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If you ignore IRS notices, phone calls and letters, the IRS will start what
they call Enforced Collection. Again, it is a way for them to get your
attention and collect the delinquent taxes. Locating the bank or other financial
institution can be difficult for the IRS. However, if you had interest or
dividend income in the last few years, the IRS knows where to start. Just like
your W-2, these 1099 forms show the name and address of the financial
institution that may have your money or property (stocks, bonds, etc.).
Seizure of your bank account or your assets is the ultimate action in their
collection efforts. The IRS sends a Notice of Levy to the financial institution
informing them that you owe taxes. The IRS requires them to freeze all the money
in your account(s) as of that day. This includes all accounts with your social
security number. You are then unable to use any of those funds to pay your
bills. This freeze may cause your checks to bounce. The bank must hold these
funds for 21 days. At the end of that period, the bank must remit the funds to
the IRS.
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