Embarrassed by several well-publicized cases in which children's life savings were seized to pay their parents' overdue taxes, the Internal Revenue Service yesterday announced new procedures designed to keep this from happening again.

The IRS said it will not ask banks to levy on -- or seize -- any account with a balance under $100, and in a levy case, banks will be asked first to temporarily freeze, rather than seize, any account that bears a name in addition to that of the delinquent taxpayer. The IRS will then take up to 21 days to try to determine the true owner; unless a bank receives additional instructions within that period, the account will be freed.

In the cases in which children's accounts have been seized because of a tax debt owed by their parents, the accounts have carried the Social Security number of a parent, the IRS said. This prevented banks from determining the true owner.

That's what happened last month in the case of 12-year-old Garry D. Keffer of Chesapeake, Va. His parents had fallen behind in their taxes but had mailed a check for the final installment when the IRS directed a bank to seize their accounts. The boy's $10.35 savings were swept up into the same net because his account bore his mother's Social Security number.

The seventh-grader got the attention of the IRS by writing to President Reagan. "I am now feeling distrustful of the United States government due to my financial devastation," he wrote. The IRS has promised to return the money.

IRS Commissioner Lawrence B. Gibbs said in an interview that the new procedure "is in keeping with our initiative of trying to treat taxpayers like customers."

Gibbs acknowledged that friends have read some of the "horror stories" about children's accounts and asked him how that could happen: "Some of the stories indicate we are a large, uncaring, insensitive agency but, believe it or not . . . we haven't done this intentionally."