A levy is the IRS taking money. Not threatening to, not securing a claim against it. Taking it.
But almost everyone who lands on this page still has time, and the amount depends on two things: which notice you received, and whether money has already moved. Start there, because panicking about the wrong stage is how people waste the window they still have.
| Where you are | What the IRS can actually do right now | Your window |
|---|---|---|
| CP14, CP501, or CP503 received | Nothing yet. These are balance notices and reminders | Weeks to months. The cheapest time to fix this |
| CP504 received | State tax refund only. Despite the words “Notice of Intent to Levy” on the front, this does not authorize a wage or bank levy | Act before the next letter. Your bank account is not at risk from this notice |
| LT11, Letter 1058, or CP90 received | This is the real one. After 30 days: wages, bank accounts, receivables, Social Security | 30 days from the date on the notice to request a Collection Due Process hearing on Form 12153 |
| Bank levy issued | Your account is frozen up to the levied amount | 21 days. The bank holds the funds before sending them. This is the most important number on this page |
| Wage levy started | A portion of every paycheck goes to the IRS, continuously | No fixed deadline, but it continues until released. Every pay period costs you |
| Funds already sent to the IRS | The money is gone from your account | Release will not bring it back, but a wrongful levy claim or a hardship-based return of property may. Time-limited |
| Notice never received | Depends on whether the IRS met its notice obligations | Worth investigating immediately. Defective notice is a real argument |
Two of those rows carry most of the value on this page.
If you are holding a CP504, breathe. It authorizes the IRS to take your state tax refund, and it warns that more is coming. The notice itself doesn’t let the IRS into your bank account. That is the LT11, Letter 1058, or CP90, and it must come separately. Our guide on what a CP504 actually is covers the distinction.
If your account was just frozen, you have 21 days. Not “act fast” in a vague sense. Twenty-one days during which the bank holds the money and hasn’t sent it. That window is when a release gets negotiated, and it closes.
| Notice | What it is | Authorizes |
|---|---|---|
| CP14 | First balance due notice | Nothing. It is a bill |
| CP501 | Reminder | Nothing |
| CP503 | Second, more urgent reminder | Nothing |
| CP504 | Notice of Intent to Levy, IRC 6331(d) | Levy of your state tax refund. Also a warning that a lien may be filed |
| LT11 / Letter 1058 / CP90 | Final Notice of Intent to Levy and Notice of Your Right to a Hearing, IRC 6330 | After 30 days: wages, bank accounts, receivables, federal payments, property |
| Letter 3172 | Notice of Federal Tax Lien Filing and Your Right to a Hearing | This is a lien, not a levy. Different notice, different right |
| Form 668-A | Notice of Levy on a bank or third party | The bank has already been contacted. The 21-day clock is running |
| Form 668-W | Notice of Levy on Wages, Salary, and Other Income | Sent to your employer. Continuous until released |
LT11 and Letter 1058 are the same notice. The difference is who sent it: LT11 comes from the Automated Collection System, Letter 1058 from a revenue officer assigned to your case. If yours came from a revenue officer, a human being now owns your file, which changes both the speed and the possibilities.
More detail in our guides on what a notice of levy means and how many notices the IRS sends before a levy.
This distinction decides your strategy, and most published information blurs it.
A bank levy is a snapshot. It reaches whatever was in the account on the day the bank received Form 668-A. Money deposited the next day is not captured. The bank holds the funds for 21 days, then sends them. If the levy doesn’t capture enough, the IRS must issue a new one.
A wage levy is continuous. Under IRC 6331(e), Form 668-W attaches to your pay and stays attached until the IRS releases it or the liability is satisfied. There is no second levy needed. Every pay period, it happens again.
What you keep from a wage levy is not a percentage. Your employer applies an exempt amount from IRS Publication 1494, based on your filing status and number of dependents, and everything above that goes to the IRS. For most people, this is a much larger share of their paycheck than they expect, which is why a wage levy is usually the more urgent of the two, even though a bank levy feels more dramatic.
You claim the exemption by completing and returning the statement of dependents your employer gives you. Fail to return it and the exempt amount defaults to the lowest tier. See which exemptions protect you from wage garnishment and how much the IRS can take in wage garnishment.
IRC 6334 exempts specific property from levy. The list is narrower than people hope and broader than they fear.
Your principal residence requires court approval. The IRS cannot seize your main home on its own authority. It must obtain a federal court order, and that requirement is a meaningful practical protection.
Retirement accounts are not on the exempt list. The IRS can levy a 401(k) or IRA, though internal policy discourages it and generally requires flagrant conduct plus consideration of your access rights. It is uncommon, not impossible.
Our most-read guide covers this in depth: what kind of bank accounts the IRS cannot touch.
Through the Federal Payment Levy Program, the IRS can take up to 15 percent of Social Security retirement and survivor benefits.
Social Security Disability Insurance is treated differently. The IRS stopped automatically levying SSDI through the Federal Payment Levy Program in October 2015. Supplemental Security Income is a means-tested public assistance program and is not subject to it.
Retirees often have options, including Currently Not Collectible status, when the benefit is needed for basic living expenses. More on when and how the IRS can levy disability payments and can the IRS take my SSI income.
IRC 6343 requires the IRS to release a levy when any of these apply. They are not favors; they are grounds.
| Ground | What it means in practice |
|---|---|
| The liability is satisfied, or the collection statute expired | Verify the balance and the statute before assuming either |
| The levy is creating an economic hardship | You cannot meet basic, reasonable living expenses. The most common successful argument |
| Release will facilitate collection | Levying your business receivables into insolvency collects less than leaving you operating |
| You enter an installment agreement | Unless the agreement itself provides otherwise |
| The fair market value exceeds the liability, and partial release will not hinder collection | Relevant on property seizures |
In practice, the fastest route to a release is usually getting a resolution in place: an installment agreement, Currently Not Collectible status, or a pending offer in compromise. The IRS releases the levy because the case now has a path, not because anyone was persuaded.
