Maine Bank Levy Checklist: Understanding State Tax
Enforcement Actions
What a Bank Levy Means
A bank levy is an administrative action by Maine Revenue Services that allows the state to freeze and seize funds from your bank accounts to collect unpaid state taxes. This enforcement tool does not require a court order because Maine law grants the State Tax Assessor, under
Title 36, administrative power to collect delinquent taxes directly. Your receiving bank will hold frozen funds for 21 to 30 days after receiving the levy notice before transferring them to the state to satisfy the debt.
Why does Maine Revenue Services issue a Bank Levy
Maine Revenue Services levies on bank accounts after a taxpayer fails to pay delinquent state obligations within 10 days of receiving a demand notice under Maine law. The state must send this demand notice by certified mail or by personal service after all administrative and judicial review rights have been exhausted. However, in jeopardy situations where tax collection is at risk, the assessor may issue an immediate levy without waiting for the standard 10-day period to expire as a collection action.
What Happens if You Ignore the Levy
Ignoring a bank levy will not stop the collection process or protect your funds from seizure by this government agency. Your receiving bank must comply with the state’s administrative order and surrender the frozen funds within the statutory 21 to 30-day window. Maine Revenue
Services may pursue additional collection efforts, including wage garnishment through an Order to Withhold, property liens, and suspension of professional or business licenses, if the underlying tax debt remains unpaid after the levy.
Understanding Exempt Property and Protected Funds
Maine law protects certain property and funds from levy under Title 36, section 176-A. Exempt property includes wearing apparel, school books, household items up to certain values, and tools necessary for your trade, not exceeding specific dollar limits. Exempt funds include Social
Security benefits, Social Security income, Unemployment Compensation payments, Veterans’ benefits, federal Railroad Retirement Act benefits, and child support payments required by court judgment.
Your disposable earnings from wages are partially protected: 75 percent of disposable earnings per pay period are exempt, or an amount equal to the federal minimum hourly wage multiplied by 30 and the number of weeks in the pay period, whichever provides greater protection.
Checklist: Steps to Take After Receiving a Bank Levy
Notice
Step 1: Gather All Tax Documents
Locate your original tax assessment, all prior notices from Maine Revenue Services, including any Final Notice of Intent to Levy, and correspondence about your tax debt. Document the tax years involved, the type of state obligations owed, and the total amount claimed, including penalties and interest.
Step 2: Verify the Levy with Your Bank
Contact your receiving bank immediately to confirm whether a notice of freeze or seizure order has been placed on your authorized account. Request written confirmation of the notice of levy, the date your bank received it, and the amount frozen in your account.
Step 3: Contact Maine Revenue Services
Call Maine Revenue Services at 207-626-8475 to discuss your case and request a summary of your current tax account status. Ask for the name and case number of the collection officer handling your debt collection and inquire about available payment options or Tax Relief programs.
Step 4: Review Your Payment Options
Discuss whether paying the debt in full would release the levy immediately or if you qualify for an installment payment plan through Tax Resolution. Ask about the Currently Not Collectible status if the levy creates Financial Hardship and request written information about all arrangements discussed with the collection officer.
Step 5: Document All Communications
Write down the date you learned of the levy and the names of everyone you spoke with at the government agency or receiving bank. Record all reference numbers, case numbers, and account identifiers provided during your conversations, and save all bank statements showing the frozen funds.
Step 6: Follow Up in Writing
Send a written request to Maine Revenue Services by certified mail summarizing your situation and requesting written confirmation of any payment plans or agreements. Include your name,
Social Security number or tax identification number, and the tax years involved in all correspondence to ensure proper processing.
- Missing dispute deadlines: You must file a Petition for Reconsideration within 60 days
- Ignoring prior notices: Maine Revenue Services must send a Final Notice of Intent to
- Assuming automatic relief: A Tax Levy will not disappear on its own, and you must
- Failing to document communications: Always follow up phone conversations with a
- Not checking account status: Verify with your receiving bank whether a levy has
- Overlooking exempt funds: Failing to notify Maine Revenue Services if levied funds
- State tax notice review and response
- Penalty and interest reduction options
- Payroll and trust fund tax assistance
- Payment plan and relief eligibility review
- Representation with state tax agencies
Step 7: Monitor Your Bank Account
Continue checking your authorized account for changes to frozen funds and note when funds are released or transferred to the state. Request a receipt or confirmation from your receiving bank once the levy is satisfied, and review your bank statements carefully.
Common Mistakes to Avoid of receiving an assessment to dispute the underlying debt owed before it becomes final and subject to levy.
Levy or demand notice under Section 171 before issuing a levy, so responding to earlier collection efforts may prevent enforcement action altogether. actively contact Maine Revenue Services to arrange payment plans, request Currently
Not Collectible status, or resolve the debt. written confirmation by certified mail to create a record of what was agreed upon with collection officers. actually occurred because frozen funds will be transferred within 21 to 30 days under
Maine statute. include Social Security benefits, Unemployment Compensation, Veterans’ benefits, or other exempt funds protected under Title 36 could result in wrongful seizure.
Frequently Asked Questions
Will a bank levy stop if I set up a payment plan?
Arranging a payment plan with Maine Revenue Services can prevent or halt a levy in many cases and may qualify as Tax Relief if you demonstrate Financial Hardship. However, you must contact the government agency directly to negotiate terms and confirm that the levy will be released, as frozen funds will not be released automatically without an agreement.
Can Maine Revenue Services levy a joint bank account?
Maine law allows levies on joint accounts, and proposed legislation would require banks to levy solely held accounts first, then joint accounts with spouses, and finally joint accounts with third parties. Contact Maine Revenue Services and your receiving bank to understand how the notice of levy applies to your specific authorized account type.
What if the levy was issued in error?
Contact Maine Revenue Services immediately to explain why you believe the levy is incorrect and request a review of the underlying debt owed. You may request an offer in compromise or settlement at any time, though decisions to decline settlement offers are not subject to appeal under Maine law.
Should I consult a Tax Attorney or Certified Tax Resolution Specialist?
Consulting a Tax Attorney or Certified Tax Resolution Specialist can help you understand your options and rights regarding the levy and underlying state obligations. These professionals can assist with negotiating payment plans, requesting Currently Not Collectible status, or challenging collection actions if you believe errors occurred.
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