Can the IRS Garnish your Savings account with student loans in it?

Question

Somehow, and I don't know how, I had a tax levy garnishment on my savings account statement. I allowed my student loan refund to go into the account and the IRS took nearly all of it. I did not receive any letters that I had a lien against me. There was a grant that I had from another state (where I think this problem might stem from) but I had to leave because the neighborhood was overrun with drugs and people acting like they are possessed by demons... literally waiting on my porch trying to sell meth with guns and everything. I would've cut my legs off to get out of there but I was and still am slowly crawling out of a financial hardship and it was my only option at the time. I am now in a safe neighborhood, going back to school after waiting a year to be a state citizen and am close to being able to work. I'm just wondering how it's legal for this garnishment to take place when I haven't even been informed about it, have not received one phone call, not one notice on my door, nothing saying I owed them or the state anything. I just don't understand how this happened without any notice, I didn't even think I owed grant money back but I guess since I had to leave state in a rush due to the unsafe environment and could not finish the semester they took it back? I just have no clue. Wondering if I go to the bank later and find out what this is what my options are since they took student loan money, never mentioned whatsoever they were going to or what for, and what they do when you are low income with children and are eligible for most social programs(charities)? they actually do this to those who are dirt poor and are just trying to survive through a tough time? Whats the best way to start figuring this out? I'm not trying to be irresponsible, I check my snail mail every single day, voicemail, e-mail, messages do not usually escape me. This is literally seems like its out of nowhere.

Answer 1

Yes, they can take it back. Be thankful they are not pressing fraud charges. It is not exactly legal to take student grants and not be a student.



This may not be over yet. You obviously belong in jail, and the state may still put you there.

Answer 2

The IRS didn't have to tell you that your account IS levied, But you got a number of notices that you owed, including at least one that if you did NOT contact them they were going to levy your account.



They can take any money that's in the account. It's legal. Once the money is in your account it isn't student loan money any more.



If it's not really tax money, but money you owe the state to repay a grant, same situation, they can take money from your account, you owe it. Sorry, but if you didn't know, you SHOULD have known you owed it.

Answer 3

you would have been notified by IRS of any lien they were planning to levy on your bank account

of course, if you have moved and not let them know of your current address, form #8222, you probably didn't get the notice

and yes, monies in a bank account are not identified as student loan money, the whole account is up for grabs

if the problem lies with something wrong with your former state you need to address this issue with them

you may have things confused, IRS will offset your refund or levy your bank account for IRS obligations(and child support), the state will process their claims

Answer 4

Landlord- just wondering, since when is it a crime to move? You really think a young lady worried about someone breaking into their house and/or assaulting them is worried about that student loan grant? A grant is supposed to be free money, so what they're saying is they did not think they owed anything to anyone. Furthermore, why would you put in all those address notifications if you are trying to make leave of a place like that? Would you be more worried about safety, or the money the IRS doesn't need? Think about it. There is not one single law that says the questioner cannot leave the state - no matter what the circumstance. You Sir, are a douche bag.

Answer 5

It's not a garnishment, it's a levy. HUGE difference. A garnishment requires a court order while a levy does not.



The IRS only resorts to levies if you have been ignoring them for an extended period of time. It starts with a gently worded request for payment which is followed up each month by increasingly threatening demands for payment. The final demand is sent by Certified Mail, Return Receipt Requested and warns you that if you do not either pay or make satisfactory payment arrangements that the IRS will commence enforced collection actions including bank and wage levies, property seizures, etc.



The IRS never notifies you by phone or e-mail. They ONLY notify you by First Class letter mail. If you moved and failed to notify the IRS of your new address and failed to put in a change of address notice with the Post Office, you screwed yourself.



The money is gone and they only way that you can get it back is to either prove that you didn't owe it in the first place or prove that the IRS failed to follow procedures in seizing the funds from your bank. They will provide proof that they notified you and that the notices were either returned as undeliverable or were not returned at all. That leaves you with proving that the debt didn't exist in the first place, however once the IRS resorts to levy action it's generally too late to appeal the amount alleged as due without going to the Tax Court.



If you still owe the IRS anything, contact them NOW and set up a payment plan. They can levy your account again if there is still an outstanding balance and you fail to make arrangements.



For future reference, any time that you move, send the IRS a Form 8822 http://www.irs.gov/pub/irs-pdf/f8822.pdf and put in a change of address at the Post Office that services your old address. Had you done so, you would not be in the mess that you are now.

Answer 6

Yes, they can. Once the money is in your account, it doesn't matter what the source is.



The IRS can only contact you via the address of your last return, etc. If you never gave anyone your new address...they sent the notices to the old address, b/c that's what they had.



Best way is to call IRS and discuss. Unless you didn't actually owe the money, you won't get it back.

Answer 7

The IRS NEVER levies an account without plenty of notice. Not ever. So you must have moved without telling them were you were. You need to contact the IRS asap and discuss this with them, though it is unlikely that you will get anything back.

Answer 8

Sure does sound like you missed out on some of your mail and notices some where in your past life history about this matter BUT we here on this website do not know what all could really be going on with you and your situation at this time in your life.

And you are the only one that will be able to take care of it your self at this time in your life.

Hope that you find the above enclosed information useful. 11/13/2012