Criminal Defense Lawyers

If you’re reading this article on our website, it’s likely because the government just froze your bank account and you’re wondering what happens next.

Here’s like what happened: Your card got declined at the ATM. You call the bank, and they are telling you there’s a government hold on your account. Frozen. Can’t access your money, bills are due in three days, and nobody’s explaining what’s happening or how long you got.

The Truth They Don’t Tell You

Here’s what they don’t tell you. By the time your bank account freezes, the investigation’s already over and a determination has already been made. The IRS or FBI already spent 6-12 months reviewing every transaction you made, they identified all your other accounts at different banks, they know your employment situation for wage garnishment purposes. At this point – they literally know everything, and anything, about you and your business, and your accounts. The freeze isn’t the beginning of them looking at your finances. It’s the end.

-And you got maybe 72 hours to figure out if this is a civil tax collection or a criminal forfeiture proceeding, because the response procedures are completely different than each other and using the wrong one can cost you everything.

Criminal vs Civil – Which Type of Freeze You Got

There’s two completely different legal procedures that both freeze your bank account, but they have got different names, different timelines, different requirements. Most people can’t tell which one they’re dealing with. That’s a problem. And that’s why you need a criminal defense attorney like the ones at Spodek Law Group, to help you and assist you.

Civil Levy Indicators

If the IRS sent you five warning letters over the past six months – CP14 notice, CP501, CP503, CP504, then the Final Notice of Intent to Levy (Letter 1058 or LT11) – this is a civil levy under 26 U.S. Code § 6331. The government is collecting unpaid taxes through administrative process. You had warnings. This is tax debt collection. This can be as easy as simply paying the debt, and moving on.

Criminal Forfeiture Indicators

If your account just froze with no prior warning letters, if you never got multiple collection notices, if the amount of money involved is:

• Over $70,000 in alleged unpaid taxes OR
• Over $150,000 in transactions they’re calling “structured to avoid reporting”

• this is likely criminal asset forfeiture. Different game entirely, and you need a criminal attorney.

How to Tell the Difference

Here’s how to tell. Civil levy = months of warning letters first. Criminal forfeiture = seizure warrant from a federal judge with no advance notice to you. If you got warnings, it’s civil. If your account just froze out of nowhere, it’s probably criminal investigation. The difference can mean hiring an attorney, or not.

DOJ uses dollar thresholds for criminal prosecution:

• $70,000+ tax debt OR
• $150,000+ suspicious transactions
• First offense with cooperation stays civil
• Repeat offenses with obstruction go criminal

If it’s civil, you got appeal options. If it’s criminal, get federal criminal defense counsel immediately – anything you say to investigators gets used at trial.

What Government Knows (And The Timeline Nobody Tells You About)

Most people think the freeze means the government’s starting to look at their finances, they’re going to investigate what’s been happening with your money and figure out if there’s a problem, but that’s wrong – the freeze means they already spent 6-12 months looking at everything, they identified every account you got through FinCEN databases and bank reporting networks (your business account, your savings at the different bank, joint accounts, even accounts where you’re just an authorized signer), they obtained employment records months ago to assess whether wage garnishment is worth pursuing if the bank levy don’t satisfy the debt, they identified the patterns showing structuring or suspicious transfers or unreported income or whatever they think you did wrong, and by the time your primary account freezes at Hour 0 they reached conclusions about all of it, the freeze isn’t investigation phase it’s enforcement phase, and here’s where the timeline gets worse because you just found out your account’s frozen but they’ve known about every transaction for the past year and now you got maybe 72 hours max before everything connected to your name is frozen too:

The 72-Hour Timeline

• Hour 0: Primary account freezes
• Hour 24: The bank reports the levy to FinCEN like they’re required to do under federal banking regulations
• Hour 48: The other banks where you have accounts receive the levy notification because the IRS didn’t just levy one account they levied “all accounts in the name of the taxpayer” and your savings account gets hit and your business account gets hit
• Hour 72: Your joint accounts freeze and business accounts with your SSN freeze and even accounts where you’re an authorized signer can freeze

So there’s no backup account, everything connected to your name is frozen within three days, and if this is IRS civil levy you got specific deadlines under IRS Publication 594 but here’s what they don’t tell you about those deadlines – everybody talks about the 21-day hold period:

Critical Deadline Information

• Day 1: Bank freezes
• Day 1-21: They hold the funds
• Day 22: Money transfers to IRS

<u>BUT</u> to stop the transfer before it happens you got to file a Collection Due Process hearing request and the IRS takes 4-6 business days to receive and process that request which means your effective deadline isn’t Day 21 it’s Day 15, you file on Day 19 thinking you still got time and by the time they process it and update their systems it’s Day 22 and your money’s gone, you’ll eventually get the CDP hearing but the funds are transferred during that whole process, meanwhile if this is criminal forfeiture instead of IRS levy there’s no 21-day period at all, the government got a seizure warrant from a judge under 18 U.S.C. § 983 and:

• The account froze immediately
• You got 10 days to file claim of ownership
• 30 days to file an answer
• If you miss those deadlines the money’s forfeited by default, no appeal, no hearing

And the burden’s on you to prove the money came from a legal source not on the government to prove it didn’t, so this is the information asymmetry problem in action – you’re trying to figure out what’s happening and whether you should “explain” to the IRS that these were legitimate business expenses or show them documentation proving you wasn’t trying to hide anything, but you’re misunderstanding the entire timeline because they already reviewed whatever documentation exists, they already made determinations about your intent based on the patterns they identified, they already concluded that your explanations don’t matter or they wouldn’t of froze the account in the first place, the freeze is their conclusion not their question, and the amount of time you got to respond correctly depends on which type of freeze it is and most people can’t even tell the difference between civil levy and criminal forfeiture until it’s too late.