Unexpected bank account levies by tax authorities can create significant financial distress for individuals and families. In the United States, the Internal Revenue Service (IRS) has the authority to freeze bank accounts when taxpayers fail to settle outstanding tax debts.

Under the Internal Revenue Code (IRC), the IRS must provide a 21-day waiting period after issuing a levy notice before funds can be withdrawn from the account. This period allows taxpayers to contact the IRS to resolve their tax debt or dispute the levy. Notices are typically sent by mail, with the levy becoming effective on the date and time of delivery. While existing funds are frozen at the moment the levy takes effect, subsequent deposits usually remain unaffected.

Handling Joint Account Levies

Your mother or her authorized representative should immediately call the IRS at the number provided on Form 668-A (Notice of Levy on Wages, Salary, and Other Income). She must be prepared to demonstrate that the funds in the account rightfully belong to her. The IRS may request supporting documentation to verify ownership of the funds.

Seeking Compensation for Erroneous Levies

If your bank account was levied after you had fully paid your tax debt, and the bank charged you processing fees as a result, you may be eligible for compensation. To file a claim, complete Form 8546 (Claim for Reimbursement of Bank Charges). The IRS will approve reimbursement only if all these conditions are met:

• The erroneous levy was caused by IRS error
• You bear no responsibility for the error's continuation or escalation
• You responded promptly to IRS communications before the levy occurred and provided all requested information to support your position

Understanding these procedures and regulations can help taxpayers better protect their financial interests. Proactive communication with the IRS and proper representation can minimize the impact of erroneous levies while creating opportunities to resolve tax obligations efficiently.