Quick overview

An IRS Notice of Intent to Levy (sometimes titled “Notice of Intent to Levy and Notice of Your Right to a Hearing”) tells a taxpayer the IRS plans to use its legal power to seize assets to satisfy unpaid federal tax debts. The notice triggers important deadlines and rights: most importantly, you normally have 30 days to request a Collection Due Process (CDP) hearing or otherwise contact the IRS to stop the levy. (IRS: Levy and Collection Due Process) (https://www.irs.gov/businesses/small-businesses-self-employed/levy; https://www.irs.gov/appeals/collection-due-process-cdp-hearings).

This article explains what the notice means for bank and retirement accounts, what you must do right away, realistic protections the IRS will consider, and practical next steps.

Why bank accounts and retirement assets are at risk

Under Internal Revenue Code § 6331, the IRS can levy (seize) “any property or rights to property” belonging to a taxpayer to satisfy unpaid federal taxes. That broad authority can extend to:

  • Checking and savings accounts (bank levies)
  • Brokerage accounts
  • IRAs, 401(k) plans, pensions and other retirement accounts (subject to plan rules and timing)
  • Other financial assets or rights to property

In practice, the IRS most commonly starts with bank levies because the funds are immediately accessible. Retirement accounts can also be targeted, though collection may be subject to plan administrative procedures and timing issues. Do not assume retirement accounts are automatically protected; many plans are subject to IRS levies once final collection steps are taken. For the most definitive guidance, consult the IRS levy pages and Collection Due Process information (https://www.irs.gov/businesses/small-businesses-self-employed/levy).

Immediate steps to take (first 30 days)

  1. Read the notice carefully and note the date. The 30-day rights period runs from the date of the notice. Request a hearing within 30 days to stop collection (CDP) per IRS rules: https://www.irs.gov/appeals/collection-due-process-cdp-hearings.

  2. Do not ignore the notice. Ignoring it increases the chance the IRS will levy before you act.

  3. If you received a levy on a bank account, contact the bank immediately to confirm whether funds have been frozen or transferred. Banks must follow IRS levies once validly issued.

  4. Gather documentation: most recent tax notices, pay stubs, bank statements, statements for retirement plans, and proof of hardship (rent/mortgage invoices, utilities, medical expenses).

  5. Consider calling IRS collections or the number on the notice to request a hold while you prepare documentation. Keep records of every phone call: date/time, representative name/ID, and summary.

  6. Seek professional help—CPA, enrolled agent, or tax attorney—especially if large retirement balances, complicated income issues, or potential penalty exposure exist.

Options to stop or prevent a levy

  • Request a Collection Due Process (CDP) hearing within 30 days. A successful CDP hearing can stop levy action while the appeal is pending. (IRS CDP page) (https://www.irs.gov/appeals/collection-due-process-cdp-hearings)

  • Set up an Installment Agreement. If you can pay over time, a formal installment agreement typically prevents new levies. See our guide on setting up an IRS installment agreement for practical tips and application steps: “Setting Up an IRS Installment Agreement” (https://finhelp.io/glossary/setting-up-an-irs-installment-agreement/).

  • File an Offer in Compromise (OIC). If you meet strict eligibility rules and can demonstrate inability to pay the full tax liability, an OIC can settle debt for less than the full amount. Preparing a strong OIC package is complex—see our overview on offers in compromise for details and documentation tips: “What Is an Offer in Compromise? Eligibility, Process, and Alternatives” (https://finhelp.io/glossary/what-is-an-offer-in-compromise-eligibility-process-and-alternatives/). The IRS’s OIC page explains program rules: https://www.irs.gov/businesses/small-businesses-self-employed/offer-in-compromise.

  • Apply for Currently Not Collectible (CNC)/economic hardship status. If you can show that collection would prevent basic living expenses, the IRS may designate your account CNC, pausing levy and collection while the status remains. CNC is not forgiveness; interest and penalties usually continue to accrue.

  • Demonstrate exemption. Some specific property is exempt from levy for the taxpayer’s necessary living expenses; provide documentation to the IRS or the bank to request exemption.

