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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.
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.