How does the IRS know which bank to send a levy to?

The IRS obtains bank account information from your previously filed tax returns (including direct deposit and direct debit information), financial disclosures you have submitted, and third-party reports. If the IRS has issued a summons to a financial institution or if you have ever disclosed your bank account on an installment agreement or collection form, the IRS likely has your banking information.

Can the IRS levy a joint bank account?

Yes. The IRS can levy a joint bank account if one account holder owes federal taxes, even if the other account holder has no tax debt. The co-owner can request that their portion of the funds be returned by proving the portion of the account balance that belongs to them — but the burden of proof is on the account holder, not the IRS.

How many times can the IRS levy the same bank account?

Unlike a wage garnishment — which is continuous — a bank levy is a one-time snapshot of the balance in your account on the day the levy is issued. The IRS can issue multiple successive bank levies if the tax debt is not resolved. Each new levy captures whatever balance is in the account at that time.

Will negotiating an installment agreement stop a bank levy?

Yes. Entering into a formal installment agreement with the IRS is one of the most reliable ways to get a bank levy released before the 21-day window expires. The IRS will issue a levy release (Form 668-D) to your bank once the installment agreement is approved and in place. Acting within the first week of the levy significantly improves the chances of recovering your funds.

What is the Section 6343 hardship levy release?

Section 6343 of the Internal Revenue Code allows the IRS to release a levy when it determines that the levy is creating an economic hardship — meaning the levy prevents you from meeting basic and necessary living expenses. To request a hardship release, you must provide financial information demonstrating your income, assets, and essential monthly expenses. This route is faster than a formal installment agreement in genuine hardship situations.

IRS Bank Levy: Act Before the 21-Day Window Closes

What Is an IRS Bank Levy and How Does It Work?

An IRS bank levy is a legal seizure of the funds in your bank account. When the IRS issues a levy to your bank, the bank is legally required to freeze the funds in your account and hold them for 21 days before transferring them to the IRS. This 21-day window is your critical opportunity to act.

Unlike a wage garnishment — which is ongoing — a bank levy is a one-time snapshot. It captures the balance in your account on the day the levy is received. If the IRS later issues a new levy, it captures whatever is in the account at that time.

What Happens During the 21-Day IRS Bank Levy Window?

The 21-day hold exists to give you time to resolve the situation before the money is actually transferred to the IRS. During those 21 days, you can:

Negotiate an installment agreement or other resolution
File an appeal or Collection Due Process (CDP) hearing request
Demonstrate that the levy would create economic hardship
Show that the funds are exempt (e.g., Social Security deposits)
Pay the full amount owed

If you take action within 21 days and the IRS agrees to release the levy, the bank returns the funds to you. Miss the window, and the money is gone.

Which Funds Are Exempt from an IRS Bank Levy?

Not all funds in a bank account are subject to levy. The following are generally exempt:

Social Security benefits (if directly deposited, subject to the 2-month lookback rule)
Supplemental Security Income (SSI)
Certain disability benefits
Child support payments held in the account

If your account contains exempt funds, you can challenge the levy on those specific amounts.

How Do You Get an IRS Bank Levy Released?

The fastest paths to releasing an IRS bank levy are:

Entering into an installment agreement: The IRS will typically agree to release the levy in exchange for a signed payment plan
Submitting an OIC: The levy is placed on hold while a valid offer is pending
Currently Not Collectible status: If you have no ability to pay, the IRS can pause collection activity
Demonstrating economic hardship: Section 6343 of the Internal Revenue Code allows levy releases when the levy is creating significant economic hardship

21 days moves fast. If you received a levy notice today, contact a tax resolution professional immediately. Waiting even a few days reduces your options significantly. Contact I-Taxplan now →

How Do You Prevent Future IRS Bank Levies?

The best way to avoid a bank levy is to address IRS debt before it escalates to enforcement. If you have received a CP90 or CP297 (Final Notice of Intent to Levy), that is the warning shot — respond immediately by entering a resolution agreement or requesting a CDP hearing.

I-Taxplan handles bank levy releases and the underlying debt resolution to prevent future collection action. Get your free case review →

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IRS Bank Levy: What to Do When the IRS Seizes Your Bank Account

What Is an IRS Bank Levy and How Does It Work?

What Happens During the 21-Day IRS Bank Levy Window?

Which Funds Are Exempt from an IRS Bank Levy?

How Do You Get an IRS Bank Levy Released?

How Do You Prevent Future IRS Bank Levies?

Stop the Levy Before It Hits

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