Can You Stop the IRS Bank Levy?

If you haven’t responded to the IRS Notices on your tax debt, sooner or later you’ll probably face a levy on your bank accounts. A levy is where the IRS has the right to freeze and take the money from your account to pay the back taxes you owe.

Perhaps the easiest way to stop the IRS levy is to show that the levy would cause you a severe financial hardship. If the levy would causes you to be unable to meet your basic living needs such as food, clothing and shelter and you can support this, you can apply and obtain a release of the bank levy in a matter of several days.

Your bank will freeze your account for a 20 day period before the funds are released which will allow you just enough time to get the levy released if you can.

How Much Can the IRS Levy from Your Bank Account?

That will depend on how much is in your account at the time the bank receives the levy. The bank levy attaches only to the amount in your account at the time your bank processes the levy. Any future deposits you make are not subject to the levy once the levy has been processed. So if you have only $100 in your account at the time of the bank levy, and deposit $10,000 the next day, the IRS only has the right to collect the $100 in your account at the time of the levy.

What Happens to Your Bank Account After the Bank Levy?

An IRS bank levy is not continuous. This means that after a levy is processed you can continue to use your bank account and pay your bills. The IRS would have to send a new bank levy to take more money from the account. Although this is possible, it has generally not been the policy of the IRS to levy the bank account immediately thereafter.

Normally, the IRS will seek other collection alternatives such as wage garnishment where you continue to be non-responsive to your tax debt. In most cases, the bank levy will get your immediate attention and cause you to react fairly quickly. Hopefully, you can because most likely this will not be the end of it.