If we received a check from a business for services provided but theIRS has placed hold on account, what do we do?

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If we received a check from a business for services provided but theIRS has placed hold on account, what do we do?

We received a $6500 check from a builder for a modular home we set for them. After we received check we found note attached stating to hold check until bank released funds. Builder wouldn’t return calls so called bank and found funds were not available. Found out that IRS has placed a hold on these funds. Do I need to deposit check? How do we proceed so we can get the money due us?

Asked on September 8, 2010 under Business Law, Pennsylvania

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you deposit a check where funds are probably not available, you need to immediately call the IRS and speak with the IRS about those monies. If the funds are not available and the IRS will not allow you to deposit (i.e., won't release funds), you may need to consider the possibility of repossession or taking back the modular if you can quickly disassemble.  If you cannot disassemble, you need to consider suing the company and hoping you can get the monies back fairly quickly. 

If the builder will not return phone calls, try contacting the attorney general in your state and any contractor's board.


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