When the Oklahoma Tax Commission levies your bank account, the bank must turn over funds up to the amount you owe. Unlike a garnishment that takes a portion of ongoing income, a levy can sweep your entire account balance in a single action. Defending against levies requires quick, strategic response.
Timing is critical. Banks may have a brief window between receiving the levy order and turning over funds. If you learn about a levy before the bank processes it, you may be able to negotiate a release. Once the funds are transferred to the OTC, recovery becomes much more difficult.
Contact the OTC immediately upon learning of a levy. Explain your situation and what you can do to resolve the debt. If you can enter a payment arrangement or make a substantial payment, the OTC may release the levy and return funds that haven’t yet been processed.
Demonstrate the hardship the levy causes. If the levied account contains funds needed for payroll, rent, or other essential expenses, make that clear. Business levies that would force closure may be released if the OTC determines that keeping the business operating will generate more collection than shutting it down.
Identify exempt funds in the levied account. Certain income sources, including Social Security benefits and some other federal payments, are protected from levy under federal law. If exempt funds were taken, you can claim them back. Document what portion of your account balance came from exempt sources.
Challenge the underlying assessment if it’s incorrect. Levies based on erroneous assessments shouldn’t proceed. File a formal dispute and request that collection be suspended while the dispute is resolved. If the assessment is reduced or eliminated, levied funds should be returned.
Establish a payment arrangement to prevent future levies. The OTC levies accounts because voluntary payment hasn’t happened. Getting into a sustainable agreement and staying current prevents future levy activity.
Consider your broader financial situation. If levies are part of a larger debt picture with multiple creditors, you may need to consider more comprehensive solutions. Bankruptcy, for example, stops collection through the automatic stay.
If you’re facing bank levy activity from the OTC, contact us immediately to protect your assets.
