Serious problems, dire need of advice, please!

[kelt65]

from Louisiana

I have some serious federal tax problems, but not really the IRS, my question is about levies and what the bank can do.

In May a levy was put against me, which was far more money than I could possibly have, and my checking account was emptied. OK, fine, my fault. My bank, however, did not indicate this on my balance at all and accessed NSF charges against everything I was charging, amounting to about $1000. The forced check was not even visible in my available balance. I called the IRS shortly after it was evident I was penniless and worked out something with them, they informed my no more drafts would be made from my account as long as I filed my returns for the years I hadn't filed by a certain date.

I deposited some money in my account, a loan to get me through. (I have no other money). Two weeks later the same thing happened - I have no money and it is not showing up on my balance. I call the IRS and they have no idea what I'm talking about, and haven't recieved anything from my bank. they explain to me the levy is a one time thing and that the banjk is not supposed to continue to draft funds to the IRS from my account.

I talk to my bank and at first the officer sees nothing wrong with my account, a balance of roughly $4500, except when I point out to him all the inexplicable NSF charges that are there (even more this time). He says he will investigate and the next day my balance shows another forced check to the IRS for the full amount of my balance.

Can my bank do this to me? The IRS agents I talked to say this is not how it is supposed to be handled - the levy is a ONE TIME draft. This has completely ruined me, I can't afford a lawyer, I'm penniless now, and according to my bank, I owe them even more money. The NSF charges due to me not knowing i had $0 amount to over $3000. I can't believe this is legal to completely destroy a person in this way. This does not help anyone, including the IRS, in getting their money, regardless of what I think of taxes. I've switched banks but have no way to pay any bills, I'm screwed. I don't have any money anyway and have a perfectly lower middle class income.

Can a bank really do this? Is it at their discretion to draft money from my account to pay the IRS?

PLEASE HELP

[LdiJ]

Originally Posted by kelt65

from Louisiana

I have some serious federal tax problems, but not really the IRS, my question is about levies and what the bank can do.

In May a levy was put against me, which was far more money than I could possibly have, and my checking account was emptied. OK, fine, my fault. My bank, however, did not indicate this on my balance at all and accessed NSF charges against everything I was charging, amounting to about $1000. The forced check was not even visible in my available balance. I called the IRS shortly after it was evident I was penniless and worked out something with them, they informed my no more drafts would be made from my account as long as I filed my returns for the years I hadn't filed by a certain date.

I deposited some money in my account, a loan to get me through. (I have no other money). Two weeks later the same thing happened - I have no money and it is not showing up on my balance. I call the IRS and they have no idea what I'm talking about, and haven't recieved anything from my bank. they explain to me the levy is a one time thing and that the banjk is not supposed to continue to draft funds to the IRS from my account.

I talk to my bank and at first the officer sees nothing wrong with my account, a balance of roughly $4500, except when I point out to him all the inexplicable NSF charges that are there (even more this time). He says he will investigate and the next day my balance shows another forced check to the IRS for the full amount of my balance.

Can my bank do this to me? The IRS agents I talked to say this is not how it is supposed to be handled - the levy is a ONE TIME draft. This has completely ruined me, I can't afford a lawyer, I'm penniless now, and according to my bank, I owe them even more money. The NSF charges due to me not knowing i had $0 amount to over $3000. I can't believe this is legal to completely destroy a person in this way. This does not help anyone, including the IRS, in getting their money, regardless of what I think of taxes. I've switched banks but have no way to pay any bills, I'm screwed. I don't have any money anyway and have a perfectly lower middle class income.

Can a bank really do this? Is it at their discretion to draft money from my account to pay the IRS?

PLEASE HELP

The bank may or may not have acted improperly, but you have no one to blame for this but yourself. You would have gotten several letters from the IRS before it got to this point, and you could have resolved your issue with them long before your bank account got levied.

Personally I think this country needs some banking reform, because I believe that the overdraft charges and daily negative balance charges that many banks charge are basically usury, which is illegal. I know one young person who ended up owing a bank more than 1000.00, for a 50.00 check that bounced...and it took less than 30 days for that to happen. The bank allowed the person receiving the check to attempt to cash it daily, and hit the account for NSF charges for every attempt, PLUS hit the account for daily negative balance charges. The young person had no idea this was going on until receiving the bank statement.

However, again, you could have prevented this by working things out with the IRS well before they levied your account.

[irsos]

Originally Posted by kelt65

from Louisiana

I have some serious federal tax problems, but not really the IRS, my question is about levies and what the bank can do.

In May a levy was put against me, which was far more money than I could possibly have, and my checking account was emptied. OK, fine, my fault. My bank, however, did not indicate this on my balance at all and accessed NSF charges against everything I was charging, amounting to about $1000. The forced check was not even visible in my available balance. I called the IRS shortly after it was evident I was penniless and worked out something with them, they informed my no more drafts would be made from my account as long as I filed my returns for the years I hadn't filed by a certain date.

