Bank Levy
The IRS has the right to issue a bank levy on an account that bears the name of a taxpayer who owes the IRS money. The IRS must give the taxpayer notice. Notice constitutes several letters with the final letter bearing a Final Notice of Levy. After the IRS has sent out the Final Notice of Levy, it can issue a bank levy after 30 days from the date of the letter.
A Notice of Levy is sent to the taxpayer’s bank and it attaches to all accounts in the name of the taxpayer whether a sole or joint account. The bank is legally obligated to honor the levy. The levy freezes the funds on deposit in the account. The bank cannot allow anyone access to the frozen funds for 21 days from the date of receipt of the levy. On the 21st day, the bank must send the frozen funds to the IRS.
