When taxpayers fall behind on their IRS debts, one of the harshest collection tools the agency can use is a bank levy. Many people assume that once the IRS levies a bank account, it will keep draining the account automatically. That’s not true. Unlike wage garnishments, bank levies are one-time events but that doesn’t mean you’re safe afterward.
What Is an IRS Bank Levy?
A bank levy is the IRS’s legal way of seizing funds directly from your checking or savings account to pay back taxes. Once the levy notice reaches your bank, the institution must freeze the amount available in your account up to what you owe the IRS.
This freeze typically lasts 21 days before the bank sends the funds to the IRS. That holding period gives you a chance to resolve the issue, either by paying, negotiating with the IRS, or proving hardship.
One-Time vs. Continuous Levies
Here’s where bank levies differ from wage garnishments. Bank levies are one-time seizures. The IRS only takes the money that was in your account at the time the levy hit. New deposits after that are not automatically taken.
On the other hand, wage garnishments are continuous. Once a garnishment is in place, every paycheck you earn is reduced until the debt is resolved or the IRS releases the order.
That’s why the timing of a bank levy matters so much. If your paycheck just landed in your account, the IRS may capture those funds in a single blow.
Can the IRS Levy Again?
Yes. Just because a bank levy is a one-time event doesn’t mean the IRS won’t do it again. If your debt remains unpaid and unresolved, the IRS can issue another levy whenever it chooses. Multiple levies can hit your accounts over time until the balance is cleared or you set up a payment arrangement.
How to Stop or Release a Bank Levy
If you’ve received notice of a bank levy, you still have options. You can either:
- Contact the IRS immediately to discuss a payment plan or other resolution. Or;
- Request hardship consideration if the levy would prevent you from paying basic living expenses. Or;
- Work with a tax professional who can negotiate on your behalf and push for a levy release.
Acting quickly is critical during the 21-day hold period. Because once the bank releases the money to the IRS, getting it back is extremely difficult.
Final Thoughts
IRS bank levies may be one-time hits, but they can be financially devastating if you’re caught off guard. The IRS can issue them again and again until your tax problem is resolved. Understanding the difference between a one-time levy on your bank account and a continuous wage garnishment is the first step in taking control.
If you’ve been hit with a levy or received a notice that one is coming, don’t wait. Contact us at the Law Office of Steven N. Klitzner to explore your options and protect your finances.
Steven N. Klitzner, P.A. is a tax attorney based in Miami, Florida. He has been practicing tax law for over 40 years, and currently holds a 10.0 rating by Avvo. Mr. Klitzner was appointed to the IRS Service Advisory Council in 2021 and is... 
