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Jax Tax
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Experience:  JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
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My husband just received a notice of levy from the IRS for

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My husband just received a notice of levy from the IRS for back taxes due for 2008. We have filed our tax returns separately for the past 4-5 years or so. It is for a year when he filed an individual tax return. He has not worked steadily for quite a few years, and the debt is due to a large withdrawal he took from a retirement plan. My son and I both work full time and pay the household bills.
I have removed his name from all my accounts since he began showing signs of financial irresponsibility about 6-7 years ago. We maintain separate bank accounts, with the exception of a joint checking at bank “A” in which we always keep just $30. He has an individual checking at bank “B” and I have my own individual account at bank “A”. My two sons also each maintain accounts at bank “A”, on which I am a joint owner. My husband is not on either of their accounts.
We live in Ohio and own our home outright. Ours is an Estate by the Entiretees deed.
I have three questions:
• The levy refers only to attaching an account at bank “A” and references my husband’s social security number. There is no mention of bank “B” whee he maintains his individual account. Since he is only a party to the joint checking in which we keep $30.00, is that the only account at that bank they can attach? I am worried that there might be some confusion and that my individual accounts and those held jointly with my sons will be impacted.
• Should I take the levy notice to my bank and discuss my concerns with them to make sure that my individual accounts and my son’s accounts are not attached?
• Finally, are we in danger of having our house attached and perhaps being forced to sell it?
Please let me know if you need further information.
Submitted: 2 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 2 years ago.

Hello, welcome, and thank you for choosing Just Answer.

 

Please note that the IRS can levy any bank account that your husband is the owner, or part owner of. Even though they have not yet mentioned his personal bank account (Account B), this does not mean that they won't get around to issuing a levy on it. A person normally has 21 days to release the levy or stop it as the bank will hold funds for 21 days before releasing them to the IRS.

 

If your husband is not a joint owner of the accounts with you and your sons, there shouldn't be an issue with them levying those accounts. However, you are dealing with the IRS. They have been known to make errors in this arena. Your thought of going to the bank to discuss this matter is probably a good idea to make sure that no errors are made if the levy is not stopped. Remember, your husband has 21 days to try to stop the levy. Paying the balance due or setting up an installment agreement (payment plan) may stop the levy. He can call the IRS at 1-800-829-1040 and they can direct him on how to set up the payment plan. Depending upon how much he owes in back taxes, financials may or may not be required when setting up the payment plan.

 

Regarding the house...

 

Under a tenancy by the entirety, creditors of an individual spouse may NOT attach and sell the interest of a debtor spouse. Only creditors of the couple may attach and sell the interest in the property owned by tenancy by the entirety. I hope this clarifies matters for you.

Tax.appeal.168, Tax Accountant
Category: Tax
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Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
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Expert:  Jax Tax replied 2 years ago.
I agree with the bank issue. As for the home, the response is incorrect. The Irs can issue a notice of federal tax lien for his debt if the total of all taxes due is over $5000, can opt not to if the balance is under 25k and he sets up a payment plan that will full pay within 60 months before they do, and must if the balance is over $25k assessed. The notice attaches to all property in thwarting county in which it is filed though the lien itself is statutory and attaches to property outside the county. All backgroud. On to the question. The Irs can foreclose on the lien and force the sale of the property. If done they would have to remit your portion of the profit to you bit could keep his. They will not typically take this step if the equity is under $50k. This is not a rule.just procedure. The could do it for 10k. So to answer the question, yes they could foreclose the lien and sell the property. They cannot.however directly seize it as they can the bank account because they can only seize his interest. This is why when only one owner is liable, they opt to foreclose the lien as none will by a half interest but with foreclosure the can sell the entire property. Rules in community property states differ but do not apply in Ohio.
Jax Tax, Tax Attorney
Category: Tax
Satisfied Customers: 1376
Experience: JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
Jax Tax and 8 other Tax Specialists are ready to help you

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