IRS Bank Account Protection Checklist and Action Guide Checklist

1. Assessment of your tax liability and delivery of a Notice and Demand for Payment.

2. Your neglect or refusal to pay after receiving billing notices.

3. Delivery of a Final Notice of Intent to Levy and Your Right to a Hearing at least thirty days before the levy.

4. The thirty-day notice period has expired without resolution.

When the IRS serves a levy on your bank, the bank immediately freezes the funds available in your account at that moment. The bank must hold these funds for twenty-one days before sending them to the IRS. This twenty-one-day holding period gives you time to contact the IRS, request a hearing, or arrange payment. Deposits made after the levy is received are not affected by that particular levy, though the IRS can issue additional levies to capture those funds.

Who Should Use This Checklist

This checklist applies to you if

• The IRS sent a Final Notice of Intent to Levy and Your Right to a Hearing (Notice LT11,

Letter 1058, or CP90/CP297) stating your bank account may be levied.

• Your bank has notified you about the IRS's levy and the freezing of your account.
• If you have not paid back federal income taxes, self-employment taxes, or trust fund

taxes and have received collection notices, you should take the following steps.

• You need to understand your appeal rights and options before or after a bank levy

occurs.

This checklist does not apply to you if

• No federal tax debt exists, or unfiled current-year returns represent the only issue.
• Your bank account was frozen by a creditor, child support agency, or state tax authority

rather than the IRS.

• You currently have an approved installment agreement and are making timely payments.
• You are in bankruptcy, which triggers an automatic stay on collection actions.
• An audit notice arrived, but no collection action has been proposed.

What Determines the Outcome

The outcome depends on how quickly you respond and whether you protect your right to appeal within thirty days from the date printed on your Final Notice of Intent to Levy. The thirty-day period begins from the notice date itself, not from the date you physically received it. However, the mailbox rule protects you: if you mail Form 12153 requesting a Collection Due Process hearing and it is postmarked on or before the 30th day, your request is considered timely, even if the IRS receives it after this date.

Filing a timely Collection Due Process hearing request suspends enforced collection actions, including bank levies, while your hearing is pending. This gives you time to negotiate collection alternatives, such as installment agreements or Offers in Compromise. Missing the thirty-day deadline eliminates your automatic right to stop collection and your ability to appeal to the Tax

Court. However, you retain important appeal rights through an Equivalent Hearing, available up to one year after the notice date, though this option does not automatically suspend collection activity or provide Tax Court review rights.

Your strongest leverage exists before the levy is applied to your account. Once funds are frozen and sent to the IRS, retrieving them requires demonstrating that the levy was improper or that it creates immediate economic hardship—a much more difficult and time-consuming process.

The Checklist

1. Locate your IRS notice and identify which type you received. The Final Notice of Intent to

Levy and Your Right to a Hearing appears as Notice LT11, Letter 1058, CP90 (for individuals), or CP297 (for businesses). If your bank informed you of a levy, request a copy of the IRS form served to them. Write down the notice date printed on the letter and any case number listed.

2. Calculate the thirty-day deadline from the date printed on your Final Notice. Count thirty days forward from the notice date shown on the letter itself, not from when you received it. The mailbox rule applies to your response: if you mail Form 12153 and it is postmarked by the 30th day, it is timely. If your bank account has already been frozen, check whether you are still within the original thirty-day window—you may still be able to request a Collection Due Process hearing.

3. Review the tax years and amounts that the IRS indicates you owe. Compare the notice information against your tax records, payment receipts, and previous correspondence.

Immediately document any discrepancies, such as payments you made that might not appear credited or tax years you think you've already resolved.

4. Contact your bank to determine if a levy has been served and when the twenty-one-day hold period expires. Ask your bank for written confirmation of the levy date, the amount frozen, and when funds will be sent to the IRS. The bank must hold the funds for twenty-one days after receiving the levy before surrendering them. During this period, you cannot access the frozen funds, but you can work to resolve the levy with the IRS.

5. Request a Collection Due Process hearing if you are within thirty days of your Final

Notice date. Complete Form 12153, Request for a Collection Due Process or Equivalent

Hearing, and mail it via certified mail to the address shown on your notice before the deadline expires. Your written request must include your name, Social Security number or EIN, the tax years involved, and your contact information. Filing this form suspends levy action while your hearing is pending and preserves your right to appeal to Tax Court if you disagree with the hearing determination.

