Tax Legal Services · Primary-source case analysis

National Bank of Commerce: An IRS Levy Can Reach a Taxpayer’s Joint Account Rights

By Aneeta Mishra and Timothy Chan

Published September 13, 2026

United States v. National Bank of Commerce distinguishes the summary administrative levy from the later adjudication of competing ownership claims.

The levy targeted joint Arkansas accounts

The IRS served a levy on accounts held in the taxpayer’s name with other depositors. The bank refused, arguing that the government first had to determine which portion actually belonged to the delinquent taxpayer.

State withdrawal rights supplied property

Arkansas law allowed each named depositor to withdraw the account funds. That present right was property or a right to property belonging to the taxpayer and therefore fell within the federal levy statute.

Levy is a provisional collection device

The government need not conclusively adjudicate every third-party interest before serving a levy. The bank’s obligation to surrender property is subject to narrow statutory defenses, while codepositors may use wrongful-levy and refund procedures to establish superior ownership.

The bank was required to honor the levy

The Court reversed the dismissal of the government’s action. It did not declare that the delinquent taxpayer beneficially owned every dollar; it held that his withdrawal right permitted levy while preserving statutory remedies for other claimants.

Key takeaways

• Identify the taxpayer’s present state-law withdrawal rights.
• Distinguish administrative levy from final ownership adjudication.
• Respond promptly to levy deadlines and statutory defenses.
• Use third-party remedies to prove a codepositor’s superior interest.