Yes, when the IRS issues a Final Notice, your wages and personal bank account are fair game. The IRS can later seize other property, such as real estate or a 401(k). A tax lawyer possesses several tools to stop a levy once one starts.
A wage levy attaches to your paycheck and transfers it to the IRS after deducting tax withholdings and exemption amounts, which are far from generous. Complete the exemption form that is included with Form 668-W, Notice of Levy on Wages, Salary or Other Income, which is the levy form issued to your employee. See Publication 1494.
Unlike wage levies, the IRS can levy your entire bank account. However, you have a 21 day waiting period from the time the levy is issued until the time the bank pays the IRS. It’s vital you negotiate an alternative collection method during this time, and I suggest you get a tax professional on board who will take immediate action.
It’s also critically important to understand that IRS can only levy what is in the bank account the day the levy is issued. For example, if on the 10th of the month the IRS issues a levy and there is $100 in the account, they get $100. If the next day $2000 is deposited in the same account, it is not subject to levy. Even so, banks routinely freeze the entire account, and that is wrong. If this happens to you, sign a release directing the bank to pay only the funds in the account on the levy date. The bank should then un-freeze the account.
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