Can I open another bank account if my account is frozen?
Having a frozen account does not legally prevent opening a new one. In the case that an IRS levy caused the freeze, though, a new bank account does not fix the taxation problem. It will not unfreeze the existing funds nor will it stop the IRS from pursuing unpaid taxes. The most optimal action is to respond directly to the IRS notice.
Is it possible to open a new account after an IRS freeze?
Yes, taxpayers can apply for a distinct account and banks decide whether to approve it. It should be remembered that an IRS levy targets you as a taxpayer, not a specific account number. If the IRS discovers the new bank account, they hold the authority to levy that one as well.
Does opening a new account protect the amounts?
No. A new account does not shield the amount from the IRS. A bank levy captures the funds present in the account at the exact moment the bank processes the order. That specific levy does not capture future deposits. However, the IRS holds the right to issue additional levies until the debt is fully resolved.
A new account enables you to manage day-to-day banking. However, it leaves the unresolved tax debt entirely unaddressed.
What should be done instead of only opening a new account?
Simply read the IRS notice. The IRS requires banks to hold the funds for 21 days before sending the money. Such a 21-day window presents a chance to contact the agency, correct any mistakes, or set up a payment agreement. It is also possible to request a levy release if the freeze establishes an immediate financial hardship.
Immediate actions:
- Read the levy notice & note the exact deadline
- Call the phone number listed on the notice
- Confirm whether the stated balance is precise
- Ask the representative about an installment agreement or other relief options
- Keep copies of every IRS notice as well as all bank records
Does an IRS bank levy take future deposits too?
In typical practice, a single bank levy applies only once. It captures the funds available on the day the bank processes the order. Deposits made upon that date are not impacted by that specific levy. Yet, if the debt remains unpaid, the IRS has the authority to issue another levy in the future.
Dimov Audit can help you respond
If the bank account is frozen and you require support dealing with the IRS, get in touch with Dimov Audit. Our professionals stand available to review the notice, organize the financial records, explain the timeline, and establish a concrete response package.
