Segal, Cohen & Landis, P.C.
Your Bank Is Holding the Funds for 21 Days — Act Now
IRS tax attorneys — Beverly Hills, CA. National representation.
An IRS bank levy is one of the most jarring collection actions the federal government can take. The IRS serves a levy on your bank, and the bank immediately freezes every dollar in your account up to the amount you owe. Checks bounce. Payroll fails. Automatic payments are returned. But the money is not gone yet: federal law requires the bank to hold the frozen funds for 21 days before remitting them to the IRS. That 21-day holding period exists for exactly one reason — to give you a chance to get the levy released.
At Segal, Cohen & Landis, our tax attorneys treat bank levies as emergencies. We contact the IRS immediately, establish the legal grounds for release — economic hardship, a negotiated installment agreement, a pending offer in compromise, or procedural defects in the levy itself — and work to have the levy released before the holding period expires, so the bank returns the funds to your account instead of sending them to the IRS. We then put a permanent resolution in place so it does not happen again. For more than 33 years, our partner attorneys have personally handled IRS collection matters for a client base of more than 25,000.
How We Help
Our Approach to IRS Bank Levy Release Attorney
Emergency Levy Release Within the 21-Day Window
When the IRS levies a bank account, the bank freezes the funds in the account on the day it receives the levy and must hold them for 21 days before sending the money to the IRS. We act the same day you call: we file a power of attorney, pull your IRS transcripts, contact the assigned Revenue Officer or the Automated Collection System directly, and present the legal and financial grounds for release. If the levy is released before the holding period expires, the bank returns the funds to your account.
Collection Due Process Appeals
Before levying, the IRS must issue a Final Notice of Intent to Levy and Notice of Your Right to a Hearing — Letter LT11 or Letter 1058. You then have 30 days to request a Collection Due Process hearing on Form 12153. A timely CDP request generally bars levy action while the hearing is pending and preserves your right to challenge the IRS in Tax Court. We file CDP requests, present resolution alternatives to the settlement officer, and litigate when the IRS gets it wrong. Even after the 30-day window closes, an equivalent hearing may still be available.
Levy Release on Hardship and Resolution Grounds
The law requires the IRS to release a levy that creates economic hardship — one that prevents you from meeting basic, reasonable living expenses — and when you enter into an installment agreement whose terms do not provide otherwise, among other statutory grounds. The IRS also generally may not levy while an offer in compromise is pending. We document hardship with a complete financial disclosure, negotiate the resolution that fits your finances, and use it to compel release of the levy.
Procedural Defect Challenges
A levy issued without the required Final Notice, during a pending CDP hearing, while an installment agreement or offer in compromise is pending, or after the collection statute of limitations has expired is improper. We audit the IRS's notice history against your account transcripts, and when the IRS skipped a required step, we demand release of the levy — and, where appropriate, the return of funds already remitted.
How It Works
The Resolution Process
Same-Day Case Review
Bank levy cases are triaged immediately. We confirm the date the bank received the levy, calculate how much of the 21-day holding period remains, and identify the fastest viable path to release.
Immediate IRS Contact
We file Form 2848 power of attorney and get on the phone with the assigned Revenue Officer or the Automated Collection System the same day — requesting a levy release or hold while we assemble support.
Financial Disclosure Package
We prepare the Form 433-series financial statement and supporting documents that prove economic hardship or establish your ability to fund a resolution the IRS will accept.
Levy Release Negotiation
We present the grounds for release — hardship, installment agreement, pending offer in compromise, currently not collectible status, or procedural defect — and push for a release faxed to your bank before it remits the funds.
Permanent Resolution
A released levy is a reprieve, not a resolution. We negotiate the long-term outcome — installment agreement, offer in compromise, CNC status, penalty abatement — so the IRS has no reason to levy again.
Ready to Resolve Your Tax Problem?
Our attorneys have helped thousands of clients resolve IRS matters. Your consultation is free and confidential.
Common Questions
Frequently Asked Questions
How does an IRS bank levy work?+
The IRS serves a levy on your bank, and the bank must freeze the funds in your account at that moment, up to the balance you owe. A bank levy is a one-time seizure: it reaches only the money in the account on the day the levy is received. Deposits made afterward are not captured unless the IRS issues a new levy.
What is the 21-day holding period?+
After receiving an IRS levy, your bank must hold the frozen funds for 21 days before remitting them to the IRS. During that window the money is frozen but still at the bank — and if the IRS releases the levy before the 21 days expire, the funds are returned to your account. This is the critical window for action, which is why bank levy cases are handled as emergencies.
What notices does the IRS send before levying a bank account?+
A levy is the end of a notice sequence: a balance-due notice (CP14), followed by reminder notices (CP501, CP503), then CP504 — a Notice of Intent to Levy that by itself authorizes seizure of state tax refunds — and finally the Final Notice of Intent to Levy and Notice of Your Right to a Hearing (Letter LT11 or Letter 1058), which must generally be issued at least 30 days before the IRS can levy your bank account.
What are the grounds for releasing a bank levy?+
The IRS must release a levy when it creates economic hardship, when you enter an installment agreement (unless the agreement provides otherwise), when the liability is paid or the collection statute has expired, or when release will facilitate collection. The IRS also generally cannot levy while an offer in compromise is pending, and a levy issued without proper notice or during a pending CDP hearing is procedurally defective and subject to release.
Can I get my money back after the bank sends it to the IRS?+
It is possible but much harder. Once the bank remits the funds, return of the money is limited to specific circumstances — such as a levy that was premature, procedurally improper, or otherwise wrongful — and requires a formal request to the IRS. The realistic opportunity is the 21-day holding period, which is why immediate action matters more in bank levy cases than in almost any other IRS collection matter.
Is a bank levy the same as a wage garnishment?+
No. A bank levy is a one-time seizure of funds on deposit; a wage levy (garnishment) is continuous and attaches to every paycheck until released. The IRS frequently uses both against the same taxpayer. The release grounds are similar, and resolving the underlying liability — through an installment agreement, offer in compromise, or hardship status — stops both.
Further reading
Beverly Hills · Los Angeles · National
Segal, Cohen & Landis, P.C.
9100 Wilshire Boulevard, 601 East Tower, Beverly Hills, CA 90212
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