IRS Tax Levy

An IRS levy is a legal seizure of your property to satisfy a tax debt. Unlike a lien (which is a public claim), a levy actually takes the property — bank accounts, federal payments, vehicles, real estate, retirement accounts. If you've received a Final Notice of Intent to Levy (LT11, CP504, CP90, or CP297), you have 30 days before the IRS can act.

Types of IRS levies

Bank levy

The IRS serves your bank with a levy notice. The bank holds the funds in your account for 21 days, then sends them to the IRS. You have a brief window to negotiate or contest before the funds transfer.

Wage garnishment (continuous wage levy)

Different mechanism than a one-time bank levy: a wage levy is continuous until released. The IRS serves your employer, and a portion of every paycheck goes directly to the IRS. Learn more about stopping a wage garnishment.

Federal payment levy

Through the Federal Payment Levy Program (FPLP), the IRS can take up to 15% of Social Security retirement, disability (SSDI), and federal contractor payments. SSI is exempt.

Property levy

The IRS can seize and sell physical property — vehicles, real estate, business equipment. Property seizures are rare and require additional internal IRS approvals. Primary residences have additional protection.

How to stop an IRS levy

• File a Collection Due Process (CDP) hearing request within 30 days — this is the fastest stop. The levy pauses while the appeal is pending.
• Get into an Installment Agreement — once an IA is in place, levies stop.
• Qualify for Currently Not Collectible — if you're in hardship, CNC stops levies.
• Submit an Offer in Compromise — once the OIC is processable, the IRS generally suspends levies.
• Pay in full — eliminates the levy immediately.

If a levy already happened

You may be able to get the levy released and the funds returned if:

• The levy was issued in error
• Releasing the levy will help you pay the tax
• You're in genuine financial hardship (the IRS calls this an "economic hardship release")
• The statute of limitations expired before the levy was served

Time is critical. Funds frozen in a bank levy can be returned if the levy is released within the 21-day hold period. Funds already transferred to the IRS are much harder to recover.