How Can I Stop an IRS Bank Levy?

Short answer

When the IRS levies a bank account, the bank must freeze the funds and hold them for 21 days before sending them to the IRS. During that window, the levy can often be released if you set up a payment plan, show the levy causes economic hardship, pay the balance, or prove the levy was issued in error. The best protection is acting before the levy, by responding to the Final Notice of Intent to Levy within 30 days.

Before the levy: the 30-day window

Before most levies, the IRS must send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. You then have 30 days to request a Collection Due Process (CDP) hearing using Form 12153. A timely request generally stops the levy while the hearing is pending and lets you propose a payment plan, Offer in Compromise or other resolution with the IRS Independent Office of Appeals.

After the levy: the 21-day hold

• The levy takes only the money in the account on the day the bank receives it. Later deposits are not covered unless the IRS issues a new levy.
• The bank holds the frozen funds for 21 days, then sends them to the IRS.
• This is the window to request a release.

When the IRS must release a levy

The IRS is required to release a levy when, for example:

• The balance is paid, or the collection period has expired.
• You enter into an installment agreement, unless its terms say otherwise.
• The levy creates an economic hardship, meaning you cannot meet basic living expenses (see Currently Not Collectible status).
• Releasing it would help you pay the tax.
• The levy was issued in error, such as before required notices were sent.

For businesses, economic hardship release does not apply in the same way, so a payment arrangement is usually the main route.

What we do when a levy hits

1. 1

   Contact the IRS (or the assigned Revenue Officer) immediately under Form 2848.

2. 2

   Confirm the balance and whether required notices were properly sent.

3. 3

   Prepare a financial statement showing hardship or ability to pay.

4. 4

   Request release in exchange for an installment agreement or other resolution.

5. 5

   Get current on any unfiled returns that are blocking an agreement.

Talk to a CPA or Enrolled Agent

Every situation is different. We review your IRS transcripts and explain your options in plain terms.

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This page provides general information, not tax or legal advice for your specific situation. IRS rules, fees and thresholds can change. Past results do not guarantee a similar outcome, and every case depends on its own facts. Franskoviak Tax Solutions, operated by Titan Tax Solutions, P.C., provides representation where permitted.