For many people, tax season is mostly about hitting “file” before the deadline and hoping the refund lands in their bank account. Yet for those who skip key paperwork or leave old tax bills unpaid, the story can look very different.
In serious cases, the Internal Revenue Service can freeze a bank account and scoop out the money to cover overdue taxes, affecting both U.S. residents and foreign nationals who have tax obligations in the country.
That scary-sounding step relies on a tool the IRS calls a levy, which it defines as the “legal seizure of your property to satisfy a tax debt.” It can reach wages, money in bank or other financial accounts, and even vehicles or real estate.
Recent alerts circulating in Spanish language media have focused on one particular risk. People who do not complete a mandatory tax form or who fail to file returns on time can see their case escalate from simple letters to full collection action.
Once the IRS assesses a debt and sends a series of notices, including a formal notice of intent to levy, the agency can legally move to seize assets if there is still no response.
What the IRS can actually take
In practical terms, a levy can touch several parts of everyday life. IRS guidance explains that the agency may garnish wages, take money from bank or similar financial accounts, and seize and sell cars, real estate, and other personal property when taxes remain unpaid.
A bank levy is especially disruptive. When a levy reaches a bank, the funds in the account at that moment are frozen. After that, the Internal Revenue Code requires the bank to hold those funds for 21 days before sending them to the IRS. This waiting period exists so the taxpayer can contact the agency, set up a payment arrangement, or point out an error.
Taxpayer advocate materials note that a bank levy is usually a one-time event that grabs only what is in the account when the bank receives the order. Future deposits are not automatically taken unless the IRS issues a new levy.
So a person might wake up, try to pay rent or buy groceries with a debit card, and suddenly discover that their account is locked. From the bank’s point of view, there is no room to negotiate once the levy arrives.
Where credit cards and foreign residents fit in
What about credit cards? The IRS does not literally confiscate a physical card. Its own rules focus on accounts and property, not plastic in a wallet.
In practice, though, a levy can still ripple through someone’s credit life. If the checking account used to pay monthly card bills is frozen, missed payments can pile up. If a levy hits a business account that processes card sales, that can temporarily choke off the cash flow that keeps a company’s credit lines open.
The rules do not distinguish between citizens and noncitizens. U.S. tax law applies to “any person” who has a federal tax obligation, and that includes many foreign residents and nonresident aliens who earn U.S. source income.
To file, those taxpayers often use an Individual Taxpayer Identification Number, or ITIN. The IRS stresses that an ITIN is “for federal tax purposes only” and does not change immigration status. It does, however, link a person to a U.S. tax account, which means they are subject to the same collection tools as everyone else when a tax bill goes unpaid.
How a missing form turns into a frozen account
Many of the current warnings focus on a simple administrative misstep. A required form or tax return is never filed. That can trigger automatic alerts inside IRS systems, followed by bills, reminder letters, and eventually a notice of intent to levy if the apparent debt is not resolved.
By law, the IRS must send written notice of its intent to levy at least 30 days before taking a person’s property, except in rare “jeopardy” situations where there is a risk the money will disappear. That notice must also explain the right to appeal.
In other words, an account freeze does not come out of nowhere. It usually follows months of ignored mail.
What taxpayers can do now
For most people, the most important step is also the most basic. Do not ignore IRS letters, especially final notices that mention a levy or the right to a hearing. If a required form looks confusing, asking a tax professional or contacting the IRS directly is safer than setting it aside.
Even when someone cannot pay in full, the agency often accepts installment agreements or may place an account in temporary hardship status. IRS guidance explains that a levy can be released when the taxpayer resolves the underlying bill, when the levy creates immediate economic hardship, or when it was issued in error.
For residents and foreign taxpayers alike, the message is similar. Filing required forms on time, responding quickly to notices, and getting help early can keep a temporary paperwork problem from turning into a frozen bank account at the worst possible moment.
The official guidance was published on the Internal Revenue Service website.
