Is The Government Able To Levy Shared Accounts With Just One Individual Responsible?

Brief Answer: Yep However, initially lets learn a little more about the IRS levy: An IRS levy is a legal seizure of assets in order to satisfy a tax debt. When can the IRS impose a levy? The Government will often levy soon after these three requirements are met: 1. The IRS assessed a tax balance and delivered a “Notice and Demand for Payment” 2. The receiver has disregarded or overlooked notices and the balance has gone unpaid. 3. The IRS delivered a “Final Notice of Intent to Levy” at least 30 days before levying. The IRS sends notices to your last known address on file. Exactly what kinds of levies are there? There are four common forms of levy sources for the IRS. 1. Bank Account: A bank levy happens when the IRS removes funds straight from your bank account. You will generally not know it until it has already taken place. The bank will be required to freeze the funds up to the total amount owed at the time the levy came. If the levy is not released within 21 days, the bank is obligated to send the funds to the IRS. So long as the responsible taxpayer’s social security number is on a joint or other 3rd party accounts, the IRS is allowed to levy it. Irrespective of whose funds were deposited into the bank account, this is still true. Bank levies are typically tough to have released because the IRS calculates “ordinary and necessary living expenses”, however, the IRS basically takes the position that if you have money sitting in the bank, you do not require it for necessary living expenses or you would have already spent it. "Undue hardship" is the other. You will have to usually provide utility disconnect notices or an eviction notice. 2. Levy on Wages: Sent to your employer or company. This levy requires that your employer withhold a percentage of your pay. Up to 85% of your pay can be legally levied. Social Security payments can also be levied by the IRS. 3. Third party accounts: This would consist of retirement accounts, stock accounts, 1099 sources and primarily any income source or assets with a few exceptions. 4. Assets: Usually a challenge for the IRS to place, making it the least common levy issued. This is any type of asset, such as houses, vehicles, boats, etc. How to Stop IRS Levy Action? File your tax returns, repay the debt in full, or negotiate. It’s important to remember that before an IRS levy can be eliminated, all unfiled tax returns have to be filed. The IRS won’t even consider a discharging a levy until all accounts are current. Next, if you pay the tax liability due the IRS will release the levy. Bankruptcy will also bring the levy to an end. Unable to pay the balance? Then either set up an Installment Agreement, submit an Offer in Compromise or have the case put in a section 53 (hardship). I always err on the side of recommending expert assistance. An experienced professional will know how to speed the process along, how to work the tax laws, and what financial disclosures to include and exclude. The IRS levy must always be taken seriously, however with a bit of education, you can come through, or around, a most taxing situation.