Tax Levies
When the IRS takes your money or property.
What is a Tax Levy?
A tax levy is the IRS's power to actually take your property or money to satisfy a tax debt. Unlike a lien (which is just a claim), a levy means the IRS is actively seizing assets.
The most common levies hit bank accounts and wages, but the IRS can levy almost anything of value: your car, your house, your business equipment, accounts receivable, even your retirement accounts in some cases.
If you've received a levy notice, or worse, if the IRS has already frozen your bank account or started taking your paycheck, you need to act fast. Levies can be released, but every day you wait is another day the IRS is taking your money.
Bank Levy: When They Freeze Your Account
A bank levy is one of the most disruptive collection actions the IRS can take. Here's how it works:
The IRS sends a levy notice to your bank
Your bank receives official notice to freeze your funds.
Your bank immediately freezes the funds
You can't access the money in your account.
The bank holds the money for 21 days
This is your window to negotiate a release.
After 21 days, the bank sends the money to the IRS
Once it's sent, getting it back is extremely difficult.
The levy only grabs money in your account at the time it hits. Future deposits aren't automatically taken, but the IRS can (and often does) issue additional levies.
How the Levy Process Works
The IRS can't levy without warning. They're required to follow a specific process:
Notice of Intent to Levy
At least 30 days before levying, the IRS must send you a "Final Notice of Intent to Levy and Notice of Your Right to a Hearing." This is your last chance to resolve the debt before they take action.
Your Right to Appeal
Within 30 days of that notice, you can request a Collection Due Process (CDP) hearing. This temporarily stops the levy while your case is reviewed. If you miss this deadline, you lose important appeal rights.
The Levy is Issued
If you don't respond or can't reach a resolution, the IRS sends the levy to your bank, employer, or other third parties holding your assets.
Getting a Levy Released
Even after a levy has been issued, we can often get it released. Here's how:
Full Payment
Pay the entire balance owed and the levy must be released. Not practical for most people, but it's the simplest solution.
Installment Agreement
If you set up an acceptable payment plan, the IRS will typically release the levy. You're showing good faith by committing to pay over time.
Currently Not Collectible Status
If you can prove genuine financial hardship, the IRS may release the levy and place your account in CNC status.
Offer in Compromise
If you qualify to settle your debt for less than you owe, the IRS often releases levies while considering your offer.
Prove the Levy Creates Hardship
If the levy prevents you from meeting basic living expenses, the IRS may be required to release it.
Challenge the Underlying Tax
If the IRS made a mistake such as wrong amount, wrong person, or statute of limitations expired, we can challenge the levy on those grounds.
What Can the IRS Levy?
Almost everything. Common targets include:
Bank accounts
Checking, savings, and money market accounts
Wages
Your employer must withhold and send money to the IRS
Accounts receivable
Money owed to your business
Social Security benefits
Up to 15% through the Federal Payment Levy Program
Retirement accounts
Can be levied in some circumstances
Vehicles and real estate
Less common, but the IRS can seize and sell property
Some things are protected: unemployment benefits, certain public assistance, workers' compensation, and a small amount of personal property. But the list of exempt items is short.
Common Questions
How quickly can you release a bank levy?
In urgent situations, we can sometimes get a levy released within 24 to 48 hours. The key is acting within that 21-day window before your bank sends the funds to the IRS.
If the levy only takes what's in my account today, am I safe?
No. The IRS can issue multiple levies. Just because they took today's balance doesn't mean they won't levy again next week or next month.
Can the IRS take my whole paycheck?
They can take most of it. The IRS leaves you a small "exempt" amount based on your filing status and dependents, but it's often not enough to cover basic expenses.
What's the difference between a levy and a garnishment?
In IRS terminology, a wage levy and wage garnishment are the same thing. They're both ongoing seizures of your paycheck. "Garnishment" is the term most people use, but the IRS calls it a wage levy.
Can I stop a levy before it happens?
Yes, if you act on the Final Notice of Intent to Levy. That notice gives you 30 days and specific appeal rights. Once you respond and request a hearing, the levy threat is paused while your case is reviewed.
Time is Critical
If the IRS has levied your bank account, you have a small window to act before your money is gone permanently. If they're garnishing your wages, every paycheck that passes is money you'll never see again.
We can often get levies released quickly, but only if you act fast.