If funds have already transferred, release does not return them. You may file a separate wrongful levy claim or return-of-property request, and both are time-limited.
See how to stop wage garnishment and what to do when the IRS freezes your assets.
Collection Due Process, under IRC 6330. Available on a Final Notice of Intent to Levy, requested on Form 12153 within 30 days. It suspends levy action while pending, lets you propose alternatives, and preserves a right to petition the Tax Court from the determination. If you miss the 30 days, an equivalent hearing remains available, but it neither suspends collection nor preserves Tax Court review.
Collection Appeals Program, requested on Form 9423. Faster, available at more points including after a levy has already been issued, and often the right tool in an emergency. The trade-off is that the decision is final. No Tax Court.
When a levy has already hit, and the money is sitting in the 21-day hold, CAP is often faster. When the notice just arrived, and there is time, CDP preserves more.
A lien is a claim. It secures the debt and attaches to your property. It is a problem when you try to sell, borrow, or refinance.
A levy is a taking. It is a problem on Tuesday, when the account is frozen.
Different notices, different code sections, different appeal rights. Full detail on our tax liens page.
State collection runs on its own track, and a federal resolution does not stop it.
Michigan. The Department of Treasury has its own levy and warrant authority and can reach bank accounts and wages independently of the IRS. Michigan’s state tax lien under MCL 205.29 runs seven years from attachment and can be renewed for another seven, unlike the federal ten-year collection statute. Michigan also operates its own offer in compromise program. See our Michigan tax attorney page, or reach the team through our Lathrup Village office.
Florida. No individual income tax, so state-side enforcement is overwhelmingly sales and use tax, and the Department of Revenue’s instrument is the tax warrant. See our Florida tax attorney page and our Delray Beach office.
| If you are dealing with | Go to |
|---|---|
| A wage levy or garnishment specifically | Wage garnishment |
| A frozen bank account right now | What to do when the IRS freezes your assets |
| A filed tax lien rather than a levy | Tax liens |
| The balance underneath all of it | Back tax help |
| Penalties inflating the balance | Penalty abatement |
| Settling for less than the full amount | Offer in compromise |
| Seizure of physical property | What is an IRS tax seizure |
Some of our staff spent years as former IRS Revenue Officers issuing and releasing these levies. On a live levy, the amount is often more than it sounds, because the question is never what should work. It is what a collections unit will actually approve, and how fast.
Our practice is civil only. Levy & Associates does not represent clients in criminal tax matters of any kind.
I got a CP504 that says “Notice of Intent to Levy.” Is the IRS about to take my bank account?
No, and this is the single most misread notice in IRS collections. The IRS issues a CP504 under IRC 6331(d) and authorizes it to levy your state tax refund. It does not authorize a wage garnishment or a bank levy, and it does not carry Collection Due Process rights. Before the IRS can reach your paycheck or your accounts, it must send a separate notice, the LT11, Letter 1058, or CP90, titled Final Notice of Intent to Levy and Notice of Your Right to a Hearing, and give you 30 days. So a CP504 is serious, and it means enforcement is approaching, but it is not the notice that empties your account.
My bank account was frozen. Is the money gone?
Not yet. When a bank receives a Notice of Levy on Form 668-A, it freezes the amount levied and holds it for 21 days before sending it to the IRS. That holding period exists specifically so errors can be corrected and releases negotiated. During those 21 days, a levy release, a hardship claim, or an installment agreement can stop the transfer. After the funds go, a release will not bring them back, though you may still have a wrongful levy claim or a return-of-property request. If your account was frozen, the 21-day clock is the most important fact in your case.
How much of my paycheck can the IRS take?
There is no percentage, which surprises people who expect something like a 25 percent cap. Your employer applies an exempt amount from IRS Publication 1494, based on your filing status and number of dependents, and everything above that goes to the IRS. For many taxpayers, that is most of the check. You claim the exemption by completing and returning the statement of dependents your employer provides; if you do not return it, the exempt amount defaults to the lowest tier. A wage levy is also continuous under IRC 6331(e), meaning it attaches to every pay period until released rather than happening once.
What can the IRS not take?
IRC 6334 exempts unemployment benefits, certain workers’ compensation and annuity or pension payments, court-ordered child support you are required to pay, a minimum amount of wages per Publication 1494, fuel, provisions, furniture and personal effects up to a statutory value, books and tools of your trade up to a statutory value, undelivered mail, and certain public assistance payments. Your principal residence has a special protection: the IRS cannot seize your main home on its own authority and must obtain a federal court order. Retirement accounts are not on the exempt list, so the IRS can levy a 401(k) or IRA, though internal policy makes that uncommon.
How do I get a levy released?
IRC 6343 requires release on specific grounds: the liability is satisfied, or the collection statute has expired, the levy is causing economic hardship, meaning you cannot meet basic reasonable living expenses, release will facilitate collection, you have entered an installment agreement, or the property value exceeds the liability, and partial release will not hinder collection. In practice, the fastest route is usually getting a resolution in place, because the IRS releases when the case has a path rather than when someone argues well. If the money has already transferred, a release will not recover it; a separate wrongful levy or return-of-property claim is the route.
If your account is frozen, your paycheck is short, or a Final Notice of Intent to Levy is on your desk, the deadlines on this page are running right now. The 21-day bank hold and the 30-day Collection Due Process window decide most cases.
Our team includes attorneys, CPAs, Enrolled Agents, and former IRS Revenue Officers. Our work is civil resolution only. We do not represent clients in criminal tax matters. Call 248-557-4048 for a confidential conversation or contact us online.
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