Ezel / IRS Rulings / 201404009

Banks may not deduct processing fees from levy proceeds

Number
201404009
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Banks
Topics
Procedure, penalties, and administration
Code sections
§ 6331
Ruling dated
August 27, 2013
Publicly released
January 24, 2014
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2014, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2014
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel reaffirmed that banks may not deduct processing fees from proceeds collected under an IRS levy. The advice states that this position is based on IRC § 6331 and the applicable regulations. It also points to IRM 5.11.4.3.3 and a standard letter for recalcitrant banks.

Ruling snapshot

  • Question: May a bank deduct a processing fee from proceeds collected under an IRS levy?
  • Outcome: Advice given.
  • Key authorities: IRC § 6331; IRM 5.11.4.3.3.

Full text (IRS public release)

ID: CCA_2013082710260852
UILC: 6331.31-00

Number: 201404009
Release Date: 1/24/2014
From: --------------------
Sent: Tuesday, August 27, 2013 10:26:08 AM
To:
Cc:
Bcc:
Subject: RE: Bank processing fee deducted from levy proceeds

Good morning.

The prelim answer stands. There has been no change in our position, which is based on section
6331 (and the regs) and is addressed in IRM 5.11.4.3.3 (which also references a standard letter
to issue to recalcitrant banks.) Banks cannot deduct processing fees from levy proceeds.

If you need further assistance, just let me know.

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