You Have 21 Days to Stop an IRS Levy

The IRS cannot seize your money instantly. Legally, your bank is required to hold the funds for 21 days before transferring them. This short delay offers a crucial window of opportunity. If you act promptly, you might be able to have the bank levy lifted and retain your money.

The levy temporarily freezes the funds in your account when the bank receives the IRS notice. It generally acts as a one-time snapshot, unlike a wage levy that continues to deduct over time.

Any deposits made after the levy date usually remain unaffected. Keep in mind, the deadline is day 21.

If you haven’t persuaded the IRS to remove the levy by that time, the bank will have to release the funds. Make sure to note that date clearly, circle it, and set three reminders on your phone.

Start With the Bank

Call your bank’s levy or legal department upon learning of the hold. Confirm the date received, frozen amount, and hold end date. Ask how to send IRS Form 668-D (Release of Levy) by fax, portal, or mail, and get a contact or fax number.

The bank can’t lift the hold independently, but when the IRS releases it, you’ll want that document promptly. If day 21 is a weekend or holiday, confirm when the bank will remit funds to avoid delays.

Call the IRS Now

Next, contact the number on your levy or collection notice (or your assigned Revenue Officer). Start with urgency and a plan:

“I received a bank levy dated [date] for [tax years]. I want to resolve the balance and request a levy release. I can [pay in full / start a payment plan / prove hardship]. What do you need from me today?”

Have your ID information, notice dates, and account freeze date ready. Keep notes on the agent’s name, ID, time, and promises. If you reach voicemail, try calling early or ask for a manager if no help is available.

Choose a Release Path

There are four main routes to getting an IRS levy lifted, and the right choice depends on your financial situation. Each option has a different speed and requirements, but all can stop the IRS from seizing your frozen funds if handled promptly.

Here’s how each one works:

• Pay in Full – This is the quickest and simplest route. If you can pay the entire balance, including penalties and interest, the IRS can confirm receipt and usually fax a levy release to your bank the same day. Once the payment posts, the hold on your account is lifted almost immediately.
• Installment Agreement (IA) – A payment plan is the most common solution. Once your IA is approved, especially a Direct Debit Installment Agreement, the IRS generally releases the levy because you’re now in a formal repayment plan. Be prepared to propose a realistic monthly amount and, if requested, complete a Form 433-F or 433-A detailing your income and expenses. If you qualify for a streamlined plan, approval can happen within days. Always confirm: “Will you fax the levy release to my bank today?”
• Currently Not Collectible (CNC) – This status is for taxpayers facing genuine financial hardship. If the levy prevents you from meeting essential living expenses or paying employees or vendors, the IRS can release the levy and mark your account as uncollectible. You’ll need to show proof of hardship (for example, rent statements, utility bills, or medical expenses), but CNC provides immediate relief when payment isn’t possible.
• Offer in Compromise (OIC) – An OIC allows you to settle your tax debt for less than you owe. While a pending offer suspends new levies, it doesn’t automatically release one that’s already in place. However, if you submit a complete offer package with supporting financials and show hardship, the IRS may release the levy as a good-faith gesture. Because OICs take months to process, many taxpayers combine this with a short-term Installment Agreement or CNC status to get the levy lifted quickly while their offer is under review.

Appeal When You Can

If you’re within 30 days of a Final Notice of Intent to Levy (LT11/1058), a timely Collection Due Process (CDP) request halts levies while the Appeals review your case.

If the levy is issued without proper notice or you’re over 30 days past due, a Collection Appeals Program (CAP) appeal can still trigger a quick managerial review. Appeals slow the process, buying time to find a solution. Continue working with Collections to resolve and secure the release.

Mind the CSED Clock

Most IRS debts expire 10 years from the assessment date, known as the Collection Statute Expiration Date (CSED). If a levy was issued after that date, it is invalid and should be released. If issued before, the IRS can still seize funds even if the 21-day hold period has ended.

Certain actions, like CDP requests and OICs, pause the CSED while they are pending. Don’t let the time limit prevent you from seeking relief; just understand the trade-offs involved as you choose your approach.

Paper Wins

Speed is crucial because documents enable quick action. Gather the levy notice, previous Final Notice, recent bank statements, proof of income, expenses, and your Form 433F/433A (and 433B for businesses).

For hardship claims, include supporting evidence like lease agreements, shut-off notices, medical bills, and payroll obligations.

Please inform the agent that you can fax or upload documents today. Faster file processing moves from “assertion” to “proof,’ speeding release to your bank.

Work the Bank Side, Again

After the IRS issues a levy release, immediately call your bank’s levy department to confirm they’ve received Form 668-D and that the hold will clear before funds are sent. If you’re on day 20 or 21 of the hold, stress the urgency; timing matters. Keep copies of the release notice, call notes, and any bank fees related to the levy.

A released levy ends the emergency, not the problem. Stay current on payments if you’re in an Installment Agreement, keep filings up to date if you’re in CNC, and consider requesting Penalty Abatement once things stabilize. Respond to every IRS notice quickly; your next window for appeal could prevent this from happening again.

The 21-day hold is your action window, not a timeout. Call your bank, call the IRS, and get a professional on your side!

Contact Todd S. Unger, Esq. LLC for fast help releasing your levy and resolving your tax issue before your funds are gone.