Tax Levy Attorney

What an IRS levy reaches, and the notice that has to come first

Under section 6331 the IRS can levy any property or right to property you own once it has sent a notice and demand, waited ten days, and given you 30 days’ notice of your right to a hearing. The reach is wide: wages, salary and commissions, bank accounts, accounts receivable, rents, retirement accounts, state tax refunds, and 15 percent of Social Security through the Federal Payment Levy Program. Section 6334 exempts a short list, including unemployment and workers’ compensation benefits, a minimum amount of wages, and a principal residence without a judge’s approval. The order of the letters is fixed. CP504 is the Notice of Intent to Levy under section 6331(d), and it authorizes a levy on a state refund only. The LT11 or Letter 1058, the Final Notice of Intent to Levy and Notice of Your Right to a Hearing, is the section 6330 notice and the last letter before a levy on everything else. In a jeopardy case the IRS can skip the wait, but that is rare and it has to say so.

The 30-day Collection Due Process window

Form 12153 filed within 30 days of the LT11 or Letter 1058 stops the levy while the IRS Independent Office of Appeals reviews the case, and it preserves your right to go to Tax Court. Section 6330(e) suspends levy action while the hearing is pending, and the collection statute is suspended with it. At the hearing you can propose an installment agreement, an offer in compromise or currently not collectible status, challenge whether the IRS followed its own procedure, and contest the underlying tax if you did not have a chance to before. Appeals issues a Notice of Determination, and you have 30 days to petition the Tax Court. If the 30 days have passed, an equivalent hearing is available within one year without court review, and a Collection Appeals Program request on Form 9423 gets a quick look at a levy that has already hit. The notice sequence in full is in our complete guide to IRS collections.

Wage levies and bank levies work differently

A wage levy is continuous and a bank levy is a single event, and that difference decides how much time you have. Form 668-W goes to your employer, and under section 6331(e) it attaches to every paycheck until it is released. Publication 1494 sets the amount you keep, which tracks the standard deduction plus an amount per dependent: a single person paid every two weeks with no dependents keeps $619.23 a check in 2026, and the IRS takes the rest. Form 668-A goes to your bank, attaches only to the money on deposit at the moment it arrives, and under section 6332(c) the bank holds those funds for 21 days before sending them to the IRS. Later deposits are not touched. The paycheck side is on our wage garnishment attorney page and the 21-day side is on our bank levy attorney page.

How an IRS levy gets released

Section 6343 requires the IRS to release a levy in six situations, and economic hardship is the one that works fastest. The list: the balance is paid; the statute under section 6502 expired before the levy issued; releasing the levy will help the IRS collect; you enter an installment agreement whose terms do not allow the levy to continue; the levy causes economic hardship, which Treasury Regulation section 301.6343-1 defines as leaving you unable to meet basic, reasonable living expenses; or the property is worth more than the debt and a partial release will not hurt collection. A wage levy that causes hardship has to be released, and a bank levy that does may be. The release itself is Form 668-D, faxed to the employer or the bank, and that fax is the whole game.

Day one, Form 2848 goes in, we pull the transcripts, and we call the Automated Collection System or the revenue officer with a proposal already in hand. If the LT11 is less than 30 days old we file Form 12153 the same day. For a hardship release we send the financial statement and the bills behind it; for an installment agreement we propose the payment and ask for the 668-D on the spot. Money that already went to the IRS can come back under section 6343(d) when the levy was premature, an agreement was in place, or the return helps collection, and a third party whose funds were taken has two years under section 6343(b) to make a wrongful levy claim.

California levies: FTB, EDD and CDTFA

California’s three agencies levy with less warning than the IRS and with no hearing that freezes collection, so the work is the financial showing itself. The FTB’s Order to Withhold (FTB 2900) goes to a bank under Revenue and Taxation Code section 18670, takes every dollar in the account up to the balance, and the bank sends it after ten business days. Its Earnings Withholding Order for Taxes (FTB 2905) takes up to 25 percent of disposable earnings under Code of Civil Procedure section 706.070 and the sections that follow. The EDD’s Notice of Levy under Unemployment Insurance Code section 1755 reaches a bank account for the funds on deposit that day, and the bank remits after ten to fourteen business days; its earnings withholding order uses the same 25 percent. The CDTFA’s Notice of Levy under Revenue and Taxation Code section 6702 freezes a bank account, the bank holds the funds for ten days, and its earnings withholding order typically takes 25 percent of after-tax pay.

Each agency releases or reduces a levy for hardship on its own financial statement: the FTB’s own financial statement, DE 926B for the EDD, and CDTFA-403-E for the CDTFA, which provides a hardship hearing before a supervisor. The CDTFA has to release a bank levy on proof of significant financial hardship or payment in certified funds, and both the FTB and the CDTFA reimburse bank charges on a levy issued in error if you claim within 90 days.

What to have ready

The levy notice itself with its date, the LT11 or Letter 1058 and the envelope it came in, the bank’s or employer’s letter, the last three months of bank statements and pay stubs, your rent or mortgage, utilities, insurance, medical and child support figures, and any proof that a payment plan, offer or hearing request was already pending when the levy issued, because a levy that violates section 6331(k) or section 6330(e) comes off on procedure alone.

How fast can an IRS levy be released?

Often within a few business days once the IRS accepts a resolution, since the release is a Form 668-D faxed to the bank or the employer. A bank levy has a hard edge: the release has to reach the bank inside the 21-day hold under section 6332(c). A wage levy ends with the next payroll after the release arrives.

Can the IRS levy without warning?

Not lawfully, except in a jeopardy case. Section 6330 requires the Final Notice of Intent to Levy and 30 days for a hearing request before a levy on wages, bank accounts or other property. If the notice went to an old address or was not sent, the levy was premature and the funds can be returned under section 6343(d).

Does requesting a payment plan stop a levy?

Yes. Under section 6331(k) the IRS cannot levy while an installment agreement request is pending, for 30 days after a rejection, or while an appeal of the rejection is pending, and the same rule covers a pending offer in compromise. A levy already in place is released once the agreement is approved, not automatically on request.

Can the FTB levy my bank account without a hearing?

Yes. California has no Collection Due Process equivalent. The FTB issues an Order to Withhold under Revenue and Taxation Code section 18670 once a balance is final, and the bank remits after ten business days. The remedy is a hardship modification on a financial statement, a payment plan, or a showing that the levy issued in error.