Levy may attach to an entire jointly held account

Plain-English summary

Chief Counsel Advice addressed ownership of funds in a jointly held account when determining a taxpayer's ability to pay and collecting by levy. It states that ownership is presumed to be divided equally unless the taxpayer proves otherwise. Citing the National Bank of Commerce case, it explains that a levy can attach to the entire account when state law gives the taxpayer an unrestricted right to withdraw the funds, although a codepositor may later claim that some money belongs to that person.

Ruling snapshot

• Question: How should ownership of a jointly held account be treated for ability-to-pay and levy purposes?
• Outcome: Advice given
• Key authorities: IRC § 6331; IRM 5.8.5.5; National Bank of Commerce

Full text (IRS public release)

ID: CCA_2011031108283850 Number: 201115022
Release Date: 4/15/2011
Office: ----------
UILC: 6331.00-00

From: -----------------------
Sent: Friday, March 11, 2011 8:28:44 AM
To: --------------
Cc: --------------------------------------------------------------- Subject: RE: Hotline Calls--2011 OVDI

For purposes of determining ability to pay, ownership is presumed to be in equal shares unless the taxpayer demonstrates otherwise. See IRM 5.8.5.5. In the levy context, the Supreme Court held in the National Bank of Commerce case that where under state law the taxpayer has the unrestricted right to withdraw funds from a jointly held account a levy attaches to the entire account. The levy, however, is provisional and subject to a later claim by a codepositor that the money in fact belongs to him or her.