Bank Levy

What is an IRS Bank Account Levy?

An IRS bank account levy is a legal action of the IRS to levy your bank account in return for the taxes you owe. The IRS will send you several notices, asking you to pay the tax due, but if it gets fed up with your indifference, it’s more likely it will proceed with a bank levy and freeze your account within 21 days.

When will the IRS Issue a Bank Account Levy

If you keep on ignoring the notices and are hesitant to pay your tax debts, the IRS will continue the bank account levy. Each notice will ask you to pay the amount owed and it gets harsher. The Final Notice of Intent to Levy is the final warning that the IRS will levy your bank account, wages, or anything that has a value that can be used to pay off your tax due. After the 30th day after the Final Notice of Intent to Levy has been issued, the IRS can start its harsh act of freezing your bank account.

Within the 30 days allowed for you to take action, you must pay the taxes owed in full or settle an arrangement with the IRS.

Under the law, there are three conditions before the IRS can levy a taxpayer’s assets:

  •        The IRS has already assessed the tax liability and sent several notices to ask for payment on the tax due
  •        The taxpayer didn’t pay the tax due and keep on refusing the payment
  •        The IRS sent a “Final Notice of Intent to Levy” after 30 days before the levy

The IRS will send all those notices to your last known address. These mails can be given to you in person or at your home and office. The Final Notice of the Intent to Levy must be taken seriously since the IRS will push the levy within 30 days. During this period, the IRS also expects that you will pay your taxes in full or enter into a payment agreement that’s both win-win scenarios.

How an IRS Bank Account Levy Works?

When the 30-day grace period lapsed and you still haven’t made a payment arrangement, the IRS will decide on which type of levy to enforce. In a bank account levy, the IRS will track your bank accounts and it is very easy for them to do that since you were required to provide your social security number in opening the account.

The IRS will request the bank to provide information about your account, and when it finds out that there’s a money in your account, then it will have your funds frozen immediately. Once the account is frozen, you won’t be able to use it and withdraw money from your account. The IRS will seize the funds after 21 days, making your bank totally liable for sending over the amount to the IRS.  

You must act quickly as much as possible to prevent the IRS from seizing your bank account. Your bank cannot save you either. The amount that’s been seized from your account is used to compensate for your tax liability.

The IRS bank account levy is considered the harshest collection activity of the IRS. You don’t have any control over your own money because the IRS froze your account. The IRS won’t feel guilty about taking over other people’s bank account since it is their job, so you should act quickly and don’t let the actual levy take action.

However, the IRS doesn’t want you to end up with a levy that’s why you need to come to the IRS and come up with an agreement, so you can pay your tax debts without letting your properties seized. Remember that the levy is a final resort of the IRS to the taxpayer who’s been unresponsive from the notices and warnings.

It’s best to negotiate with the IRS on a tax resolution, so you won’t end up with a levy. You may hire a tax resolution expert or simply a tax professional to solve this problem.

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Bank Levy Infographics

How to Stop an IRS Bank Account Levy?

The IRS will give you up to 30 days before it proceed with the bank account levy process. Within the time frame, you are expected to settle your back taxes either by paying in full or setting a payment plan or arrangement with the IRS

If there’s no action done to pay your tax due or to set up a plan, the IRS will then start levying your assets.

The IRS has the legal right and responsibility to levy almost anything you own– with a few exceptions. One of the most preferred methods is an IRS bank account levy. The bank account levy without notice is possible and this can be irritating since you won’t receive a notice that your bank account is going to be levied.

The bank account levy can happen after the 30-day period lapsed and after you received the Final Notice of Intent to Levy. The IRS will ask your bank to freeze your account for at least 21 days before they can seize the funds from your bank account.

How to Stop IRS Bank Account Levy


To stop an IRS bank account levy, you need to act immediately within 30 days after the “Final Notice of Intent to Levy” was sent or  21 days after the IRS has frozen your account.

Time is not always on your favor since the IRS is serious in levying your money from your account. Any amount taken by the IRS cannot be returned back to you since this will be compensated for your tax debts.

You must act quickly and settle your tax obligations if you don’t want to have your  bank account money blown away.

Ways to Release or Stop IRS Bank Account Levy


Pay the IRS the entire amount of your back taxes, including interest and penalties. The bank levy will be removed once the entire debt or tax due has been paid off. You may consider borrowing from your family or friends, get an advance pay from your employer, sell another asset to set aside money for the payment of your tax debts.

Enter into an Installment Agreement. This is when the IRS allows you to have staggered payments or in increments on a monthly basis. However, the IRS will accept your installment if you can offer a reasonable amount. Once your Installment Agreement is accepted, the bank account levy will be released and the funds will not be seized. You should be responsible on your tax obligations and never miss out any payment for you to keep a good standing. The IRS can reissue the levy if you remain delinquent.

File for an Offer in Compromise that allows you to pay for back taxes at the amount you can handle. Unfortunately, only a few people get accepted in this payment method and those deemed by the IRS deserving for this tax relief option. You cannot trick the IRS with an OIC just to stall the payments. You will just get into trouble if you do. If the IRS officer believes that you qualify based on the requirements, he or she may release the levy until your tax filing has been fully reviewed.

Prove financial hardship that may stop IRS levy. The IRS, despite being harsh in its collection activities, wants you to have just enough money to pay for your need before it takes away your money. Being said, this is one of the most common methods to stop a bank account levy. However, this won’t solve your tax problems. It will only delays the IRS action and extends you time to settle your tax debts. You need to prove the IRS at your best that you and your family will be struggling financially or that your overall health and well-being will be compromised if the levy continues.

Whatever method you choose, it is important that you act immediately. There is always harm in wasting time when dealing with the IRS.

It is always a sound advice to hire a tax professional who can help you go out of this IRS bank account levy problem.


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how to stop irs bank levy