IRS Collection by Bank Account Levy: Joint Bank Accounts

Per § 6332, the IRS has the right to levy on a delinquent taxpayer's bank account. When the bank is served with a levy, the bank is required to withhold (and after 21 days surrender to the IRS) whatever money was in the delinquent taxpayer's account at the time the levy was served.

Joint Bank Accounts

So what if you have a joint bank account with another person and the IRS garnishes your joint account? According to the Supreme Court, the IRS can levy against a joint bank account of a delinquent taxpayer. As a general proposition, if the delinquent taxpayer had the unqualified right to come in and withdraw the money from the account, then the IRS can levy on it. The IRS steps into the shoes of the delinquent taxpayer and acquires whatever right the taxpayer himself has. If the taxpayer had the right to withdraw the funds, then the IRS has the right to levy on them.

Moral of the story: be careful of joint bank account holders that have (or might have) problems with the IRS!!!