, you may be able to halt the action by proving you have an extreme hardship case as a result. Much is required in order to prove your hardship. The IRS will then review your case and decide if the bank levy should be discharged. Even if it is discharged, you will still be responsible for your back tax debt. You need the help of a tax attorney to negotiate a payment agreement with the IRS.
Facing the IRS
The main thing the IRS is going to look for is evidence that the bank levy is preventing you from supporting yourself and your family. If you are not able to provide essentials for your home, the frozen bank account status may be released. You might once again have access to the money. However, you will have to make a powerful case to the IRS proving the bank levy is the cause of your inability to support your family. You will be required to show compelling examples to support your case. If the IRS believes you, they might discharge the bank levy.
The IRS also may release the frozen bank account status if you prove you cannot pay essential bills due to the bank levy. It is important to understand what the IRS accepts “essential bills”. If you cannot pay bills such as heat, water or electricity (services needed in order to live), the IRS would take that into consideration. Your mortgage payment or rent would also be considered as an essential bill. However, you may not be aware of other expenses that may qualify, and the IRS is not going to prompt you. It is crucial to have a tax specialist with current knowledge of tax laws and codes to help you.
Your Legal Obligations
If you are unable to meet your court ordered obligations, the IRS might also release the frozen bank account. For example, if you are unable to pay your child support because of the bank levy, you need to let the IRS know. They will not force you to miss a child support payment because of IRS collection action. In fact, you could end up in more legal trouble if you choose to miss the court-ordered payment. Bringing this fact to the attention of the IRS adds leverage to your request for release of the bank levy.
If you fail in your attempt to free your frozen bank account, your tax problems will only worsen. The IRS is the most powerful collection agency in the world and is legally authorized to take aggressive collection action. You may experience:
- Escalating interest, penalties and fines
- Wage garnishment
- Property liens
- Seizure of assets
It is imperative to have a tax professional on your side. A tax specialist can help you:
- Obtain the release or prevention of a bank levy
- Correctly document proof that the bank levy is causing hardship
- Ensure that a qualifying financial fact is not overlooked
- Halt IRS collection action while tax debt resolution is in process
- Negotiate a fair and affordable tax liability settlement with the IRS
Tax professionals are skilled in IRS negotiations and knowledgeable of all current tax debt relief programs. You need an advocate on your side.
IRS Tax Attorney