How does an IRS bank levy work and how do I stop it?

When the IRS issues a bank levy, your bank receives a legal demand to freeze your account balance as of the date the levy is received. The bank must hold the frozen funds for 21 days before sending them to the IRS. During this 21-day window, you can take action to get the levy released. To stop a bank levy: (1) Contact the IRS immediately (or have your tax professional call) to negotiate a levy release by proposing an installment agreement or demonstrating hardship. (2) Prove economic hardship showing the levy prevents you from meeting basic living expenses. (3) Request a Collection Due Process hearing if you're still within the 30-day window from the Final Notice. (4) Show the levy is creating an economic hardship that affects your ability to pay current taxes. (5) Demonstrate that releasing the levy will facilitate tax collection (for example, you need the funds to operate your business and generate income to pay the tax). The IRS can also issue continuing levies on bank accounts, meaning they hit the account again and again. Unlike a single bank levy that only captures the balance on one day, a continuing levy is ongoing. Most bank levies can be released within a few days if you engage a tax professional who can negotiate with the IRS directly.