IRS Bank Levy Release — Denver Tax Attorney & CPA
Your bank account is frozen. Transactions are bouncing. Payroll may be at risk, or rent, or the basic expenses that keep your household running. If the IRS has levied your bank account, the situation feels like a wall — but it is not. There is a narrow window to act, and what you do in the next few days matters enormously.
My name is Philip Falco. I am a tax attorney and a licensed CPA practicing in downtown Denver. I handle IRS collection cases exclusively — no estate planning, no general business law, no family court. Just tax problems. When a client calls me about a bank levy, I pull their IRS transcripts the same day, identify every available collection alternative, and contact the IRS directly. Because I hold both a law license and a CPA license, I do not have to hand the financial analysis off to someone else. I do it myself, in one step, which is how we move fast enough to matter.
If your account has been levied, call (303) 626-7000 now. Read below to understand exactly what is happening and what we can do about it.
What Is an IRS Bank Levy?
A bank levy is the IRS seizing money directly from your bank account to satisfy an unpaid tax debt. It is not a lien — a lien is a legal claim against your assets that travels with your property. A levy is an active taking. The IRS instructs your bank to freeze a specific amount and hold it in suspense.
Before the IRS can levy your account, it is required by law to send you a series of notices. The sequence typically ends with a Final Notice of Intent to Levy and Notice of Your Right to a Hearing — this arrives as IRS Letter LT11 or Letter 1058. From the date on that notice, you have 30 days to request a Collection Due Process (CDP) hearing. Most people do not realize that requesting a hearing automatically suspends levy action while the hearing is pending. If that window passed without a response, the IRS is within its rights to proceed.
What surprises many people is that the IRS does not need to notify you the moment the levy hits. You often find out when a transaction fails.
The 21-Day Window — Why You Need to Call Today
When the IRS issues a levy on a bank account, federal law requires your bank to hold the levied funds for 21 days before surrendering them to the IRS. That holding period exists specifically to give taxpayers time to resolve the underlying issue or demonstrate a hardship.
Once the 21 days expire, the money is gone. The bank sends it to the IRS and there is no mechanism to reverse the transfer.
This is why the first call matters. Within that 21-day window, a levy release is achievable through several routes:
- Requesting a Collection Due Process hearing (if the 30-day window from the Final Notice has not yet closed)
- Entering an installment agreement that satisfies the IRS the debt will be paid
- Submitting an Offer in Compromise — the IRS will generally suspend collection while an OIC is pending
- Demonstrating financial hardship sufficient to qualify for Currently Not Collectible (CNC) status
- Showing the levy is creating an economic hardship — under IRC § 6343, the IRS is required to release a levy that prevents a taxpayer from meeting basic, necessary living expenses
Each of these requires moving quickly, presenting the right documentation, and communicating with the IRS in the language it responds to. That is what I do.
How I Handle a Levy Release
When you call my office about a bank levy, here is what happens:
Same day: I pull your IRS account transcripts using a Power of Attorney. Transcripts tell me exactly what the IRS has assessed, what notices were issued and when, what collection alternatives are on the table, and whether any deadlines are still open. This takes about an hour and gives me a complete picture of your situation — no guessing, no assumptions.
Within 24 hours: I contact the IRS Collection division directly. Depending on what the transcripts show, I am either filing for a CDP hearing, presenting a financial hardship argument under § 6343, or proposing a collection alternative that the IRS can accept quickly enough to stop the clock.
Simultaneously: I prepare the financial analysis. This is where the CPA license does real work. The IRS uses specific financial standards — National Standards and Local Standards — to evaluate your ability to pay. Knowing those numbers cold, and knowing how to document your actual expenses against them, is the difference between a hardship argument that lands and one that gets rejected. Most attorneys work with an accountant to build this. I do it in the same office, in the same meeting.
The goal: A levy release letter faxed to your bank before the 21-day window closes, followed by a sustainable resolution that prevents the IRS from levying again.
What Happens After the Levy Is Released
Releasing the levy stops the immediate bleeding — but it does not resolve the underlying tax debt. Without a permanent resolution in place, the IRS can issue another levy. The release is the beginning of the process, not the end.
Depending on your financial situation, the long-term resolution typically takes one of four forms:
Installment Agreement: A monthly payment plan negotiated with the IRS. The amount is based on your actual income, allowable expenses, and the total debt owed. A properly negotiated installment agreement keeps you in good standing and stops further collection action.
