1. Levied all of his bank accounts
2. Levied the Credit Card processing company -- that processes all of his transactions.
All of these levies are noted by the form 668A -- Notice of Levy.
It is important to know that the form 668A represents a one-time levy on a bank account or accounts receivable.
Here's how the levy reads:
"Banks, credit unions, savings and loans, and similar institutions described in section 408(n) of the Internal Revenue Code must hold your money for 21 calendar days before sending it to us. Anyone else, we send a levy to must turn over your money, property, credits, etc. that they have (or already obligated for) when they would have paid you."
"Anyone else" refers to accounts receivable. This sentence is the most frequently misinterpreted sentence in collections. Many accounts receivable (including the credit card company in the example described) interpret the levy as CONTINUOUS, i.e., all monies from this day forth go to the IRS.
This is a wrong interpretation. The IRS wants you to send what you HAVE, or what you are CURRENTLY obligated for. The same applies to the bank levy. The bank is required to freeze the money they HAVE and send it in 21 days. It does NOT pertain to future deposits. Otherwise, the bank would turn out to be a permanent collection agent for the IRS -- why would the client bother to keep an account there?
The 668-A is NOT continuous.
Unfortunately, on many occasions we have to talk to the legal counsel for the accounts receivable to clarify this distinction. But you would think that through a careful reading of the levy, they would figure it out!
