The 21-Day Window
When the IRS levies your bank account, your bank freezes the funds that are in the account at the moment the levy hits. The bank holds those funds for 21 days, then sends the money to the IRS. That 21-day window is your chance to act.
Important distinction: the levy only grabs what is in the account at the time it hits. It is not an ongoing freeze. Money deposited after the levy date is yours. But the IRS can and will send additional levies. I have seen clients get hit with a new levy every payday.
Is the Levy Legal?
Before we fight the levy, we need to make sure the IRS followed proper procedure. They must have assessed the tax, sent a notice and demand for payment, and provided you with a Final Notice of Intent to Levy at least 30 days before the levy. If they skipped any of these steps, the levy may be procedurally defective and we can get it released on that basis alone.
Getting the Levy Released
The IRS will release a bank levy under several circumstances. Economic hardship is the most common. If the levy prevents you from paying basic living expenses like rent, utilities, food, and medical care, we can demonstrate hardship and get the funds returned.
We can also get a release if you enter into an installment agreement, if the levy was issued in violation of procedures, if the collection period has expired, or if releasing the levy will facilitate collection of the tax. That last one sounds counterintuitive, but it works. If the IRS took your operating capital and you cannot run your business without it, they will not collect anything in the future. Releasing the levy lets you keep earning money and paying down the debt.
Preventing Future Levies
Getting one levy released does not prevent the next one. The long-term solution is to resolve the underlying tax debt. That might mean an installment agreement, an offer in compromise, currently not collectible status, or a combination of approaches. A tax attorney evaluates your entire financial picture and develops a strategy that stops the enforcement actions permanently.