How to Remove a Levy From Your Bank Account When the IRS Freezes Your Funds?

solutionsadvocatet
Nov 19, 2025
5 min read

Seeing your bank account frozen is stressful, but you do have options—and a short window to act. An IRS bank levy isn’t permanent. If you respond quickly and present a realistic plan or clear hardship, the IRS can issue a Release of Levy to your bank before the 21-day hold expires.This guide explains how to remove a levy from your bank account fast, the steps the IRS expects, and relief options that can stop collection.

What Is an IRS Bank Levy?

An IRS bank levy is a legal action that tells your bank to freeze the money in your account to cover back taxes. It’s different from a lien (which is just a claim). With a levy, the bank holds the funds for 21 days from the date it receives the notice. If nothing changes, your bank sends the money to the IRS on day 22.

Key facts to know:

The 21-day hold is your chance to get the levy released.
A bank levy is a one-time “snapshot” of the balance that day; the IRS can levy again later if the debt remains.
Wage garnishments are continuous, but bank levies are not.

How to Remove a Levy Fast (Step-by-Step)

Step 1: Identify what triggered the levy and confirm your balance

Pull your recent IRS letters CP504, LT11 or Letter 1058 (Notice of Intent to Levy). Then call the IRS Automated Collection System at 800-829-7650 or 800-829-3903. Have your Social Security number, bank name and notice number ready so the agent can locate the levy quickly.

Step 2: Ask for an immediate hardship release

Describe why freezing those funds would result in economic hardship and you cannot pay rent or utilities and buy food or medicine or childcare. The IRS can release a levy under IRC § 6343 if the levied person cannot satisfy basic needs. Prepare to present proof such as pay stubs, lease, and recent bills. Demand, if necessary, that a manager perform a review.

Step 3: Get compliant—file any missing returns

The IRS has a policy of not granting any relief if there are unfiled returns. In case something is missing, file it immediately or request time to file and provide proof of having filed.

Step 4: Propose a solution they can approve today

Offer a plan the IRS can accept on the spot:

Installment Agreement (payment plan) you can afford
Currently Not Collectible (CNC) if you can’t pay after necessary expenses
Offer in Compromise (OIC) if you qualify to settle for less

Step 5: Send financials promptly if requested

In most cases, the IRS will require Form 433-F (or 433-A/433-B in the case of businesses) to be filled out as documentation of income, expenses, assets, and liabilities. Make sure your numbers match with your bank activity and pay stubs so there are no delays.

Step 6: Request a same-day faxed release to your bank

Once the IRS agent agrees to a payment plan, hardship, CNC or an OIC review; ask the agent to issue Form 668-D (Release of Levy) and fax it to your bank on the same day. Call your bank to confirm if they have received it and when they are going to unfreeze the funds.

Step 7: Escalate if you hit a roadblock

If you’re within 30 days of the Notice of Intent to Levy, file Form 12153 for a Collection Due Process (CDP) hearing—levy action generally must pause during Appeals. Outside that window, use the Collection Appeals Program (CAP) with Form 9423. For urgent hardship, contact the Taxpayer Advocate Service at 877-777-4778.

Example: A single parent had $2,400 frozen—her rent and groceries. She called the IRS the same day, documented essential expenses on Form 433-F, and set a modest direct-debit payment plan. The IRS faxed a levy release to her bank within 24 hours, and the funds were available before rent was due.

Options That Commonly Trigger a Release

Installment Agreement (Payment Plan)

Often the fastest path. For many balances up to $50,000, you may qualify for a streamlined plan without full financial disclosure if you agree to automatic payments. Once approved, request the levy release.

Currently Not Collectible (CNC)

If your income barely covers necessary living costs, the IRS can pause collection. You’ll submit financials; if approved, ask for the levy to be released. Keep filing returns on time while in CNC.

Offer in Compromise (OIC)

If you can’t pay the full debt even over time an OIC can settle for less. Submitting a complete OIC request generally pauses enforced collection while it’s reviewed. OICs require careful documentation; consider professional help.

Innocent Spouse Relief

If the tax comes from your spouse or ex-spouse’s actions (unreported income, incorrect deductions, or a bill you didn’t know about), request relief with Form 8857. There are three paths:

Innocent Spouse Relief for tax you didn’t know—and had no reason to know—was understated.
Separation of Liability to allocate the tax between you and your spouse/ex after separation or divorce.
Equitable Relief when the balance is from unpaid but correctly reported tax, or when fairness supports relief.

Filing can suspend collection against you on the portion under review, and the IRS may release the levy. The IRS notifies the other spouse; if safety is a concern, tell the IRS and consider getting professional guidance.

If the Bank Already Sent the Money

After 21 days, banks must remit the funds. Getting money back is difficult unless the levy was wrongful (e.g., not your debt, a qualifying exempt situation, or an IRS error). If you filed for innocent spouse relief or can show the levy was improper, ask the IRS for a return of funds, but approvals are uncommon. Still proceed with a long-term resolution to prevent repeat levies.

Prevent Future Levies

File all returns on time—even if you can’t pay—and set a plan immediately.
Use direct-debit installment payments and adjust withholding estimated taxes so you don’t fall behind again.
Open every IRS letter; missed deadlines reduce your options and increase enforcement risk.

FAQs

How long does it take to remove a levy from your bank account? If you provide what the IRS needs the same day (financials or a payment plan), the IRS can fax a release to your bank within 24–72 hours. Banks may take an extra day or two to make funds available.

Does an IRS bank levy hit every deposit? No. A bank levy captures what’s in your account when the bank receives the notice. New deposits after that aren’t taken by that levy, but the IRS can issue another levy later.

Will a payment plan stop the levy immediately? Once your Installment Agreement is approved and you’re compliant on filings, the IRS typically releases the levy. Ask the agent to send a same-day faxed release to your bank.

What if I truly can’t afford any payment? Request Currently Not Collectible status. If your necessary living expenses use up your income, the IRS can pause collection and release the levy.

Can innocent spouse relief stop a levy on me? Yes. If you qualify and file Form 8857, the IRS usually suspends collection against you for the liability under review. You can request a levy release while the claim is evaluated.

Should I appeal a levy? If you’re within 30 days of a levy notice (LT11/Letter 1058), a CDP appeal stops levy action during review. Outside that window, you can file a CAP appeal to challenge the levy and propose alternatives.