Can I use my bank account again after an IRS levy?
A common question about the impact of an IRS levy on a bank account:
I just looked up my bank account balance, and saw that the IRS sent a levy to my bank. The bank took almost $2,500 out of my account. I am scared to put more money in the account – I do not want the IRS to take that too. What should I do?
An IRS bank levy is a one-time only debit from your bank account. After your bank processes the levy and makes the deduction from your account, any money you put in the account afterwards is yours.
The IRS computers would have to issue another levy to take additional funds, which is generally very unlikely to happen in rapid succession. You can continue to use the account and deposit money into it after the levy, although sometimes there is a preference to move banks even though future deposits are not subject to the IRS levy.
It is also important to know that although the levied money is no longer in your account, the IRS does not immediately get it. The bank is required by law to hold the money for 21 days. This gives you a very important window of time to contact the IRS and negotiate a release of the levy. If the levy is released in 21 days, the bank will return the money to your account.
An IRS bank levy is different from an IRS wage levy. The wage levy is continuous; the bank levy is not.