A tax levy is one of the most aggressive collection tools the IRS possesses. Unlike a lien, which is a claim against your property, a levy actually seizes it—your bank account can be frozen, your wages garnished, or your car and home taken. If you’re facing a levy, time is critical. Fortunately, you have powerful legal options to stop it. As tax levy attorneys, we’ve helped countless clients halt seizures and regain control of their finances. Here are the most effective strategies.
1. Request a Collection Due Process (CDP) Hearing
The IRS must send you a Final Notice of Intent to Levy (Letter 1058 or LT11) at least 30 days before taking action. Within that 30‑day window, you have the right to request a Collection Due Process (CDP) hearing with the IRS Office of Appeals. This request automatically stops the levy while your case is reviewed. At the hearing, you can propose alternatives—installment agreement, Offer in Compromise, or Currently Not Collectible status—or argue that the levy would cause economic hardship. Do not miss this deadline. Once the 30 days pass, the IRS can levy without further warning.
2. Enter an Installment Agreement
If you can pay your tax debt over time, a formal installment agreement is often the quickest way to stop a levy. Once the IRS approves your payment plan, it generally releases any pending levy. For individuals with debts under $50,000, a streamlined agreement may be available without extensive financial disclosure. Your attorney can negotiate affordable monthly payments and ensure the IRS lifts the levy immediately.
3. Submit an Offer in Compromise (OIC)
When you cannot pay your full debt and your “reasonable collection potential” (income, expenses, assets) is less than what you owe, an Offer in Compromise allows you to settle for a lower amount. While your OIC is being processed (typically 6–12 months), the IRS suspends all collection actions, including levies. If the IRS accepts your offer, the levy is permanently lifted. An experienced tax attorney can calculate your RCP correctly and present a compelling case.
4. Qualify for Currently Not Collectible (CNC) Status
If you have no disposable income or assets to pay anything now or in the foreseeable future, CNC status halts all collection actions, including levies. The IRS reviews your financial statements (Form 433‑F or 433‑A) to verify hardship. Interest still accrues, but you are protected from wage garnishment and bank seizures. CNC status must be renewed periodically, but it provides immediate relief from an active levy.
5. Claim Exemptions Even After a Levy
If the IRS has already levied your bank account or wages, you can still recover protected funds. Exempt income includes Social Security, disability, child support, unemployment benefits, and a portion of your wages (based on filing status and dependents). Your attorney can file a claim with the IRS and your bank to have these funds returned. For a wage garnishment, submit Form 668‑W to your employer to assert your protected earnings.
6. Appeal a Wrongful Levy
If the IRS ignores your exemptions or continues collection after you’ve entered a resolution, you have the right to appeal. Your attorney can request a collection appeal or file suit in federal court. The threat of litigation often prompts the IRS to comply with the law.
Don’t Wait – Act Now
A tax levy can upend your life, but you have legal weapons to fight back. From a CDP hearing to installment agreements, OICs, CNC status, and exemption claims, the law provides multiple paths to stop the seizure. The key is acting immediately—ideally before the 30‑day notice expires, but even after a levy is served, you can still reclaim your assets.
Facing an IRS levy? Contact our tax relief lawyer today for a free, confidential consultation. We’ll review your case, stop the levy, and protect your future. You don’t have to face the IRS alone.