Practical Steps to Stop an IRS Levy on Bank Accounts

Immediate question: what to do in the first 24–72 hours

If you just learned there’s a potential or active levy on a bank account, act immediately. Time matters: banks commonly hold funds for about 21 days from the date they receive a levy before remitting to the IRS, and that window is your opportunity to stop the seizure or recover exempt funds. In practice, a quick, organized response improves the chance of stopping the levy with minimal disruption.

• Verify the notice type and date. The IRS usually sends a “Final Notice — Notice of Intent to Levy and Notice of Your Right to a Hearing” (commonly CP90 or LT11) before issuing a bank levy. That notice contains the critical 30-day window for requesting a Collection Due Process hearing. (IRS — Levy and Collection Due Process.)
• Contact the bank. Ask whether the bank received a levy and whether any funds are being held; request a ledger or amount on hold. Banks sometimes hold exempt federal benefits (Social Security, VA) incorrectly — you’ll need to identify exempt deposits and act fast.
• Call the IRS Collections number on the notice or the number on irs.gov to confirm the account and amounts. Record names, badge numbers, dates, and call times.

Source: IRS “Levy” guidance and Collection Due Process pages (irs.gov).

Step-by-step actions to stop or limit a bank levy

1. Request a Collection Due Process (CDP) hearing (if within 30 days)

• If you received a Final Notice (CP90/LT11), you have 30 days to request a CDP hearing with the IRS Office of Appeals. Requesting CDP stops most enforced collection actions (including levies) while Appeals considers the case. This is one of the fastest, strongest tools to stop a levy immediately if you’re still inside the 30-day window. (See IRS guidance on Collection Due Process.)

1. Negotiate an Installment Agreement or a Direct Debit Installment Agreement

• The IRS frequently releases levies once an approved installment agreement is in place and the first payment is scheduled or received. Ask the IRS collections officer whether a monthly payment plan will secure a levy release and what documentation they need.
• If you can’t afford full payments, ask about a Partial Payment Installment Agreement (PPIA). Documentation of income/expenses will be required. See our guide on How to Set Up an IRS Payment Plan for step-by-step help.

1. File an Offer in Compromise (OIC) when eligible

• An OIC can stop a levy if the IRS accepts an offer to settle for less than the full tax owed. OICs require a detailed financial package and typically take longer to process, but the IRS will generally stop active levies once a properly submitted offer is under consideration or if the taxpayer pays the required initial payment per OIC rules.
• Read our writer’s guide on preparing a financial package: Preparing a Strong Financial Package for an Offer in Compromise.

1. Claim funds as exempt and request release for protected benefits

• Certain federal payments (Social Security, veterans’ benefits, some federal retirement payments) are exempt from levy. If your account contains exempt benefits, provide the bank and the IRS documentation (proof of the benefit type and deposit source) and request an immediate release of those funds.
• If the bank has already turned funds over, the IRS has a process to return exempt federal benefits — start that process immediately and contact the Taxpayer Advocate Service if you experience delays.

1. Request Currently Not Collectible (CNC) status for hardship

• If paying creates a significant financial hardship, request CNC status. The IRS may release levies while they review your financial situation, but CNC is generally temporary and requires updated financial information.

1. Appeal or request a Collection Appeals Program (CAP) review

• If the levy was issued in error or you disagree with the proposed collection action, request a Collection Appeals Program review or further Appeals consideration. Appeals officers can order levy releases where appropriate.
• Our guide How to Request a Collection Appeal to Stop an IRS Levy walks through forms and timelines.

1. Use a Power of Attorney (Form 2848) and work with a qualified tax professional

• A tax pro or attorney with a signed Form 2848 can negotiate directly with IRS collections, request levy releases faster, and prepare accurate financial disclosures. In my practice, having a POA file and someone authorized to speak speeds up resolution and reduces taxpayer stress.

How banks handle levies — what to expect

• Typical hold period: Many banks freeze the account for about 21 days from receipt of the levy before sending funds to the IRS. This 21-day hold gives taxpayers a chance to act. The exact timeframe and mechanics vary by bank.
• Which accounts are affected: The IRS can levy checking and savings accounts and can seize most of the balance. Joint accounts may be partially protected depending on ownership breakdown and state law.
• Exempt funds: Social Security and many federal benefits deposited directly can be exempt if properly identified. Keep benefit award letters, deposit records, and bank statements ready to prove exempt status.