Offer in Compromise: If you genuinely cannot pay the full amount owed — either because of limited income, limited assets, or both — you may be able to settle the debt for less than the full balance. As both an attorney and a CPA, I handle OIC cases from start to finish. Learn more about Offer in Compromise →
Currently Not Collectible (CNC) Status: If your allowable expenses equal or exceed your income, the IRS may suspend collection activity entirely. CNC status is not forgiveness — the debt remains — but it stops levies, garnishments, and aggressive collection while your financial situation is what it is.
Penalty Abatement: In many cases, a significant portion of what the IRS claims you owe is penalties and interest, not the original tax. Penalties can often be reduced or eliminated through first-time abatement or a reasonable cause argument. Learn more about penalty abatement →
IRS Levy on Wages vs. Bank Account — What’s the Difference?
These are two distinct collection tools and they work very differently.
A bank account levy is a one-time snapshot. The IRS freezes what is in the account at the moment the levy hits. If you have $12,000 in the account that day, $12,000 is frozen. Future deposits are not affected by that levy — though the IRS can issue subsequent levies.
A wage levy (sometimes called a wage garnishment) is continuous. Once issued, it attaches to every paycheck until the debt is resolved or the levy is released. The IRS calculates the exempt amount based on your filing status and number of dependents, and your employer sends the rest to the IRS with each pay period.
Both are serious. Both are releasable. But the tactics and urgency differ, and confusing them can lead to the wrong response at the wrong time.
Frequently Asked Questions
How long does it take to get a bank levy released?
In straightforward cases where an installment agreement or hardship argument is ready to present, a release can happen within the 21-day window — sometimes within a few days of your call. More complex situations involving CDP hearings or OIC submissions take longer, but we can often get a temporary hold in place while the longer process moves forward.
Can the IRS levy my business bank account?
Yes. The IRS can levy accounts held in a business name if you are personally liable for the underlying tax debt — which is common in sole proprietorships and single-member LLCs, and in any situation involving a Trust Fund Recovery Penalty assessed against you personally for unpaid employment taxes.
What if I already missed the 21-day window?
The money has transferred to the IRS. It cannot be reversed. But the underlying debt still needs resolution, and without a plan in place the IRS will levy again. The priority shifts from release to resolution — negotiating a collection alternative that stops the next levy before it happens.
Does the IRS have to warn me before levying my bank account?
Yes. The IRS is required to send a Final Notice of Intent to Levy before proceeding. However, that notice may have been sent to an old address, or may have been overlooked among a stack of IRS correspondence. Many clients come to me having never knowingly seen the final notice. That does not invalidate the levy, but it may affect the CDP hearing timeline and certain hardship arguments.
Will hiring an attorney stop a levy?
Hiring an attorney does not automatically stop a levy — but taking the right legal action does. A CDP hearing request filed timely will suspend levy action. An accepted installment agreement will result in a release. A documented economic hardship will require the IRS to release the levy under § 6343. The difference between a levy that gets released and one that does not is almost always whether someone took the right steps quickly enough.
Can the IRS levy my retirement account or Social Security?
Yes to both, with limitations. The IRS can levy IRAs and 401(k) accounts. Social Security benefits can be levied through the Federal Payment Levy Program, which takes 15% of each benefit payment. These levies are releasable through the same mechanisms as bank levies, but the financial hardship argument is often stronger given the nature of the income.
Why a Tax Attorney Who Is Also a CPA
Most tax attorneys will tell you to hire a CPA to prepare the financial statements and collection information statements that the IRS requires. Most CPAs will tell you to hire an attorney to handle the legal proceedings. That handoff costs time, and in a levy situation, time is what you do not have.
I hold both licenses and I practice as both. I have been doing this in Denver since 1997. When I take your case, there is no second professional loop — the financial analysis, the legal strategy, and the IRS communication all happen in the same office, with the same person who is accountable for the result.
If the IRS has levied your bank account — or if you have received a Final Notice of Intent to Levy and the 30-day window is still open — call me today.
(303) 626-7000
Philip Falco, Tax Attorney & CPA
730 17th Street, Suite 900 · Denver, CO 80202
phil@coloradolegal.com
This page is for general informational purposes and does not constitute legal advice. Every tax situation is different. Contact our office to discuss the specific facts of your case.