IRS Levy Issued After Missed Deadline Checklist
Understanding IRS Levies and Collection Actions
A tax levy is the legal seizure of your property or rights to property to satisfy an unpaid federal tax liability. The Internal Revenue Service can issue levies without court approval once certain procedural requirements are met, including sending you required notices and allowing time for response. Bank levies freeze your account immediately when served, with funds held for 21 days before transfer to the IRS. Wage garnishment through levies is a continuous process, affecting every paycheck until the debt is resolved or the levy is lifted.
Who Should Use This Checklist
This checklist applies to taxpayers who have received a Notice of Levy, missed a payment deadline on a prior notice, had their bank account frozen, or had their employer contacted by the IRS. This checklist does not apply if you have an active Installment Agreement in good standing, are currently in an approved Collection Appeals process or offer in compromise, or have not received any IRS collection notices within the past year.
Step-by-Step Checklist: Responding to an IRS Levy
Step 1: Locate Your Most Recent IRS Notice
Find the Final Notice of Intent to Levy or Letter 1058 showing the missed deadline, amount owed, and case number. Write down these details along with the notice date and any specific instructions provided by the IRS for your records.
Step 2: Determine the Type of Levy
Bank levies freeze funds immediately and are one-time seizures of available balances. Wage garnishment levies are continuous, taking a portion of every paycheck indefinitely until the federal tax liability is resolved or released.
Step 3: Contact Your Bank and Employer Immediately
Ask your bank if your funds have been frozen and verify the 21-day hold period before initiating the transfer. Contact your employer’s payroll department to confirm whether they received IRS
Form 668-W for wage garnishment.
Step 4: Gather Your Financial Information
Compile documentation of your monthly income, essential living expenses, and current asset balances using Form 433-A if required. This information is required if you request a payment plan, hardship relief, or levy release from the IRS.
Step 5: Call the IRS Collection Line
Contact the Automated Collection System at 800-829-1040 with your Social Security number and notice number available. Ask specifically whether a levy is currently active, what amount is being collected, and what payment options are available to you.
Step 6: Respond in Writing If Required
If your notice includes a response deadline for appeal rights, send a written response via certified mail to the address shown, even if you cannot pay in full. Timely written responses preserve your right to request a CDP hearing using Form 12153.
Step 7: Propose a Payment Alternative
If you cannot pay in full, immediately propose a specific installment agreement using Form
9465, offer in compromise, or request Currently Not Collectible status based on financial hardship. Provide detailed financial information, including income, expenses, and assets, to support your request.
Step 8: File Any Missing Tax Returns
The IRS will not release levies or approve payment arrangements until all delinquent tax returns are filed. Contact a tax professional or the Taxpayer Advocate Service if you need assistance filing income tax returns for prior years quickly and accurately.
Step 9: Document All IRS Communications
Record the date, time, name, and employee ID number of every IRS representative you speak with. Keep copies of all notices received and correspondence sent to create a complete tax account record.
- Ignoring the levy notice: Levies do not expire automatically and will continue until you
- Calling without required information: IRS representatives cannot efficiently assist you
- Sending payments without proper identification: Payments sent without specifying
- Assuming any payment stops the levy: Partial payments do not automatically halt
- Relying only on verbal agreements: Verbal promises made during phone calls are not
- Disputing debt without formal procedures: If the underlying tax assessment is
- Wage garnishment and bank levy release
- Tax lien removal and credit protection
- Offer in Compromise and installment agreements
- Unfiled tax return preparation
- IRS notice response and representation
Step 10: Request Hardship Relief If Applicable
If the levy prevents you from paying essential living expenses, request economic hardship relief by submitting proof of income and necessary expenses. The IRS may temporarily delay collection efforts if you demonstrate genuine financial hardship through supporting documentation.
Common Mistakes to Avoid take action to resolve the debt. Each week of inaction results in additional asset seizure from your wages, bank accounts, or tax refund through the Treasury Offset Program. without your notice number, case number, and Social Security number. Have all tax documents available before calling to avoid delays and ensure productive resolution discussions. the tax year and notice number may be misapplied or delayed in processing. Always reference the specific notice and tax period when submitting any payment to the Internal
Revenue Service. enforcement actions unless you establish a formal installment agreement or the IRS accepts an alternative resolution. The levy remains in effect until the full debt is paid or a written agreement is reached. recorded in your official tax account file. Always obtain written confirmation of any payment plan, hardship status, or levy release agreement to protect your taxpayer's rights. incorrect, you must file a written appeal or request an equivalent hearing with the Office of Appeals following official IRS procedures. Informal disagreements stated during phone calls do not constitute valid disputes or stop collection activity.
What Happens Without Action
If you do not respond within 21 days of a bank levy, the IRS will receive the frozen funds from your financial institution. Wage garnishment continues taking a portion of every paycheck indefinitely until the debt is satisfied or you establish an approved payment arrangement. The
IRS may issue additional levies against other income sources, including Social Security benefits, retirement funds, state income tax refunds, and federal payments, while interest accrues on your unpaid balance.
When to Seek Professional Help
Consider hiring a tax professional or contacting the Taxpayer Advocate Service if the levy affects your ability to pay essential living expenses, you owe multiple years of unpaid taxes with delinquent tax returns, the IRS has issued simultaneous levies on various income sources, or you believe the federal tax liability was assessed incorrectly. Professional representation can help negotiate levy releases, establish installment agreements, request Penalty Abatement, and protect your appeal rights under the Taxpayer Bill of Rights throughout the collection process.
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