Recovering money that’s already been seized

If funds have already been removed from your bank account:

• Confirm the amount and date of remittance with the bank and the IRS.
• If the funds were exempt (e.g., Social Security), request a refund or return via IRS collections procedures. That process can take time; escalate to the Taxpayer Advocate Service if you face undue delay or acute hardship. (Taxpayer Advocate Service — TAS.)
• Consider submitting Form 911 (Taxpayer Advocate Service) only after you’ve tried regular IRS channels and if financial hardship persists.

Documentation checklist — what to gather right away

• The IRS notice (CP90, LT11, CP504, or any collection letter)
• Bank statements showing deposits and balances for the last 3–6 months
• Proof of exempt federal benefits (award letters, deposit slips)
• Recent pay stubs, proof of unemployment, or other income documentation
• Monthly bills and a basic budget showing expenses and dependents
• Copies of any previously signed Forms 2848 (POA) or communications with the IRS

Common mistakes that make levies harder to stop

• Ignoring notices. Silence allows the levy to proceed. Always respond — even to say you need more time.
• Assuming partial payment halts a levy without an agreement. The IRS must agree to release the levy by setting up a plan.
• Using the bank to move exempt funds without documentation. If the bank can’t verify exempt deposits, funds may be turned over.

When to call the Taxpayer Advocate Service

Call the Taxpayer Advocate Service (TAS) when you have tried normal IRS channels and:

• The levy causes or will cause immediate financial harm (e.g., you can’t pay rent or buy food), or
• The IRS is not following published procedures, or there is an unreasonable delay.
  TAS can intervene and request temporary levy relief in urgent cases.

Sample script for your first call to IRS collections

“Hello, my name is [Name], I received Notice [code and date]. My SSN is [XXX-XX-XXXX]. I need to confirm whether a bank levy has been issued on account ending in [last four digits]. I would like to request [an installment agreement/CDP hearing/levy release for exempt funds]. How can we document an installed payment plan or submit documentation today?” Record the agent’s name and steps they request.

Practical timeline you can expect

• 0–3 days: Verify bank hold and notice. Contact bank and IRS.
• 3–21 days: Negotiate installment agreement, submit CDP if eligible, or provide documentation for exempt funds.
• 2–8 weeks: IRS processes installment agreements and some appeals; OICs and CAP reviews may take months.

When professional help matters

In my 15+ years advising clients, the difference between a rushed DIY call and a coordinated POA-led negotiation is material: professionals know the right documentation, can request timely appeals, and reduce accidental errors that delay levy releases. Consider a qualified tax attorney, enrolled agent, or CPA who handles IRS collections frequently.

Important legal and practical notes

• This article is educational, not legal advice. The right path depends on your specific tax history, state law, and timing. Consult a qualified tax professional for decisions affecting your case.
• IRS procedures and notice codes can change; always confirm current rules at irs.gov and through the Taxpayer Advocate Service.

Quick list of authoritative resources

• IRS — Levy and collection procedures: https://www.irs.gov/businesses/small-businesses-self-employed/levy
• IRS — Offer in Compromise: https://www.irs.gov/businesses/small-businesses-self-employed/offer-in-compromise
• IRS — Collection Due Process (Appeals): https://www.irs.gov/appeals/collection-due-process-cdp
• Taxpayer Advocate Service: https://taxpayeradvocate.irs.gov/

Interlinked FinHelp articles

• How to Request a Collection Appeal to Stop an IRS Levy: https://finhelp.io/glossary/how-to-request-a-collection-appeal-to-stop-an-irs-levy/
• Preparing a Strong Financial Package for an Offer in Compromise: https://finhelp.io/glossary/preparing-a-strong-financial-package-for-an-offer-in-compromise/
• How to Set Up an IRS Payment Plan: https://finhelp.io/glossary/how-to-set-up-an-irs-payment-plan/

Professional disclaimer: This content is for educational purposes only and does not replace personalized tax, legal, or financial advice. For case-specific guidance, consult a licensed tax professional or attorney. FinHelp.io provides general information but is not your representative before the IRS unless you have engaged a practitioner with a signed power of attorney.