WAGE OR BANK
WHEN THE IRS TAKES MONEY OUT OF YOUR BANK ACCOUNT (LEVY)
When the IRS takes money out of your bank account (levy) or your paycheck (wage garnishment), you have options. You can get the IRS to remove the levy, but only after you pay off all the back taxes you owe, or set up a resolution program that is satisfactory with the IRS. The issuing of a levy is one of the most damaging actions to a taxpayer that the IRS can legally take to collect on back taxes. It hits you where it hurts, in your checkbook, so it is no wonder the IRS uses this quite frequently.
WHAT DOES A BANK LEVY ACTUALLY DO?
A wage levy attaches to your wages and takes a specified % based on what you claim on your WA with your employer. Most of the time, a levy will take the majority of your paycheck leaving very little for you to live on each pay period. Assuming you can't pay all the taxes, the real question is: How long does it take to set up a payment plan of other arrangement with the IRS to stop (or, "release") the levy/garnishment? Unfortunately, the answer to this question is complicated. You could be one of the few taxpayers who can simply set up a Streamlined Installment Agreement to release a levy. However, you may be one of the taxpayers that have to go through a full financial disclosure and negotiation of a resolution program to get the levy released. If you are one of these taxpayers, you need to contact a tax professional that SPECIALIZES in tax resolution.