Stop IRS Wage Garnishment or Bank Levy

How we help stop a garnishment or levy

1

Free 30-minute consultation

Tell us what you received: a CP504, an LT11 or Letter 1058, or a levy your employer or bank has already processed. We review the notice, the dates and your balance. Then we tell you plainly which options may fit.

2

We get authorized and pull your records

You sign IRS Form 2848. That lets our Enrolled Agent speak with the IRS about your account, pull your transcripts and request a levy release where the facts support one.

3

We work toward a lasting resolution

A release alone doesn't settle the balance, and the IRS can levy again. So we pursue the option that fits your finances: a payment plan, Currently Not Collectible status, an Offer in Compromise, or a Collection Due Process hearing.

What to do in the next 48 hours

Find the notice and note its date. Look for the notice number in the corner (CP504, LT11, Letter 1058) or the levy form your employer or bank received (Form 668-W for wages, Form 668-A for bank accounts). Your deadlines run from those dates.
Wage levy: return your employer's statement within 3 days. Your employer will give you a Statement of Dependents and Filing Status. If you don't return it within three days, your exempt amount is figured as married filing separately with zero dependents. (IRS)
Bank levy: note the 21-day window. Funds in the account are frozen as of when the bank receives the levy. The bank holds them for 21 days before sending them to the IRS. Money you deposit after the levy date is normally not affected. (IRS)
Check the 30-day hearing date. If you received an LT11 or Letter 1058, you have 30 days from receipt to request a Collection Due Process hearing on Form 12153. (IRS)
Gather a simple financial picture. Have your recent pay stubs, bank statements, rent or mortgage, and other monthly bills ready. The IRS usually needs this to consider a hardship release or a payment plan. (IRS)
Check for unfiled returns. Most options require your required returns to be filed. Read our guide to unfiled tax returns.
Call the number on your notice, or have us call. Contacting the IRS doesn't extend the 30-day hearing deadline. Your written request still has to go in on time. (IRS Pub. 1660)

CP504, LT11 or Letter 1058: how the IRS gets to a levy

The IRS usually levies only after it has assessed the tax and sent a bill, you haven't paid, and it has sent a final notice at least 30 days before the levy. (IRS, What is a levy?)

Step	What you receive	What it means
1	Notice and Demand for Payment (your tax bill) and reminder notices	The IRS has assessed the tax and is asking for payment. (IRS)
2	CP504, Notice of Intent to Levy	The IRS intends to levy under IRC § 6331(d) and can take your state tax refund. It can't levy wages or bank accounts on this notice alone. (CP504, CDP FAQs)
3	LT11 or Letter 1058, Final Notice of Intent to Levy and Notice of Your Right to a Hearing	You have 30 days from receipt to request a Collection Due Process hearing. With limited exceptions, the IRS can't levy during those 30 days or while a timely hearing is pending. (LT11, Pub. 1660)
4a	Wage levy (Form 668-W)	Your employer sends part of each paycheck to the IRS until the levy is released, the balance is paid, or other arrangements are made. Part of your wages is exempt. (IRS)
4b	Bank levy (Form 668-A)	Funds are frozen and held 21 days before the bank sends them to the IRS. The waiting period gives you time to contact the IRS and arrange payment or report errors. (IRS)

More detail: IRS bank levy: what to do in the first 21 days

California FTB wage garnishment or bank levy

If the California Franchise Tax Board (FTB) is collecting, not the IRS, different rules and forms apply.

FTB wage garnishment. The FTB issues an Earnings Withholding Order for Taxes (EWOT, FTB 2905). Your employer must withhold part of each paycheck until the balance is paid in full or the FTB releases the order. A personal income tax garnishment can take up to 25% of your pay. Individuals can log in to MyFTB to check whether they may request a lower withholding amount. (FTB: Wage garnishments for taxes · FTB: Help with withholding orders)
FTB bank levy. An Order to Withhold for Taxes (FTB 2900) can take 100% of the available funds in your account or the entire balance due, whichever is less. A Continuous Order to Withhold (FTB 2910) attaches to payments owed to you for 12 months. (FTB: Withholding orders)
Options with the FTB. The FTB says paying in full is the most effective way to stop a garnishment or levy. If you can't, it offers a payment plan and an offer in compromise (FTB: If you cannot pay). The FTB may modify a garnishment or levy for financial hardship (call the number on your letter), but it can't reduce the balance due. If you think a levy was issued in error, call the number on the order. If the FTB caused the error, you can ask in writing, within 90 days of the notice date, to be reimbursed for the charges.
Federal rules don't carry over. The 21-day bank hold and Collection Due Process hearing described above are IRS rules. Follow the instructions and deadlines on your FTB order.

More detail: FTB wage garnishment in California.

Options you may qualify for

Which option fits depends on your income, expenses, assets and filing history. We check each one against the IRS's own rules before we recommend anything.

