How to Dispute an IRS Levy or Garnishment

Immediate steps to take when you receive a levy or garnishment notice

1. Read the notice carefully and note dates. The IRS generally sends a “Notice of Intent to Levy” together with a “Notice of Your Right to a Hearing.” You usually have 30 days to request a Collection Due Process (CDP) hearing. (IRS: How to appeal an IRS levy: https://www.irs.gov/individuals/how-to-appeal-an-irs-levy)
2. Don’t ignore it. Ignoring notices narrows your options and can escalate enforcement.
3. Contact the IRS collections unit listed on the notice to confirm the account balance and what triggered the action. Keep careful records of names, badge numbers, and call times.
4. Gather documents immediately (see next section).

Documents and evidence you’ll need

• Most recent pay stubs and employer contact information (for wage garnishments).
• Recent bank statements and evidence of levied account transactions.
• A current monthly budget showing necessary living expenses (rent, utilities, child care, medical costs).
• Proof of essential deductions (medical bills, secured loan payments, court-ordered obligations).
• Previous tax returns and any correspondence with the IRS.
• Completed financial forms: Form 433-A (individual) or 433-F to support currently not collectible (CNC) or installment agreement proposals.

In my practice I’ve seen the cases that get fastest traction are those with clear, contemporaneous documentation of hardship — not vague claims.

Legal and administrative options to dispute the action

1. Request a Collection Due Process (CDP) hearing.

• File IRS Form 12153 within the 30-day window shown on the Notice of Intent to Levy. CDP hearings are your strongest immediate procedural protection because they temporarily halt levies while the appeal is pending. (IRS Form 12153: https://www.irs.gov/forms-pubs/about-form-12153)
• You can request issues such as: wrongful identity, wrong amount assessed, or propose alternatives (installment agreement, Offer in Compromise, CNC status).
• For practical guidance on when to request a CDP hearing, see our article on when to request a collection due process hearing. When to Request a Collection Due Process Hearing with the IRS

1. Ask for immediate release of a levy for financial hardship.

• If the levy prevents you from meeting necessary living expenses, request release by showing charts of income vs. essential expenses and bank records. The IRS may classify the account as Currently Not Collectible (CNC) if you can’t pay basic living costs.

1. Negotiate an installment agreement.

• Offer a realistic monthly payment and submit Form 433-F or the online Account Transcript information. Entering an installment agreement can stop additional enforcement if the IRS accepts it and your payments remain current.

1. Consider an Offer in Compromise (OIC).

• If you cannot pay the full amount, an OIC may allow settling for less than the full liability. OICs require detailed financial disclosures (Form 656 and supporting statements) and are approved based on reasonable collection potential. For practical examples and when an OIC makes sense, see our guide: When an Offer in Compromise Makes Sense: Practical Examples

1. File a Collection Appeal Request (if outside CDP) or seek an Appeals hearing.

• If you miss the CDP deadline but still want to contest the levy, you can file a Collection Appeal Request (CAR) or pursue collection due process through the IRS Office of Appeals; procedures differ and may not automatically stay enforcement.

What to expect from the IRS timeline

• CDP requests typically take several weeks to a few months. The levy is generally on hold while a timely CDP request is pending.
• Installment agreements or CNC determinations can be processed faster, but acceptance depends on documentation and collections workload.
• An Offer in Compromise usually takes months and requires precise financial disclosure and, often, professional representation.

How to write an effective dispute or hardship request

• Be specific: list the notice numbers, dates, and the exact relief you want (release, reduced levy, CNC, installment plan).
• Attach clear documentation (pay stubs, bank records, leases, medical bills).
• Provide a simple, calculated budget showing monthly income and essential expenses; highlight any non-discretionary expenses that prevent payment.
• Use plain language and avoid emotional appeals without factual support.

Sample opening line for a hardship release request:

“Re: Notice Number [insert]. I am requesting immediate release of the levy on my account because it prevents me from meeting necessary living expenses. Attached: 8 weeks of bank statements, last 3 pay stubs, and a monthly household budget showing net shortfall of $X.”

Common missteps that weaken disputes

• Missing the 30-day CDP deadline. That procedural miss often removes the automatic stay.
• Failing to provide contemporaneous proof of expenses.
• Continuing to ignore IRS follow-up requests for documentation.
• Attempting to hide assets — the IRS has broad discovery powers and concealment risks criminal exposure.

Employer and third-party issues: what to tell your employer or bank

• Employers and banks are legally required to comply with a valid levy. Informing your employer that you’ve filed Form 12153 and requested a CDP hearing can sometimes prompt them to pause further actions while the appeal is processed, but they are not required to release already-levied funds without IRS approval.
• If you believe the levy was improperly served to your employer, document dates and ask your tax professional to contact the IRS collections office.

When to hire a tax pro or attorney

Hire a qualified tax professional if:

• The levy involves large balances or business assets.
• You need to prepare an Offer in Compromise or complex financial statements.
• The IRS alleges fraud or civil penalties, or criminal exposure is a concern.

In my practice, a timely professional filing (Form 12153, accurate Form 433 series, or complete OIC package) often changes the trajectory of collection actions. Professionals know typical IRS response times, correct documentation formatting, and can negotiate directly on your behalf.

Interaction with other remedies and protections

• Innocent spouse relief: If a joint account was levied because of a spouse’s tax debt, investigate innocent spouse relief — this may protect the other spouse’s funds and can be raised in appeals.
• Refund offsets: The IRS can also offset federal refunds to satisfy tax debts; offset procedures differ from levies but are another enforcement tool.

Reliable IRS and government sources

• IRS — How to Appeal an IRS Levy: https://www.irs.gov/individuals/how-to-appeal-an-irs-levy
• IRS — Understanding Levies and Garnishments: https://www.irs.gov/businesses/small-businesses-self-employed/understanding-levies-and-garnishments
• IRS — About Form 12153: https://www.irs.gov/forms-pubs/about-form-12153

Quick-check action list (48 hours)

• Read notice and calendar the 30-day deadline.
• Call the collections number, note agent details, and request account payoff amount.
• Gather 4 weeks of pay stubs, 3 months of bank statements, and a current budget.
• If eligible, prepare and file Form 12153 immediately.

Final notes and disclaimer

This guide is educational and reflects best practices as of 2025. It is not legal advice. If you face seizure of business accounts, complex multi-entity issues, or potential criminal exposure, consult a qualified tax attorney or enrolled agent immediately.

For more detail on filing a CDP hearing and your rights during collections, see our resources on CDP hearings and Offer in Compromise options linked above. Additional practical checklists and sample letters are available across the FinHelp glossary.

(Author: seasoned financial consultant with 15+ years assisting taxpayers through IRS collection actions.)