Can the IRS take all the money in my bank account?

Yes, an IRS bank levy can seize the entire balance in your bank account up to the amount of your tax debt. Unlike wage garnishments, which leave an exempt amount for living expenses, a bank levy takes everything in the account on the date the levy is received (up to the debt amount). There is no automatic exemption for bank funds. However, there are some protections: Social Security and certain federal benefit direct deposits have limited protection under the Federal Payment Levy Program rules, joint accounts where only one account holder owes taxes may be partially protected depending on the circumstances, and you can argue that seized funds are needed for basic living expenses. The critical protection is the 21-day holding period. After your bank receives the levy, they must hold the funds for 21 days before sending them to the IRS. During these 21 days, you can negotiate with the IRS for a levy release. After 21 days, the money is sent and very difficult to recover. If your account is levied, contact a tax professional immediately to take advantage of the 21-day window.