How to Stop an IRS and Protect Funds

Step 1: Confirm the Levy Type and the Timeline

Identify exactly what you’re dealing with:

• Bank levy (Form 668-A(C)DO): Your bank freezes the balance on the day the levy hits and holds it for 21 days. If you get the levy released in time, the bank can lift the hold.
• Wage levy (Form 668-W): This is continuous and withholds each paycheck until the IRS releases it or the debt is resolved.
• Other levies: Accounts receivable, merchant accounts, or third-party payers can also be levied.

Gather the notice(s) you received, verify the tax years involved, and note the release deadline (21 days from the bank levy date).

Step 2: Call the IRS Immediately (Be Ready With Facts)

You’ll need:

• Your notice (or at least the tax years and balances).
• Current financials (income, necessary living expenses, bank balance).
• Proposed resolution (see Step 4).

If you have a representative, a signed Form 2848 (Power of Attorney) lets them call on your behalf.

Helpful call script opener:

“I received a bank levy on [date] for tax year(s) [years].

 I’m calling to resolve the balance and request a levy release. I can [pay in full / enter a direct-debit installment agreement / demonstrate hardship]. 

What information do you need from me today to process the release?”

Step 3: Use the 21-Day Bank Levy Hold Strategically

That hold period is your chance to secure a levy release. The IRS will generally consider releasing a bank levy if:

• You pay in full (including penalties and interest), or
• You enter into a qualifying Installment Agreement (often direct-debit), or
• You qualify for Currently Not Collectible (CNC) due to hardship, or
• You submit a timely appeal (see Step 6), or
• There’s a procedural error (wrong taxpayer, wrong amount, already paid, bankruptcy stay, etc.).

Step 4: Choose the Fastest Resolution Path You Qualify For

Pick the option you can execute today—speed matters:

1. Pay in Full
   If you can liquidate safely or borrow at reasonable cost, full payment triggers a quick levy release once the payment posts. Ask the agent to fax or electronically transmit Form 668-D (Release of Levy) to your bank.
2. Direct-Debit Installment Agreement (DDIA)
   For many taxpayers, this is the fastest practical solution. If you owe above certain thresholds, the IRS often requires direct debit. You can formalize a DDIA with Form 433-D and, when appropriate, Form 9465. Request a levy release contingent on the new agreement. (We also have a supportive guide: IRS Form 433-D: How to Set Up a Direct Debit Installment Agreement.)
3. Currently Not Collectible (CNC) Hardship
   If paying would prevent you from meeting basic living expenses, ask for CNC. You’ll typically provide a quick financial statement (individuals: Form 433-F/433-A; businesses: Form 433-B) and supporting documents. If the IRS places your account in CNC, you can request a levy release based on undue hardship.
4. Offer in Compromise (OIC)
   If you likely qualify to settle for less, you can submit an OIC. This isn’t instant, but the IRS may release a levy if you show serious hardship and a viable path (and you remain compliant). Many taxpayers pair an interim DDIA or CNC with an OIC filing.
5. Procedural or Legal Issues
   Levies issued in error (e.g., wrong taxpayer, debt already paid, active bankruptcy, or pending timely appeal) should be released. Explain the defect and furnish proof.

Step 5: Give the IRS What It Needs—Fast

Be ready to transmit documents the same day:

• Proof of funds (if paying in full).
• Banking details for DDIA (routing/account numbers for Form 433-D).
• Financials for CNC or payment plan (paystubs, rent/mortgage, utilities, transportation, health insurance, required child support).
• Compliance proof (unfiled returns filed or in process).
• Any hardship documentation (eviction notice, shutoff notice, medical bills).

Ask the agent to fax or e-fax the levy release to your bank once approved. 

Get the agent’s ID, the case/ACS number, and the where/when they’re sending the release so you can confirm with your bank.

Step 6: File an Appeal if Needed (CDP or CAP)

If you disagree with the levy or need time:

• Collection Due Process (CDP) Hearing – Form 12153
  If you act by the deadline on your Final Notice of Intent to Levy, a timely CDP request halts most collection while Appeals reviews the case.
• Collection Appeals Program (CAP) – Form 9423
  Faster, more flexible than CDP, but you generally can’t go to Tax Court. Useful for disputing the appropriateness of a levy or pushing for a quick release.

Tell the IRS you’re filing, submit the form, and request a hold on enforced collection while Appeals reviews.

Step 7: Coordinate With Your Bank

Once the IRS authorizes a release, follow through:

• Confirm the bank has received the Form 668-D Release of Levy or an official IRS release letter.
• Ask when the freeze will lift.
• If funds were already sent, ask about any return options (often not possible once remitted).
• Document every call (names, dates, times).

Step 8: Prevent the Next Levy

A released levy is not a permanent pass. To avoid repeat action:

• Stay compliant: File all required returns, make current-year withholding/estimates.
• Automate your plan: If you’re in an installment agreement, use direct debit to avoid missed payments.
• Update promptly: If finances worsen, call the IRS before you miss a payment to discuss adjustments or hardship.
• Monitor notices: Respond before deadlines—especially to any new Final Notice.