6. Request an Equivalent Hearing if the thirty-day deadline has passed but less than one year has elapsed. Use Form 12153 and send it to the address on your notice. An

Equivalent Hearing addresses the same issues, such as levy propriety and available collection alternatives, but does not halt collection, require IRS levy suspension, or grant

Tax Court review rights. However, you can still propose installment agreements and other alternatives during this process.

7. Contact the IRS immediately if the levy is causing genuine economic hardship. Call the phone number on your levy notice and explain why the levy prevents you from paying necessary living expenses such as housing, utilities, food, or medical care. The IRS must release a levy that creates immediate economic hardship. Before you call, document your monthly income and necessary expenses, and be ready to provide this information upon request.

8. Determine if any funds in your account are exempt from levy under federal law.

Unemployment benefits received under any state or federal unemployment compensation law are fully exempt from levy under IRC Section 6334(a)(4).

Supplemental Security Income (SSI) payments under IRC Section 6334(a)(11) are also protected. However, Social Security Disability Insurance (SSDI) benefits are not automatically exempt—the IRS can levy up to 15 percent of SSDI payments through a manual levy, although SSDI was removed from the automated Federal Payment Levy

Program in 2015. If you are required by court order to pay child support, amounts necessary to comply with that obligation may be exempt under IRC Section 6334(a)(8), but this protects money you must pay out for support, not child support payments you

receive. Document the source and date of any potentially exempt deposits and notify the

IRS in writing if exempt funds were levied.

9. Request an installment agreement if you are unable to pay the full amount immediately.

Apply online at IRS.gov using the Online Payment Agreement tool, call the number on your notice, or submit Form 9465. Include complete financial information showing your income, necessary expenses, and assets. When an installment agreement is approved, and you are in compliance, the IRS typically releases existing bank levies as part of establishing your payment plan. After receiving approval, contact the IRS to verify the release of the levy and obtain a written confirmation.

10. Gather complete financial documentation before proposing payment arrangements or attending a Collection Due Process hearing. List all monthly income sources from all household members, necessary living expenses based on IRS Collection Financial

Standards, outstanding debts, bank account balances, and assets you own, including real estate, vehicles, and investments. The IRS requires this information to evaluate hardship claims, determine your ability to pay, and consider collection alternatives.

Organize recent pay stubs, bank statements, mortgage or rent statements, utility bills, and documentation of extraordinary expenses such as medical costs.

11. Prepare a written statement for your Collection Due Process hearing explaining your position. State clearly whether you dispute the underlying tax liability, believe the collection is causing economic hardship, or have procedural objections to how the levy was issued. During the hearing, you can propose collection alternatives, including installment agreements, Offers in Compromise, or Currently Not Collectible status. The

Appeals Officer conducting your hearing has the authority to approve these alternatives.

Focus on one or two strong arguments supported by documentation rather than presenting multiple weak claims.

12. Submit an Offer in Compromise only if you qualify based on doubt as to collectibility or effective tax administration. Use Form 656-B to determine if you qualify before submitting. Complete Form 656 and all required financial disclosures, including Form

433-A (individuals) or Form 433-B (businesses). While submitting an Offer in

Compromise does not automatically release an existing bank levy, the IRS may halt collection actions, including additional levies, once your application is under active consideration. Contact the IRS to request a levy release based on your pending offer and demonstrated financial circumstances. Please note that interest and penalties continue to accrue during the review period, which typically lasts from six months to two years.

13. Do not move money between accounts, close accounts, or change banks in an attempt to avoid the levy. The IRS can levy multiple accounts, and moving funds appears as evasion, damaging your credibility in negotiations and potentially triggering additional

enforcement or investigation. The IRS has access to financial information and will eventually locate new accounts. Work within the IRS system openly to preserve your ability to negotiate favorable terms.

14. Keep detailed records of all IRS correspondence and communications with the IRS.

Maintain copies of every notice, letter, and Form 12153 you submit; certified mail receipts showing postmark dates; and notes from phone calls, including dates, IRS employee names or ID numbers, and what was discussed. These records are crucial in the event of disputes regarding deadlines, the agreed-upon terms, or whether proper procedures were followed.

