Here is a call I get more often than you would think. A Tampa couple has a joint checking account at a local bank. The husband owes the IRS from a business that closed years ago. The wife owes nothing. One morning the account is frozen. The wife’s paycheck was deposited into that account two days earlier, and now she cannot pay the mortgage.

She has heard that Florida protects married couples’ joint property. She is right, up to a point. That point is the federal tax lien.

Florida’s presumption for married couples’ accounts

In Beal Bank, SSB v. Almand & Associates, 780 So. 2d 45 (Fla. 2001), the Florida Supreme Court addressed how to treat a bank account owned by a husband and wife. The court adopted a presumption in favor of a tenancy by the entireties when a married couple holds an account in both names, unless the account documents expressly disclaim that form of ownership. In practical terms, the burden shifts to the creditor to prove the account is not entireties property.

For ordinary creditors, that presumption is a big deal. A creditor holding a judgment against only one spouse generally cannot garnish a married couple’s joint account in Florida. The money belongs to the marital unit, not to the debtor spouse alone.

So far, so good. Now bring in the IRS.

Why the IRS can still reach the account

In United States v. Craft, 535 U.S. 274 (2002), the Supreme Court held that the federal tax lien under IRC 6321 attaches to a liable spouse’s rights in entireties property, even when state law would protect that property from the spouse’s other creditors. I explain the reasoning in my guide to tenancy by the entireties and the federal tax lien.

The IRS then told its employees how it would use that decision. Notice 2003-60 says administrative sale of entireties real estate is not a preferred collection method, because a buyer would be stepping into an uncertain interest. Then it says something very different about money: levying on cash and cash equivalents held as entireties property is considerably less problematic and will be used by the Service in appropriate cases.

That is the reason joint bank accounts are where Florida couples feel Craft first. A house is slow and awkward to collect. A checking account is a few keystrokes.

There is an older Supreme Court case in the background too. In United States v. National Bank of Commerce, 472 U.S. 713 (1985), the Court upheld an IRS levy on joint bank accounts where the delinquent taxpayer had the right to withdraw the funds, and it pointed the co-owners to a wrongful levy action as their remedy. The IRS reads those two cases together: if the liable spouse can withdraw the money, the IRS can levy it, and the other spouse must prove what part belongs to him or her.

How a levy on a joint account unfolds

The mechanics are federal. Before levying, the IRS must send a final notice of intent to levy and notice of your right to a Collection Due Process hearing under IRC 6330, at least 30 days before the levy. Once that period passes, a Revenue Officer or the Automated Collection System can serve a Form 668-A, Notice of Levy, on the bank.

Under IRC 6332(c), the bank must hold the levied funds for 21 days before paying them to the IRS. That 21-day window exists so that problems can be fixed, including claims by people who are not the taxpayer. For a Florida couple, that window is everything. My guide on IRS bank levies in Tampa covers the general timeline.

Note what does not happen. There is no court hearing first, no writ of garnishment, and no Florida claim-of-exemption form. A Florida judgment creditor has to go through all of that. The IRS does not. The comparison is laid out in Florida garnishment versus IRS levy.

Protecting the spouse who does not owe

The non-liable spouse is not without rights. Federal law gives a third party whose property is wrongfully levied two main tools:

  1. Administrative request for return. IRC 6343(b) allows the IRS to return property that was wrongfully levied. The usual vehicle is a written claim following IRS Publication 4528, Making an Administrative Wrongful Levy Claim Under IRC Section 6343(b). The claim should explain the claimant’s interest and include proof, such as pay stubs showing the deposits were the non-liable spouse’s wages.
  2. Wrongful levy lawsuit. IRC 7426 lets a person other than the taxpayer sue the United States in federal district court for wrongful levy. There are strict time limits, generally running from the date of the levy and extended by a timely administrative claim. Do not sit on this.

These tools work best with clean facts. If the account holds nothing but the non-liable spouse’s paychecks, that story is easy to tell. If both spouses’ money has been mixed together for years, the analysis gets harder, and the IRS will look at who had the right to withdraw what.

What I tell Tampa couples to do before a levy

If one spouse has an unresolved federal tax balance, assume the joint account is exposed and plan accordingly. That does not mean hiding money. It means arranging your finances honestly so that the non-liable spouse’s money stays the non-liable spouse’s money.

  • Keep the non-liable spouse’s earnings separate. A separate account in the non-liable spouse’s name, funded with that spouse’s own wages, is an ordinary, defensible arrangement.
  • Do not funnel the liable spouse’s income into the other spouse’s account. That is how nominee arguments are born. The IRS can treat an account as the taxpayer’s when the taxpayer is the one really using and funding it. The IRM requires Area Counsel approval before filing a nominee lien, but approval is not hard to get when the facts are bad.
  • Resolve the underlying debt. An installment agreement or other resolution generally stops levy activity. IRC 6331(k) restricts levy while certain installment agreement requests and offers are pending.
  • Read your account agreement. Under Beal Bank, the documents matter. Some signature cards expressly create a joint tenancy with right of survivorship instead of an entireties account. That changes the Florida analysis, even though it does not change much against the IRS.

Retirement funds and benefits in the joint account

Couples sometimes deposit Social Security, pension or other benefit payments into the joint account. Some federal payments have their own levy protections under IRC 6334(a), such as certain unemployment benefits, workers’ compensation and certain service-connected disability payments. Florida’s exemptions under Chapter 222 of the Florida Statutes generally do not limit the IRS, because IRC 6334(c) says no property is exempt from IRS levy except what federal law lists. I cover that mismatch in Florida exemptions versus IRS levies.

When both spouses owe

If the tax debt came from joint returns, both spouses are liable and the account is simply the taxpayers’ account. Entireties ownership gives no protection, because the IRS is a joint creditor. Check the transcripts. Married couples are often surprised by which years are joint.

If the joint liability arose from the other spouse’s income or errors, relief from joint liability is a separate subject with its own rules. It is worth asking about, but it does not undo a levy overnight.

The short version

Florida law presumes a married couple’s joint account is entireties property, and that keeps most creditors of one spouse out. The IRS is the exception. After Craft, the IRS treats cash in an entireties account as reachable to the extent of the liable spouse’s interest, and it has said it will levy in appropriate cases. The non-liable spouse has real remedies, but they depend on records and timing.

If one of you owes and you share an account, fix the setup before the levy, not after. If the levy has already hit, the 21-day clock is running. GetIRSHelp.com has more on stopping IRS levies.

The bank will not call you to talk it over. The money just stops being yours.