How a bank levy works
- The IRS sends a levy to your bank.
- The bank freezes the funds in your account, up to the amount owed.
- The bank holds the funds for 21 days, then sends them to the IRS.
Before a levy, the IRS must
- Assess the tax and send you a notice and demand for payment.
- Find that you neglected or refused to pay.
- Send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy.
- Give advance notice that it may contact third parties about your taxes.
Ways a levy can be released
- It’s causing an immediate economic hardship, meaning you can’t meet basic, reasonable living expenses.
- It was issued in error.
- You pay the balance, or set up an agreement that resolves it.
What to do in the 21 days
- Contact the IRS right away, at the number on the levy notice, or have a representative do it.
- Gather proof of hardship if that applies: rent or mortgage, utilities, medical costs, and your income.
- Find out if you have unfiled years. The IRS generally wants them filed before it agrees to a payment plan.
If this is happening now, get urgent help.