Bank Levy Release

The 21-Day Hold Period

When your bank receives a levy notice from the IRS, it freezes the funds that were in your account at that moment — it does not affect funds deposited after the levy date. The bank holds the money for 21 days before remitting it to the IRS. This 21-day window is your opportunity to negotiate a levy release. Unlike wage garnishments, a bank levy is a one-time seizure — the IRS would need to issue a new levy to take additional deposits, though they frequently do so for ongoing debts.

How to Get a Bank Levy Released

The most effective way to release a bank levy is to contact the IRS (or have your tax representative contact them) immediately and arrange an alternative resolution. Setting up an installment agreement, demonstrating financial hardship, or submitting an Offer in Compromise can all lead to a levy release. You can also request a Collection Due Process (CDP) hearing if you did so within 30 days of the original levy notice. If the levy is creating an economic hardship — preventing you from paying for housing, food, medical care, or transportation — the IRS may release it on that basis alone.

Exempt Funds and Wrongful Levies

Certain funds in your bank account may be exempt from levy. Social Security benefits, federal retirement payments, and certain other government benefits are partially or fully protected. If exempt funds were seized, you can request the return of those funds. Additionally, if the IRS made a procedural error — such as failing to send required notices — you may have grounds to challenge the levy as wrongful under IRC Section 6343. Joint account holders who are not responsible for the tax debt may also be able to recover their portion of the funds.

Preventing Future Bank Levies

Once a bank levy has been released, it is essential to resolve the underlying tax debt to prevent future levies. Entering into a formal resolution — whether an installment agreement, CNC status, or OIC — provides protection against additional levy actions as long as you remain in compliance. Keep your contact information current with the IRS so you receive all notices, and respond promptly to any correspondence to avoid escalation to enforced collection.

Who Qualifies?

• You have an active IRS bank levy or have received a Final Notice of Intent to Levy
• You are willing to come into full filing compliance with all required returns
• For hardship release: the levy prevents you from meeting basic living expenses
• For CDP hearing: your request must be filed within 30 days of the levy notice
• For exempt funds: you must demonstrate the frozen funds come from protected sources