Federal Tax Levy

A Federal Tax Levy is the most aggressive collection action taken by the IRS to seize your property to satisfy a tax debt. Unlike a lien, which is simply a legal claim against your assets, a Federal Tax Levy allows the government to actually take your property. For example, the IRS can issue a bank levy to legally obtain your cash directly from your savings and checking accounts, or they can seize your wages, social security benefits, and retirement accounts.

The person, company, or financial institution that is served the levy must comply by law. Dealing with an active levy requires an immediate, professional intervention to protect your hard-earned assets and restore your financial stability.

How a Federal Tax Levy Works

When you owe back taxes, the IRS sends a series of notices demanding payment. If these notices go ignored, the IRS will issue a final notice titled Notice of Intent to Levy and Notice of Your Right to a Hearing. Once this notice is sent, the IRS has the legal authority to start seizing your assets after 30 days.

The most common types of levies include:

  • Bank Levies:  The IRS contacts your bank and freezes the funds in your account. The bank is required to hold the funds for 21 days, giving you a very narrow window to secure a legal release before the money is sent to the government.

  • Wage Garnishments: The IRS contacts your employer and instructs them to send a significant portion of each paycheck directly to the IRS until your tax debt is paid in full.

  • Asset Seizure: In severe cases, the IRS can seize and sell physical property you own, such as vehicles, real estate, or business equipment.

Steps to Release an IRS Federal Tax Levy

Receiving notice of a levy can feel overwhelming, but it is entirely possible to stop it if you act quickly. Our team utilizes several legal strategies to secure a Federal Tax Levy release based on your unique financial situation:

1. Proving Financial Hardship

If clearing out your bank account or garnishing your wages prevents you from paying basic life necessities—such as rent, utilities, or medical bills—the IRS is required to release the levy under financial hardship guidelines.

2. Establishing an Installment Agreement

Entering into an approved payment plan with the IRS showing that you are actively working to resolve your debt will frequently halt active collection actions and release an ongoing wage garnishment.

3. Submitting an Offer in Compromise (OIC)

If you cannot afford to pay your full tax liability, we can negotiate an agreement allowing you to resolve your liability for an amount approved by the IRS based on your current financial situation.

4. Filing for a Collection Due Process (CDP) Hearing

If you receive a final intent to levy notice, we can file a request for a CDP hearing within the 30-day window. This immediately stops the IRS from executing the levy and forces them to negotiate an alternative resolution with us.

Why You Need Expert Representation

The IRS rules surrounding asset protection are mathematically precise and rigid. Attempting to negotiate a bank release on your own often results in frustrating delays, and once that 21-day holding period expires, your money is gone for good.

At Total Tax Solutions, we act as your dedicated shield. We pull your official IRS transcripts, immediately communicate with revenue officers, and put a stop to aggressive collection streams so you can breathe easy again.

Schedule Your Consultation Today

Don’t wait for the IRS to freeze your bank accounts or clear out your paycheck. Take control of your situation and protect your financial freedom. Contact our team today to schedule your comprehensive evaluation, and let us help you resolve your Federal Tax Levy immediately.