I deposited some money in my account, a loan to get me through. (I have no other money). Two weeks later the same thing happened - I have no money and it is not showing up on my balance. I call the IRS and they have no idea what I'm talking about, and haven't recieved anything from my bank. they explain to me the levy is a one time thing and that the banjk is not supposed to continue to draft funds to the IRS from my account.

I talk to my bank and at first the officer sees nothing wrong with my account, a balance of roughly $4500, except when I point out to him all the inexplicable NSF charges that are there (even more this time). He says he will investigate and the next day my balance shows another forced check to the IRS for the full amount of my balance.

Can my bank do this to me? The IRS agents I talked to say this is not how it is supposed to be handled - the levy is a ONE TIME draft. This has completely ruined me, I can't afford a lawyer, I'm penniless now, and according to my bank, I owe them even more money. The NSF charges due to me not knowing i had $0 amount to over $3000. I can't believe this is legal to completely destroy a person in this way. This does not help anyone, including the IRS, in getting their money, regardless of what I think of taxes. I've switched banks but have no way to pay any bills, I'm screwed. I don't have any money anyway and have a perfectly lower middle class income.

Can a bank really do this? Is it at their discretion to draft money from my account to pay the IRS?

PLEASE HELP

The truth is somewhere in between what the IRS is saying and what the bank is saying. But based on 25 years of dealing with this - here is a likely scenario:

The IRS levied your account. There was X amount of money in your account that day. That does not take into account any outstanding checks. The bank puts a hold on those X dollars, which may have still shown in your account balance, but most banks would have removed it into a suspense account and reduced your account by that amount. The bank is required to hold the mony for 21 days before releasing it to the IRS.

Meanwhile, you have checks coming in and bouncing. They are creating a negative balance (if the bank is honoring them) and/or incurring NFS fees.

You call the IRS and work something out but they do not release the levy. After the 21 days - the money is transmitted to the IRS. Perhaps your bank at that time shows it coming out of your account. Either way, you are left in the hole.

It is possible the IRS made two bank levies a few weeks apart but that is very unlikely. Unfortunately for you, only a thorough analysis of this matter by someone who understands how banks and the IRS operate and have all the relevant documents in front of them can really answer your question. I am afraid this may be justice you have to pay for.

[irsos]

I forgot to mention that all the loan you deposited later did was pay off NFS fes or previously dishonored or honored NSF checks

[kelt65]

Originally Posted by irsos

The truth is somewhere in between what the IRS is saying and what the bank is saying. But based on 25 years of dealing with this - here is a likely scenario:

The IRS levied your account. There was X amount of money in your account that day. That does not take into account any outstanding checks. The bank puts a hold on those X dollars, which may have still shown in your account balance, but most banks would have removed it into a suspense account and reduced your account by that amount. The bank is required to hold the mony for 21 days before releasing it to the IRS.

Meanwhile, you have checks coming in and bouncing. They are creating a negative balance (if the bank is honoring them) and/or incurring NFS fees.

You call the IRS and work something out but they do not release the levy. After the 21 days - the money is transmitted to the IRS. Perhaps your bank at that time shows it coming out of your account. Either way, you are left in the hole.

It is possible the IRS made two bank levies a few weeks apart but that is very unlikely. Unfortunately for you, only a thorough analysis of this matter by someone who understands how banks and the IRS operate and have all the relevant documents in front of them can really answer your question. I am afraid this may be justice you have to pay for.

The IRS has told me they have made one levy. The bank evidently decided to take the matter into their own hands. My question is, is this legal? I'm not in need of a lecture (hell, I agree with you) I simply want to resolve my problem at this point, and not be homeless, OK? I don't understand how it can be legal for a bank to tell me I have money while charging me NSF fees for having no money, because they were supposedly "paying the IRS" - but the IRS received only one payment, the initial one, and my bank continued to take funds from my account, more than I earn, in fact. It wasn't until I brought the matter up to a bank officer (weeks later) that they actually did pay the IRS, and reflected this on my account. This seems so heinous to me, that a bank can legally do this.

[irsos]

Originally Posted by kelt65

The IRS has told me they have made one levy. The bank evidently decided to take the matter into their own hands. My question is, is this legal? I'm not in need of a lecture (hell, I agree with you) I simply want to resolve my problem at this point, and not be homeless, OK? I don't understand how it can be legal for a bank to tell me I have money while charging me NSF fees for having no money, because they were supposedly "paying the IRS" - but the IRS received only one payment, the initial one, and my bank continued to take funds from my account, more than I earn, in fact. It wasn't until I brought the matter up to a bank officer (weeks later) that they actually did pay the IRS, and reflected this on my account. This seems so heinous to me, that a bank can legally do this.

Don't post this in a tax law forum, post it in a banking law forum. It has nothing to do with tax law. I was just trying to help you understand what may have happened.