How retirement accounts are treated

Retirement accounts are treated differently depending on plan type and administrators. Examples:

  • Employer plans (401(k), pension): Plan administrators often require a levy to come with clear IRS instructions. Employers or plan custodians may have additional steps before funds are released. However, once an IRS levy is final, qualified plan distributions can be accessed for collection.

  • IRAs and brokerage retirement accounts: These are more directly accessible and can be levied after final notices. Some custodians may hold funds temporarily when a levy is received.

Important: certain limited protections exist for federal benefit payments (e.g., Social Security) and some hardship exemptions; review IRS guidance and seek counsel before assuming a plan is safe. (IRS Levy topic) (https://www.irs.gov/businesses/small-businesses-self-employed/levy)

Practical negotiation tactics I use with clients

From my 15+ years in financial services and tax resolution work, the following tactics are both practical and effective:

  1. Act immediately—prepare a short packet: copies of the levy notice, 90 days of bank statements, recent paystubs, and a short hardship letter.

  2. Request CDP if eligible. This buys time and can lead to a negotiated resolution while enforcement is paused.

  3. Propose an installment agreement sized to the taxpayer’s disposable income. Use Form 433-F or the IRS online tools. If cash flow is tight, request a lower monthly payment and provide documentation to support it.

  4. Consider a partial-payment installment agreement if the taxpayer has some ability to pay but not the full balance.

  5. If appropriate, prepare an Offer in Compromise pre-application and financial package—this is time consuming but can be the right path for long-term insolvency.

  6. If immediate recovery of frozen bank funds is necessary, request a prompt review with the IRS and provide proof of exemptions (child support, essential living expenses). Be prepared to show competing priorities (mortgage, medical).

Documents and forms you might need

  • IRS levy notice (CP90 or similar)
  • Form 433-F (Collection Information Statement) — when requested by IRS
  • Form 9465 (Installment Agreement Request) or IRS online payment agreement
  • Form 656 (Offer in Compromise) and Form 433-A/B for OIC financial statements
  • Bank statements, pay stubs, retirement account statements, proof of bills

Refer to the IRS payments and forms pages for the current versions: https://www.irs.gov/payments

Common mistakes to avoid

  • Waiting until the levy is already enforced. The 30-day period to request a hearing is critical.
  • Handling communications without documentation or missing deadlines.
  • Assuming retirement accounts are fully protected. Many are subject to levy.
  • Using unvetted tax relief companies promising instant “levy removal” for a fee—verify credentials and check state bar or Treasury sanctions.

When to get professional help

Get a CPA, enrolled agent, or tax attorney involved when:

  • A bank levy has frozen household funds
  • Retirement accounts with large balances are threatened
  • Complex tax issues, identity theft, or prior tax fraud concerns exist
  • You’re considering an Offer in Compromise (OIC)

A professional can prepare forms, negotiate with the IRS, and represent you at a Collection Due Process hearing.

For step-by-step help on alternatives to an OIC and when to choose installment agreements, see our pieces on Offers in Compromise and Installment Agreements: “What Is an Offer in Compromise? Eligibility, Process, and Alternatives” (https://finhelp.io/glossary/what-is-an-offer-in-compromise-eligibility-process-and-alternatives/) and “Setting Up an IRS Installment Agreement” (https://finhelp.io/glossary/setting-up-an-irs-installment-agreement/).

Final checklist (fast reference)

  • Date-stamp the notice and calendar the 30-day deadline for a hearing
  • Call the IRS number on the notice and document the call
  • Gather bank/retirement statements and proof of essential expenses
  • Request CDP if you want an appeal and a stay of levy
  • Consider an installment agreement, CNC status, or OIC based on ability to pay
  • Hire a qualified tax professional if large assets or complex issues are involved

Professional disclaimer: This article is educational and does not replace personalized legal or tax advice. For guidance tailored to your specific facts, consult a licensed tax professional, CPA, enrolled agent, or tax attorney.

Authoritative sources: IRS — Levy and CDP pages (https://www.irs.gov/businesses/small-businesses-self-employed/levy; https://www.irs.gov/appeals/collection-due-process-cdp-hearings); IRS Offer in Compromise (https://www.irs.gov/businesses/small-businesses-self-employed/offer-in-compromise); Consumer Financial Protection Bureau general guidance (https://www.consumerfinance.gov/).