Release Bank levy & wage garnishment
An IRS levy is a legal action that allows the IRS to seize your property or assets in order to satisfy a tax debt. As part of its collection process, the IRS may levy wages (wage garnishment), bank accounts (bank levy), vehicles, real estate, and other personal property in which you have an ownership interest.
It’s important to distinguish a levy from a lien. A lien is a legal claim against your property that secures the government’s interest in your tax debt. In contrast, a levy is the actual enforcement mechanism through which the IRS takes your property to collect the debt.
Below, we explain how wage garnishments and bank levies work in practice.
What is a wage garnishment
Wage garnishment is often one of the most stressful and financially disruptive collection methods the IRS uses to recover unpaid tax debt.
When the IRS garnishes your wages, the non-exempt portion of your paycheck is withheld and sent directly to the IRS each pay period. This continues until the debt is fully paid, a payment arrangement is made, or the levy is otherwise released. If you have multiple sources of income, the IRS may apply your exemptions to one source and levy 100% of the wages from another, potentially seizing your entire paycheck from a particular employer.
For self-employed individuals, the IRS can issue a levy to clients or customers who pay for your services. Those payors are then legally obligated to forward payments to the IRS instead of paying you directly.
Most people cannot afford to live on half—or less—of their paycheck. That’s why it’s critical not to ignore IRS notices. Once you receive a Final Notice of Intent to Levy, you have 30 days to either pay the balance in full or establish a resolution with the IRS before wage garnishment begins.
How does a wage garnishment work?
The IRS has broad authority and unparalleled power to collect unpaid tax liabilities directly from your wages. This process typically begins with the IRS sending you a Final Notice of Intent to Levy. If no action is taken, the IRS may then issue a Notice of Levy on Wages to your employer, requiring them to withhold a portion of your earnings and send it directly to the IRS.
What Is a Bank Levy?
A bank levy is a legal action that allows the IRS to seize funds directly from your bank account. By issuing a levy to your financial institution, the IRS can freeze and claim funds in your account up to the amount you owe. Once the levy is received, your bank will freeze the funds for 21 days—this is known as the waiting period. If no resolution is reached during this time, the bank must send the frozen funds to the IRS to satisfy your tax debt.
The 21-day waiting period gives you a limited window to act. During this time, you must contact the IRS to arrange payment, dispute the levy, or demonstrate that the levy is causing immediate economic hardship in order to request a full or partial release.
It’s important to understand that the levy is effective as of the date and time it is served on the bank. Only the funds available in your account at that moment are frozen; deposits made after that time are typically not subject to the levy.
Release of Wage Garnishment
You must act quickly. If you’ve received a Final Notice of Intent to Levy, the IRS has already issued a Notice of Levy on Wages to your employer or clients, or if you are currently subject to a wage or income levy, it’s critical to seek immediate help. We are here to assist you with urgent tax matters—be sure to mention the time sensitivity of your situation when you contact us.
Release of Bank Levy
If your bank account has been levied, you have only 21 days to take action before the frozen funds are sent to the IRS. Contact the IRS—or a qualified representative—immediately. We can help you request a release of the bank levy and advocate on your behalf.
Seizure of Assets
The IRS has the authority to seize your assets—including your home, vehicles, boats, and even your business—to satisfy unpaid tax liabilities. If you’ve received a notice regarding asset seizure, it’s critical to act immediately. Contact the IRS or a qualified tax professional. We can help you respond to the notice, resolve your tax issue, and advocate on your behalf.