How can you respond to a proposed levy from the IRS?

A proposed levy is serious, but it is not always final. The IRS generally provides a limited window to respond before it seizes assets. Below are the immediate, practical steps to stop collection and protect your money.

Quick action checklist (first 48 hours)

  • Read the notice immediately and note the deadline. The IRS will include a statement titled something like “Notice of Intent to Levy and Notice of Your Right to a Hearing.” (IRS) https://www.irs.gov
  • Do not ignore the letter—missing the deadline usually removes the right to a pre-levy hearing.
  • If funds are at risk (bank account or payroll), act immediately: call the number on the notice and prepare to submit follow-up documents.

Step 1 — Request a Collection Due Process (CDP) hearing (usually within 30 days)

If the notice is a Final Notice of Intent to Levy, you generally have 30 days to file Form 12153 to request a Collection Due Process hearing with the IRS Office of Appeals. A timely CDP request pauses most levy actions and lets you present collection alternatives or dispute the tax. See the IRS page on CDP hearings for details: https://www.irs.gov/appeals/collection-due-process-cdp-hearings (IRS).

In my practice I’ve found filing Form 12153 and attaching a short statement of intent (e.g., request installment agreement or prove incorrect taxpayer) often buys the critical time needed to negotiate.

Step 2 — Propose an alternative that stops the levy

Common options the Appeals officer will consider:

  • Installment agreement (pay over time). Apply online or propose terms; these frequently stop levies if approved. See our guide to applying for an installment agreement: How to Apply for an IRS Installment Agreement Online: A Beginner’s Guide (FinHelp).
  • Offer in Compromise or Partial Payment Agreement if you can’t pay in full. These take longer and may not automatically stop a levy without additional action.
  • Prove financial hardship: if the levy would create an immediate hardship (e.g., you can’t meet living expenses), request a levy release.

The IRS’s payment-options pages explain available choices and qualification requirements: https://www.irs.gov/payments (IRS).

Step 3 — Contact the Taxpayer Advocate Service (TAS) when levy relief is urgent

If the IRS system or staff errors are preventing an appropriate remedy—or you face imminent economic harm—file Form 911 with the Taxpayer Advocate Service or call your local TAS. TAS can intervene and has authority to request temporary relief, which is especially useful in bank-levy or business payroll levy situations. Learn how TAS helps: https://www.taxpayeradvocate.irs.gov (Taxpayer Advocate Service).

Step 4 — If the levy already occurred, request immediate release

If the IRS has seized funds or wages, you can request an immediate release by showing one of the following:

  • The levy was issued in error or targeted the wrong taxpayer.
  • The levy creates an economic hardship (cannot pay necessary living expenses).
  • You have proposed an acceptable alternative (installment agreement or Offer in Compromise).

Document your case with bank statements, pay stubs, bills, and a written hardship statement. The IRS has procedures for emergency releases—raise these with the agent, Appeals, or TAS.

Documents and information to gather now

  • Copy of the IRS notice (scan or photograph)
  • Most recent federal tax returns
  • Recent bank statements (30–90 days)
  • Pay stubs and monthly budget (rent/mortgage, utilities, insurance)
  • Any correspondence with the IRS (dates, names, call records)

Practical communication tips

  • Always record the date, time, and name/ID of the IRS representative. Keep copies of everything.
  • If you can’t resolve the issue quickly, get help from a tax professional (CPA, EA, or tax attorney). In my experience, a credentialed practitioner can often negotiate faster and prevent costly mistakes.

When to consider other collection relief options

  • Installment agreements: usually the simplest immediate fix; for guidance see our installment agreement guide (FinHelp).
  • Offer in Compromise: may be appropriate when you can’t pay all taxes—expect longer processing.
  • Currently Not Collectible: if you can’t pay anything without severe hardship, request Currently Not Collectible status.

For related guidance about levies, liens, and how Fresh Start options affect collection, see: How the Fresh Start Program Affects Liens, Levies, and Installment Agreements (FinHelp).

Common mistakes to avoid

  • Waiting past the deadline to request a hearing—this generally forfeits the right to a pre-levy appeal.
  • Handing over records without a plan—only provide what’s requested and keep copies.
  • Trying to handle a business payroll levy alone—these require immediate, specialized attention.

Final notes and disclaimer

Acting quickly is the single most important factor in stopping a proposed levy. The steps above reflect current IRS processes as of 2025 (IRS; Taxpayer Advocate Service). This article is educational and not a substitute for personalized tax or legal advice. If you face an imminent levy or a bank seizure, contact a tax professional or the Taxpayer Advocate Service immediately.

Internal resources cited:

Authoritative sources:

Professional disclaimer: This content is educational only and does not constitute tax, legal, or financial advice. For help tailored to your situation, consult a qualified tax professional.