What Do Other Bankers Do?

The question has come up frequently when operations people get together on whether or not to charge a customer for service of a levy. BANKERS' HOTLINE did a survey and came up with some interesting facts.

Some institutions charge as much as $50 to perform the service of a levy on an account. Most charges, however, fall in the $25 to $35 range. A surprising point was the fact that the most institutions do not charge at all!

When asked why there was no charge for levy service, the response most often was, "We just never have. Is it legal?"

Of several attorneys asked about charging, the clearest answer came from one who quoted the Constitution of the United States: "Nor shall private property be taken for public use, without just compensation." That's why I.R.S. pays us for copies of records when we have to supply them under subpoena.

The next question arose on whether to charge the account from "left over money" or "up front."

Some institutions will only charge the customer if there is enough in the account to pay both the levy and the charge. Most, however, will charge service charge "up front", and send the I.R.S. any funds remaining in the account as the "balance" of the account.

Almost all of the institutions who charge a fee for the paper work refund the service charge to the customer in case of I.R.S. error. A few, however, do not. The 21 day delay on mailing the funds has, fortunately, reduced the complications due to I.R.S. error.

If you are not presently service charging for a levy, you might want to consider it as a source of income to help offset the expense of handling. Remember, it must appear on your declaration of service charges.

Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 3, 3/90