Mistakes That Worsen Your Situation

• Ignoring the Final Notice of Intent to Levy is a mistake because you might assume that

the IRS will contact you again. The written notice is your warning. After the thirty-day notice period expires, the IRS can levy your account at any time—not automatically within a specific timeframe, but when IRS processing schedules dictate, which could be days, weeks, or months later. The IRS is not required to call, email, or provide additional warnings before levying assets.

• Many people mistakenly confuse the deadline calculation by believing it starts when they

receive the notice. The thirty-day deadline for requesting a Collection Due Process hearing begins from the date printed on the notice itself. However, the mailbox rule protects your timely filing: if you mail Form 12153 and it is postmarked on or before the

30th day, it is considered timely, even if the IRS receives it after this date. Keep your certified mail receipt as proof of the postmark date.

• Assume you must choose between requesting a hearing and negotiating a payment

plan. A Collection Due Process hearing is the forum where you negotiate alternatives with an Appeals Officer who has the authority to approve installment agreements, Offers in Compromise, and other collection alternatives. The hearing process includes negotiating payment arrangements, so you don't have to make a choice.

• You can respond informally by calling the IRS without filing a written Form 12153. Verbal

requests for a Collection Due Process hearing are not accepted. Only a written, signed

Form 12153 sent to the address specified on your notice preserves your appeal rights.

Phone calls may be noted in IRS records, but have no legal effect for purposes of meeting deadlines.

• Making partial payments without an approved written agreement, thinking it will stop the

levy. The IRS applies payments to your account, but will continue levy action unless you have established a formal installment agreement or other collection alternative. Partial

payments indicate to the IRS that you have available funds, but they do not stop enforcement. Refrain from making partial payments until you have negotiated and received written approval of a payment arrangement that includes the release of the levy.

• Assume that all Social Security or disability income is automatically protected. Social

Security Disability Insurance (SSDI) is not automatically exempt from an IRS levy. While removed from the automated Federal Payment Levy Program in 2015, revenue officers can still manually levy up to fifteen percent of SSDI payments under IRC Section

6331(h). Supplemental Security Income (SSI) under IRC Section 6334(a)(11) has stronger statutory protection. You must identify the source of deposits and assert exemptions in writing if exempt funds were levied.

• Believing that once money is levied, it is gone forever. The IRS can return levied funds if

you demonstrate that the levy was improper, that exempt funds were seized, or that the levy creates immediate economic hardship. However, obtaining returned funds requires formal written requests and supporting documentation, and the process often takes weeks or months. The IRS will not volunteer to return money—you must demonstrate legal grounds and follow proper claim procedures.

• Changing banks or moving money to hide funds from the IRS is considered tax evasion.

This damages your credibility and appears as evasion, and the IRS will eventually locate your accounts and issue new levies. Financial institutions report account information to the IRS, and suspicious account activity can trigger additional enforcement scrutiny or investigation.

When Professional Help Becomes Necessary

Seek professional assistance when the thirty-day hearing deadline is within five days, and you are uncertain how to respond appropriately. Tax professionals familiar with IRS procedures can quickly prepare and file Form 12153, ensure required tax forms are complete, and confirm timely submission tied to your tax account.

Complex cases involving multiple tax years, trust fund recovery penalties, or debts exceeding

$25,000 benefit from representation. These matters require knowledge of the Internal Revenue

Code, collection alternatives, financial analysis, and negotiation strategies that affect outcomes tied to a tax return.

Professional help becomes critical when you believe the debt amount is incorrect or has already been paid. Challenging liability requires IRS account transcripts, payment records, and identity verification steps if Identity Theft is suspected, as well as the proper presentation of evidence during the Collection Due Process hearing.

The process for requesting returned funds is time-sensitive if bank charges and levies have already been applied to your account. Experts can help you file claims, show proof of financial difficulties, and deal with problems related to tax scams, phishing emails, or identity theft, including how to report identity theft or use an Identity Protection PIN.

The IRS conducts Collection Due Process hearings in accordance with strict procedures.

Appeals Officers look at financial information based on Collection Financial Standards, and professionals can share documents, represent you with a power of attorney, use the IRS Online

Account or its tools, and work with the Taxpayer Protection Program when necessary.

When direct communication with the IRS is unsuccessful, professional representation can reopen discussions, escalate complaints when appropriate, and advance the case more effectively.

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