How to Contest an Improper IRS Tax Levy on Your Bank Account

When you incur a debt with the Internal Revenue Service, it's your responsibility to make payment in full or arrange an installment agreement or an offer in compromise to settle the debt. If the debt is not settled, the IRS will initiate seizure of your assets via a levy. If you believe the levy is in error, follow a few strategies to get it removed.

Things You'll Need

• Computer with Internet access

Instructions

1. Call the IRS customer service line at 1-800-829-1040, or call the phone number included on your levy notice. If the balance due was paid in full before the date when the levy was issued on your bank account, you are entitled to a refund of the full amount. The collections agent in charge of your file will be able to review your payment history and determine when the payments were received and if an error was made in crediting the payments to your account.

2. File Form 12153, Request for a Collection Due Process Equivalent Hearing. On Form 12153, explain your reasons for requesting that the levy be removed from your bank account. You can say why you believe the levy was in error, or you can make a case for having an installment agreement set up as a substitute for the levy. In addition, if the debt was incurred by a spouse or former spouse, you may be able to argue that the debt belongs solely to him or her. Also, keep in mind that the statute of limitations for IRS collection of debt is usually 10 years. If the statute has expired, you should request that the levy be removed from your account because the IRS has failed to collect during the time frame set by law. Get a copy of Form 12153 by going to www.IRS.gov, and be sure to include a copy of your levy notice with the completed form.

3. If it's determined that the IRS made a mistake by issuing the levy and you incurred fees, file Form 8546 for reimbursement of bank charges due to an erroneous levy (see Resources).

Tips & Warnings

• An IRS levy on your bank account authorizes the bank to hold the money for 21 days and then forward the funds to the IRS. For this reason, it is in your best interest to resolve the matter as quickly as possible.

References

• Internal Revenue Service

Resources

• Form 8546
• Form 12153