Why Would the IRS Freeze a Bank Account?

When the Internal Revenue Service (IRS) freezes your bank account, it's also known as a bank levy or a bank garnishment. An account is usually frozen by the IRS when you refuse to pay past due taxes.

Significance

When a bank account is frozen you will not have access to the funds in the bank account. Sometimes a portion of the money or all of the money will be frozen.

Geography

The IRS does bank levies on accounts in the United States but the nation can also go after off-shore bank accounts.

Prevention/Solution

The IRS will have a bank levy done only when someone repeatedly ignores their request for payment of past due taxes. The IRS will send letters and request that you contact the agency to make repayment arrangements.

Considerations

When the IRS freezes your bank account any checks outstanding will be returned for non-sufficient funds. No money can be removed from the bank account. You can make deposits to the account but no withdrawals.

Features

The IRS can file a bank levy over and over again until your outstanding debt has been paid. The bank levy will only put a hold on the amount of money that is owed.

Time Frame

When the IRS does a bank levy the bank is required to hold the funds for 21 days. Once the allotted time has passed the bank must turn the money over to the IRS.

References

• Banklevy.org: Resolve your tax debt fast