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A bank levy can be placed by a creditor if you have failed to pay a debt and other collection methods have failed. This can be a terrifying situation to be in. The IRS (Internal Revenue Service) can also place a levy. Both the IRS and other creditors must provide certain notices prior to placing the levy. If you are facing a bank levy or notice of a levy, it is essential that you work with a Ponte Vedra bank levy attorney to protect your assets.
At Tax Smith Tax Attorneys, our team has worked in tax law for many years and has decades of collective experience. We want to help you with your tax issues. Our law firm can determine the ideal ways to resolve your tax debt and limit the impact of tactics like bank levies.
Our team provides compassionate and honest advice for individuals and families because we understand how upsetting this situation can be. A bank levy can severely impact your finances and your day-to-day life. We can work with your needs and your schedule to find creative solutions that can settle and limit your Ponte Vedra tax debt.
Bank levies can be initiated by the IRS as well as by private and consumer creditors. Typically, private creditors must get court approval, but the IRS does not need this. The IRS can use a levy to freeze a bank account. It then removes the money from the account needed to pay back taxes and other debts.
A bank levy is not typically the first step that the IRS will take when an individual or business owes back taxes. Notices of nonpayment and other tactics may be used first. Bank levies and other serious actions are only taken when a taxpayer has a large level of debt and has taken no steps to cover their payments or create a plan with the IRS to repay their debt.
Prior to placing the levy, a creditor or the IRS will inform the individual of their intent to levy an account. This is typically done 30 days before the levy will affect an account. During this time, taxpayers should work with a tax attorney to contact the IRS to find alternate ways to settle and repay tax debt. Failing to take action will result in the levy taking effect.
Levies can be placed on any bank accounts and property that you own, along with any accounts or property that are yours but are currently held by another party.
When the IRS wishes to levy a bank account or other asset, there are certain steps that must be taken first:
When you receive notice of a levy or hearing, you should take action quickly. It can be easier to negotiate, and will better protect your assets, if you can negotiate another way to pay prior to the levy being implemented. A tax attorney can help you decide the options available to you during this time and work to limit your tax debt and the effect of a bank levy.
A: Yes, Florida allows bank account garnishment by creditors. Some types of income are protected from most creditors, or have more limitations, such as veteran’s retirement benefits, Social Security benefits, and disability payments.
The IRS can garnish many types of income and earnings, including wages, retirement and pension earnings, and Social Security payments. It can also place levies on these accounts, preventing you from accessing these funds. There are certain wage garnishment protections if you are the head of household, but you must apply for these exemptions and protections.
A: Bank accounts that cannot be garnished by most creditors include bank accounts open in states that do not allow bank account garnishment for small accounts. A joint account as tenants by entireties owned by spouses is also exempt from garnishment if only one spouse owes the debt. Unfortunately, these exemptions usually only apply to consumer debts, and the IRS can still garnish or place levies on these accounts.
A: There are several methods that may be able to protect bank accounts from creditor levies or garnishes, but these typically do not apply to methods used by the IRS to collect back taxes. These methods include:
A: Yes, a savings account can be garnished or levied in Florida. If the creditor is a consumer creditor or other creditor, they must petition the court for the right to garnish or levy a bank account to satisfy a debt. However, if the debt is unpaid taxes, the IRS or state government does not need court approval to place a levy or garnish an account. A garnish is an amount removed from the account to satisfy the debt, while a levy prevents you from accessing your funds in the account.
At Tax Smith Tax Attorneys, we have worked for decades in tax law and finding creative solutions to our community’s tax problems. Contact our team today.
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