Levy release

The IRS is required to release a levy if, among other reasons, you paid the balance, the collection period ended before the levy, you enter an installment agreement whose terms don't allow the levy to continue, or the levy creates an economic hardship. Economic hardship means it prevents you from meeting basic, reasonable living expenses. For a wage levy causing immediate economic hardship, the release is required. For a bank levy, it may be granted. A release doesn't settle the balance. Arrangements are still needed, or a levy may be reissued. Sources: How do I get a levy released? · What if a levy is causing a hardship?

Installment agreement (payment plan)

A payment plan lets you pay over time. While a payment plan request is pending, the IRS is generally prohibited from levying, with certain exceptions. Individuals who owe $50,000 or less in combined tax, penalties and interest, and have filed all required returns, may be able to apply online. Setup fees and accrued interest apply. See our guide to IRS payment plan options. Sources: IRS payment plans · Online Payment Agreement

Currently Not Collectible (CNC) status

If you can't pay because of financial hardship, the IRS may temporarily suspend most collection activity. You still owe the full balance. Penalties and interest keep accruing, the IRS may review your finances later, and it may apply future refunds to the debt. The IRS usually asks for a collection information statement such as Form 433-F. Source: IRS, Temporarily delay the collection process

Offer in Compromise (OIC)

An OIC may let you settle for less than the full amount if you can't pay in full or doing so would cause financial hardship. The IRS looks at your income, expenses and asset equity. It generally won't accept an offer if you can pay in full through a payment plan or asset equity. To be eligible, you need to have filed all required returns and not be in an open bankruptcy. The application fee is $205 (waived for low-income individuals). You can check eligibility first with the IRS Offer in Compromise Pre-Qualifier. One recent TRP client reached an Offer in Compromise result of more than $215,000. Results vary. Read who may qualify for an OIC. Source: IRS, Offer in Compromise

Collection Due Process (CDP) hearing

After an LT11 or Letter 1058, you can ask the IRS Independent Office of Appeals for a hearing within 30 days, using Form 12153. You can propose a payment plan or an offer, or raise hardship. A timely request generally stops levy action for those periods while the hearing is pending, and you can take the result to the U.S. Tax Court. Miss the 30 days and you can still request an "equivalent hearing" within one year of the levy notice. That hearing doesn't stop a levy, and its decision can't be taken to court. Sources: CDP FAQs · Publication 1660 · Form 12153

Who will work on your case

Raman Zoobalan, EA, Co-Founder and Partner. Over 25 years in accounting and tax resolution. Enrolled Agents are federally authorized to deal with the IRS on a taxpayer's behalf. (IRS, Enrolled Agents)
Shawn Zali, Co-Founder. Spent more than 7 years at the CDTFA (California Department of Tax and Fee Administration) auditing businesses, before switching to the taxpayer's side.
A team of Enrolled Agents, CPAs and former state auditors, based in Irvine and working with individuals and businesses in all 50 states.
Proof: ★ 4.3 Google rating · 1,200+ clients helped · $68M+ recovered · BBB Accredited Business · 2021 BBB Torch Award

More about our team: About Tax Resolution Plus · Our tax resolution services.

Questions about wage garnishments and bank levies

How do I stop an IRS wage garnishment?

Contact the IRS at the number on the levy and either resolve the balance or ask for a release. The IRS must release a wage levy that creates an immediate economic hardship. It must also release one when you enter an installment agreement whose terms don't allow the levy to continue. Have your pay stubs and monthly expenses ready.

How long does a bank hold money after an IRS levy?

21 days. The bank freezes the funds in the account as of the date and time it receives the levy. It holds them for 21 days before sending them to the IRS, so you have time to contact the IRS and arrange payment or point out an error. Deposits made after the levy date are normally not affected.

Can the IRS levy my wages or bank account without warning?

Usually not. The IRS normally levies only after it has sent a bill, you haven't paid, and it has sent a Final Notice of Intent to Levy and Notice of Your Right to a Hearing (LT11 or Letter 1058) at least 30 days before the levy. A CP504 alone isn't enough to levy wages or bank accounts, though the IRS can take a state tax refund.

What is a Collection Due Process hearing, and when do I have to ask for one?

It's a hearing with the IRS Independent Office of Appeals where you can propose a payment plan or an offer, or raise hardship. You must request it on Form 12153 within 30 days of receiving an LT11 or Letter 1058. A timely request generally stops levy action while the hearing is pending.

If my levy is released, do I still owe the IRS?

Yes. A levy release stops that levy but doesn't settle the balance. You still need a payment plan, Currently Not Collectible status, an Offer in Compromise or another arrangement. Otherwise the IRS may issue a new levy. We help you pick the option that fits your finances.

How do I stop an FTB wage garnishment or bank levy in California?

The FTB says the most effective way is to pay the balance in full. If you can't, ask about an FTB payment plan or offer in compromise, or call the number on your order to request a financial hardship modification. An FTB wage garnishment can take up to 25% of your pay, and a bank Order to Withhold can take all available funds up to the balance due.

See more answers on our tax relief FAQs page.

Stop an IRS Wage Garnishment or Bank Levy