Is the IRS getting ready to levy your bank accounts and wages?
If they are, how do they know where you bank and work?
In most cases, your bank or employer tells them.
Sometimes, the information the IRS has to levy was supplied by you.
If you have a bank account that pays you interest, that interest is reported to the IRS on Form 1099 INT, along with the name of your bank. Your bank isn’t reporting the information to the IRS because they want to, they are doing it because they have to. Tax laws require banks to tell the IRS the amount of money that they pay you. The reason is to permit the IRS to make sure that you are reporting all of your income on your tax return. But that information is also used by IRS collections to identify where you bank to levy your accounts.
The same is true of where you work. If you are self-employed and work as an independent contractor, tax laws often require your customers to report the amount that they pay you to the IRS on Form 1099-MISC. Again, the IRS uses this information as a match against your tax return to ensure that all of your income is on it. But the IRS database that contains the name and address of customers who paid you is also available to an IRS Revenue Officer or IRS Automated Collection Service employee to use to levy your pay.
An IRS levy on subcontractor pay is only valid on what you are owed at the time; they are not ongoing and continuous on future pay.
However, if you are employed and are paid wages, an IRS levy is continuous on every paycheck until the levy is released. And your employment is reported to the IRS on Form W-2, and is made available to IRS collection personnel.
It is possible that you may have previously paid the IRS with a check, either as part of a prior installment agreement, or to pay the tax due on your tax return when you filed it. Presume when you pay the IRS, they retain the banking information you provide them with your payment, and can use that to levy you.
Bear in mind the information that the IRS has about your bank accounts and wages is not absolutely, 100% current. The IRS has the information from your prior years’ income and tax returns. If they IRS wants to levy you in 2014, for example, they will be relying on information in their database that was reported to them on your 2013 taxes. If you are no longer banking or employed at the same place you were previously, an IRS levy could go to an empty source.