IRS Bank Levy: What It Is and How to Release It

Waking up to a frozen bank account is a terrifying experience. When the IRS issues a bank levy, your bank must hold the funds in your account for 21 days before sending them to the IRS. This 21-day window is your opportunity to act.

How a Bank Levy Works

1. The IRS sends a levy notice to your bank
2. Your bank freezes the amount in your account (up to what you owe)
3. You have 21 days before the bank sends the money to the IRS
4. The levy only applies to funds in the account at the time of the levy
5. Future deposits are not affected by that specific levy (but the IRS can issue new levies)

Your 21-Day Window

This is critical. During the 21-day hold period, you or your representative can:

• Negotiate a release with the IRS
• Set up an installment agreement
• Demonstrate economic hardship
• File an appeal
• File a Collection Due Process hearing request

How to Get a Bank Levy Released

Prove Economic Hardship

If the levy will prevent you from meeting basic living expenses (rent, food, utilities, medical care), the IRS must release it. Contact the IRS Collection division or the Taxpayer Advocate Service immediately.

Enter an Installment Agreement

Agreeing to a payment plan signals good faith. The IRS will typically release the levy once an agreement is in place.

File an Offer in Compromise

Submitting a processable OIC can halt collection activity, including bank levies.

Request a Collection Due Process Hearing

If you received a Final Notice of Intent to Levy within the past 30 days, you have the right to a CDP hearing. Filing the request stops collection.

Show the Levy Was Procedurally Defective

The IRS must follow specific procedures before issuing a levy. If they skipped steps (like not sending required notices), the levy may be invalid.

Protecting Future Deposits

A single bank levy is a one-time action. But the IRS can and will issue additional levies. To prevent future levies:

• Get into a resolution program (installment agreement, OIC, CNC)
• Stay in filing compliance
• Communicate with the IRS through a representative

Get Emergency Help

A bank levy is a financial emergency. Find a tax relief expert who can contact the IRS on your behalf immediately. Many professionals can get levies released within days.

Request emergency help now.