Irs Bank Levy: What If It Isn't Yours?
IRS Bank Levy: What if it isn't Yours?
You're married and you share everything. But are you willing to risk your personal financial assets - your wages, your retirement fund, the cabin in your name that has been in the family for 100 years? An IRS bank levy can threaten all these things. Do you really want to share the responsibility of dealing with an IRS bank levy for a back tax debt that is not yours? As much as you love your spouse, you may not choose to pay for mistakes made prior to your marriage. You need a qualified tax attorney who understands the system involved in freezing a bank account.
Determining Responsibility
If your spouse is facing an IRS bank levy for a tax debt that occurred before you were married, you may be required to give the IRS your financial information dating back to the time the tax debt occurred. The IRS will then review that information to determine if you are responsible or not:
* If you are not found to be responsible - The IRS will pursue collection from your spouse only. Wages, bank accounts and assets belonging only to your spouse will be open to garnishment, bank levy, lien or seizure.
* If you will be held accountable for some portion - The IRS will determine assess how much you are responsible to pay, the full amount or a portion. IRS collection proceedings will not begin until the amount your tax liability has been clarified.
It is crucial to be represented by an experienced tax professional during this process. You will be ensured of receiving the most favorable IRS decision possible.
Community Property Considerations
The rules change if you live in a community property state. Community property laws allow for an IRS bank levy to be placed on your accounts even if the back tax debt belongs to your spouse. Even if the tax debt occurred before the marriage, you can receive an IRS bank levy. You could be forced to pay a tax debt that does not belong to you. The IRS can use the same methods to collect the tax debt from you that they would if the debt was actually yours. They can freeze your bank accounts, garnish your wages, and place a lien on your property.
When this occurs, you can do one of two things:
* You can accept the debt as your own and pay it. You can leave the IRS bank levy in place and do nothing to fight it. When the tax debt is paid in full, the IRS will release the bank levy. Depending on the amount of the tax debt, this can last for years. If payments are not made, the IRS will step up their aggressive collection actions.
* You have the right to file a spousal defense to have the IRS bank levy released from your account. After providing the IRS with the required financial information, your request will be reviewed to see if you qualify to be released from liability. The IRS will base their decision on the current tax laws and codes. You will either be released from the levy or you will be required to pay the tax debt in full.
Help From a Tax Professional
If your bank account is frozen because of something your spouse has done, it is in your best financial interest to call a tax professional to explore your options. A tax expert will work to have the IRS bank levy released and help you avoid the loss of assets. In the event you are required to pay, tax attorneys are skilled in IRS negotiations. They can ensure you will obtain a fair and affordable payment agreement the will resolve your tax debt problems.
by: Jimmy Newton
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