Can the IRS Take Money Out of a Western Union Transaction?

When tax issues arise, individuals and businesses must navigate a complex legal landscape. One common question that arises is whether the Internal Revenue Service (IRS) can take money directly from a Western Union transaction. This article explores the intricacies of such situations and provides essential insights for taxpayers.

Understanding IRS Tax Levies

The IRS can levy assets and transactions as a means to collect unpaid taxes. A levy is a legal process that allows the government to seize property, including payments or money transfers. However, the IRS must follow specific procedures and timing to ensure the levy is valid and effective.

Western Union Transactions and IRS Levies

Western Union is a popular financial service that facilitates money transfers across borders. If you owe taxes and receive a Western Union transaction, the IRS might attempt to levy the funds. However, there are specific conditions that affect the success of such a levy.

Timing is Crucial for IRS Levies

The effectiveness of an IRS levy on a Western Union transaction depends on when the levy is served. For a levy to attach to the funds in question, the IRS must serve the levy during a specific window of opportunity.

For example, consider a situation where:

The IRS serves a levy on Western Union on April 1, demanding the withholding of funds owed to Billy Black. The Western Union request is not initiated until April 5.

In this case, no funds would be levied because the type of levy would only attach to funds owed to Billy Black (BB) by Western Union (WU) on April 1. Since there were no funds in WU's possession by that time, the levy would be considered invalid.

Timeline and Legal Processes

For the IRS to successfully levy funds from a Western Union transaction:

The IRS must serve the levy during the small window between when the Western Union order is received and when the funds are delivered to the taxpayer. The Western Union must be in possession of the funds to be transferred to the taxpayer at the time the levy is served.

If the levy is not received by Western Union until after the funds have already been delivered to the taxpayer, the levy is too late to be effective. This can create misunderstandings and potential legal disputes.

Protecting Yourself from IRS Levies

To protect yourself from IRS levies on Western Union transactions, consider the following steps:

Be aware of IRS correspondence: Keep a close eye on any IRS correspondence, as it may contain levy notices. Timely response: Respond promptly to any notices to avoid permanent legal action. Engage with a tax professional: Consult with a tax attorney or financial advisor to understand your rights and options.

Conclusion

While the IRS can attempt to levy funds through Western Union transactions, the process requires strict adherence to legal and procedural guidelines. Timing is a critical factor in the success of an IRS levy, and taxpayers should be vigilant in protecting their financial assets.