State and IRS Bank Levy Help: Individual and Businesses

tax bank levy help

A tax professional can help if you're facing a bank levy or dealing with frozen funds due to a bank account levy. Tax attorneys, CPAs, and enrolled agents can represent you in front of the IRS and your state tax agency, and depending on the situation, they may be able to prevent the levy or get the IRS to release an in-progress levy.

Unfortunately, finding a quality tax professional can be difficult. Most of the web serarches for the "best tax relief firms" lead to lists of the big firms that aren't necessarily the best, and sometimes, these companies may even rip you off. To help taxpayers access quality help, TaxCure has curated a directory of tax professionals who specialize in tax resolution. The following sections explain how to find help using TaxCure and what to expect when you hire a tax professional.

How to Find an Experienced Tax Pro on TaxCure

To find an experienced tax pro, simply enter the tax agency you're dealing with and your zip code into the search box below. Then, to ensure you find a pro who has dedicated experience with bank levies, select that from the list of tax problems. If you're experiencing any other problems, you can select those as well. Then, review the list and reach out to the pros who look the best to you.

Why Choose a Local Tax Pro Vs. a Big Tax Relief Firm

The main reasons to consider a local tax pro over a big firm are experience and quality. When you hire a big tax relief firm, you will generally speak with a sales rep who has received minimal training about tax resolution. They may use pressure tactics to get you to sign up for their services, and in many cases, you may not even qualify for what's promised during the first phone call. When your case gets assigned to a tax pro, you may end up never speaking directly to them, and often, they are inexperienced and working more cases than they can handle.

In contrast, when you hire a local professional, you don't have to deal with a big sales and marketing team. You often speak directly to the pro who's working on your case. They get to know your situation, and rather than pushing you into a one-size-fits-all solution, they help you find the right solution for your situation. Additionally, local pros have dedicated experience with your state revenue agency which can be critical if you're dealing with a state tax levy.

How a Tax Professional Can Help with an IRS or State Bank Levy

Turning to a tax professional can be the best way to prevent the IRS or state from seizing your money through a bank levy. Here are some of the benefits of working with a professional:

Help you appeal if you've received a final notice of intent to levy - Before levying your bank account, the IRS must give you a 30-day warning. If you reach out to a tax pro before the deadline on your notice, they can help you request a collection due process hearing. During the hearing, the tax pro will argue against the tax levy, and they will propose payment arrangements or a settlement depending on the situation.
Look for errors in the bank levy process - Once the IRS moves forward with the levy, your bank will freeze the levied funds for 21 days before sending the money to the IRS. At that point, you generally cannot get the levy removed by setting up payments, but if the IRS made an error in the levy process, they must release the levy. An experienced tax pro can look for errors and help with this process.
Prove that you're experiencing financial hardship - The IRS will also release an in-progress levy if you're experiencing financial hardship. Tax professionals know exactly what this means and what the IRS wants to see. If you're likely to qualify for hardship, a tax pro can lead you through the case. If you cannot afford help, you may want to look into the Low Income Taxpayer Clinics (LITC).
Apply for a refund of seized funds - In some situations, the IRS will return levied property. Generally, it's nearly impossible to get funds back after they have been taken from your bank account. However, a tax professional can let you know if that's something to consider in your situation and how to move forward.
Help you make payment arrangements on your remaining debt - If the money seized in the bank levy is not enough to cover your full tax liability, a tax pro can help you work with the IRS to set up payments or make other arrangements on your tax debt.
Negotiate with the IRS or state on your behalf - The IRS and most states prefer working with tax professionals, especially in situations where a levy is involved. The IRS and state tax authorities levy assets as a last resort. In other words, they have tried every other option to get you to pay. When you hire a tax professional, that sends a clear signal that you are willing to make arrangements.
Analyze your situation and help you come up with the best option for you. There is a lot of strategies involved when a state or the IRS issues a bank levy. Tax professionals can set up temporary tax resolutions to stop a bank levy and then set up a more appropriate long-term tax resolution afterward. These professionals have your best interests in mind, and the advice they give you reflects that. The IRS and most states will not tell you the optimal tax solution for your situation. They usually don’t provide insight. They want you to pay as much and as soon as possible.

Tax professionals also know all the IRS and state lingo and how different resolutions work. That can help to improve the chances that your application for a payment plan, settlement, hardship, or other arrangement gets approved. Navigating the situation on your own can be a lot more challenging.

How Does the Free Consultation With A Tax Pro?

Some tax professional and their firms will provide a free consultation. Here are general guidelines on what to expect during the consultation which generally happens over the phone:

First, usually an enrollment agent or a tax professional will ask you questions to assess your tax situation.

Second, the tax firm will complete an investigation if you are unsure what tax years you did not file or what years have liabilities. An “investigation” will provide the tax firm access to your tax transcripts as well as wage and income transcripts (if necessary). Remember, a bank levy is only a symptom of a more significant tax problem.

Third, after analyzing your tax situation and finances, the tax firm will provide various tax options as well as a strategy to pursue to get you back into compliance with the IRS or State. The tax firm or tax pro will explain any fees for tax work.

Fourth, ask additional questions about bank levies and decide whether to move forward with a tax professional or not. There is no obligation. If desired, let the tax team file for Power of Attorney and handle all communications with the IRS or State on your behalf. You will be updated periodically and may have to provide certain documents to complete your case.
Lastly, once your case is complete, the tax professional assigned to your case will offer future guidance. The guidance ensures you do not fall into the bad graces of the IRS or state again.