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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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I have both a business account, and personal account with my

Customer Question

I have both a business account, and personal account with my credit union, the IRS has just sent form 8519 to me under my soc sec number and is going to levy my account for unpaid back taxes of 54,247.90. Can they attach to my business account as well? I have checks that came in that I need to deposit and pay my contract labor out of, but obviously don't want to deposit if IRS is going to seize the full amount?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

The simple answer - is - yes - the IRS may levy on your business account.
We may not say if they will - but such possibility exists and you need to be aware of that.

Please be aware that the levy on the bank account works differently from the levy on wages.

The bank levy is NOT continuous and only affects the balance on the day the levy issued. The bank should hold the money for 21 days - so you have some time to negotiate with the IRS before funds are garnished.

That might be the best approach to negotiate an installment payment plan and be current.

Customer: replied 1 year ago.
do you think I would be safe to deposit my clients checks into my Business Checking Account, which is at the same credit union as My Personal Checking Account, so that I can get my business monthlies, contract labor, etc paid? I intend to contact the IRS and negotiate either a settlement, or more than likely a payment plan, I just want to have my ducks in a row prior to, and make sure what I agree to, I will be able to continue to pay through the agreement. Is there a formula for figuring what is an acceptable amount to pay per month for the back taxes owed? We were in an installment plan with the prior to filing personal bankruptcy, but the amount that was negotiated wasn't realistic for us to pay, and then my wife was diagnosed with breast cancer, and we racked up a ton of doctor bills we had to pay too. I just don't want to over promise and under deliver with them again.
Customer: replied 1 year ago.
I also just spoke with the bank, and they haven't received the notice yet? It was dated 9/23/15 on my copy?
Expert:  Lev replied 1 year ago.

As long as you do not have any installment payment plan in place - I do not consider that deposit protected from garnishment.

You may try to deposit SOME checks - and use these funds to pay contractors as soon as possible - that will minimize the risk of garnishment.
After - you may do same steps with other checks.
So far - as you are not informed - and I assume that is confirmed by your bank - that business account is not levied.
But there is no guarantee the woudl not issue the levy tomorrow.
As long as you have outstanding tax debt - there is ALWAYS a risk of levy.
If you have personal financial difficulties - you may have the IRS consider you "Currently not Collectible" - this stops the levy and they stop sending you collection notices.

Please be away that if the IRS issues levy - and you deposit checks AFTER that date - funds are not subject to garnishment.
So in this case - your personal account is more protected.

You may also want to consider just cashing your checks and paying your contractors with cash or money orders until you find a way to resolve this with the IRS.

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