IRS Levy Defense — Federal and California
Tax Levy Attorney
A tax levy is a legal seizure of your property to satisfy a tax debt. Brotman Law stops active IRS levies, negotiates releases, and resolves the underlying liability so the levy does not return.
What Is a Tax Levy?
A tax levy is the IRS's legal authority to seize your property — bank accounts, wages, accounts receivable, Social Security benefits, or real property — to satisfy an unpaid tax debt. Unlike a tax lien (which is a claim against your property), a levy is an actual taking. The IRS does not need a court order to levy most property types. The authority comes from IRC § 6331. Once a levy is in place, stopping it requires either resolving the underlying liability or establishing an acceptable collection alternative — an installment agreement, an Offer in Compromise, or currently not collectible status.
Call (619) 378-3138 if you are facing an active IRS levy.
A tax levy attorney represents taxpayers who have received levy notices, whose bank accounts have already been seized, or who are receiving reduced paychecks because of an IRS wage levy. The goal is to stop the levy quickly, protect assets that have not yet been taken, and negotiate a resolution that addresses the underlying tax debt so the IRS has no reason to levy again. For a full explanation of how levies work mechanically — the legal authority, the notice requirements, and the types of property the IRS can and cannot seize — see our tax levy guide.
Types of Tax Levies
Not all levies work the same way. The type of levy determines how quickly it takes effect, how much it takes, and what the defense strategy looks like.
| Levy Type | What It Seizes | How It Works |
|---|---|---|
| Bank Account Levy (Continuous Levy) | Funds in checking, savings, or investment accounts | The IRS serves the levy on your bank. The bank freezes funds in the account on the day of service, holds them for 21 days, then sends the seized amount to the IRS. New deposits after the levy date are not captured unless the IRS re-levies. |
| Wage Levy (Ongoing Garnishment) | A portion of each paycheck | The IRS serves the levy on your employer. Unlike a bank levy, a wage levy is continuous — it applies to every paycheck until it is released. The IRS uses an exemption table to calculate the non-exempt amount; the exempt portion is determined by filing status and dependents. Most taxpayers find the exempt amount leaves very little to live on. |
| Accounts Receivable Levy | Money owed to you by customers or clients | The IRS serves the levy on your clients or account debtors. They are legally required to send payments directly to the IRS instead of to you. This can be devastating for businesses operating on receivables. |
| Social Security Levy | 15% of each Social Security benefit payment | The IRS can levy Social Security benefits under IRC § 6331(h). The levy is capped at 15% per payment and is continuous — it applies to every payment until released. |
| Real Property Seizure | Real estate, vehicles, business equipment | The IRS can seize and sell physical property, but this requires additional procedural steps — including a seizure warrant and judicial approval for a primary residence under IRC § 6334(e). Real property seizures are comparatively rare and typically reserved for large liabilities where other collection is unavailing. |
How a Tax Levy Starts: The Notice Sequence
The IRS cannot levy without providing prior notice — but the notice requirements are often misunderstood, and the window to respond is narrow.
The IRS must send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing before levying most types of property. This notice arrives as a CP90 (for individuals) or CP297 (for businesses). It triggers a 30-day window during which you have the right to request a Collection Due Process (CDP) hearing under IRC § 6330. Requesting a CDP hearing within 30 days stops the levy while the hearing is pending.
The IRS also sends earlier balance-due notices — the CP501, CP503, and CP504. The CP504 is a notice of intent to levy on state tax refunds specifically and is sometimes confused with the Final Notice. Only the CP90/CP297 triggers full CDP hearing rights and a levy hold.
If you miss the 30-day CDP window, you still have rights — but they are more limited. You can request an Equivalent Hearing within one year of the Final Notice, but the levy is not automatically stayed while an Equivalent Hearing is pending. You can also pursue a Collection Appeals Program (CAP) request, which is faster but does not provide Tax Court review rights.
Four Ways to Get a Tax Levy Released
A levy can be released in four ways, and the right approach depends on your specific financial situation and the state of the underlying liability.
1. Full payment. Paying the entire tax liability in full requires the IRS to release the levy immediately. Form 668-D (Release of Levy) is issued by the IRS once payment is confirmed. This is rarely the immediate option — if a taxpayer could pay in full, the levy would not have happened — but it is relevant in cases where the seized account held funds earmarked for the tax debt.
2. Installment agreement. Entering into an IRS installment agreement under IRC § 6159 requires the IRS to release any active levy. The IRS will not levy a taxpayer who is in an active, compliant installment agreement. The release is documented with Form 668-D. Getting an installment agreement in place quickly — ideally before the bank's 21-day hold expires — can recover seized bank funds.
3. Offer in Compromise. An accepted Offer in Compromise under IRC § 7122 requires the IRS to release all levies. Submitting an OIC also stops IRS collection activity while the offer is under consideration (though the levy must already be in place — submitting an OIC does not automatically stop a pending levy in all circumstances). For a detailed analysis of OIC qualification, see our Offer in Compromise page.
4. Currently Not Collectible (CNC) status. If the taxpayer can demonstrate that their allowable living expenses (using IRS Collection Financial Standards) consume all their income, the IRS can place the account in Currently Not Collectible status. While CNC does not resolve the underlying liability, it stops all collection activity — including levies — for as long as the status is in place. The IRS reviews CNC accounts periodically and can resume collection if the taxpayer's financial situation improves.
CDP Hearing Strategy: More Than a Delay Tactic
A Collection Due Process hearing under IRC § 6330 is often described as a way to delay a levy. The short version is that it is much more than that.
In a CDP hearing, the Office of Appeals reviews the IRS's proposed collection action. You can challenge the appropriateness of the levy, propose a collection alternative (installment agreement, OIC, CNC), and — importantly — you can challenge the underlying tax liability itself if you did not have a prior opportunity to contest it. This is the one instance where the IRS's administrative process allows you to dispute an assessment that is otherwise past its normal challenge deadline.
If the IRS Appeals Office rules against you in a CDP hearing, you have 30 days to petition the U.S. Tax Court for judicial review. The levy remains stayed while Tax Court proceedings are pending. This creates meaningful leverage in cases where the underlying liability is genuinely disputed.
For specific guidance on wage levy defense, including the exemption calculation and employer procedures, see our wage levy page.
California State Levies: FTB and EDD
California's Franchise Tax Board and Employment Development Department have their own independent levy authority and their own notice requirements — which differ from the IRS's in important ways.
The FTB can levy bank accounts, wages, and other property to satisfy California income tax debts. The FTB's pre-levy notice process involves a Notice of State Tax Lien and a Final Notice Before Seizure. The FTB's levy is served directly on banks and employers and operates on a similar 21-day hold period for bank accounts. Unlike the IRS, the FTB does not have a CDP-equivalent hearing right — California taxpayers can appeal FTB collection actions through the Office of Tax Appeals, but the process and timing are different.
EDD can levy to collect unpaid unemployment insurance taxes, SDI contributions, and related penalties. Businesses with unresolved EDD audit assessments are at risk of EDD bank levies and wage orders, which can run simultaneously with IRS payroll tax collection.
We represent clients in simultaneous federal and state levy situations — which are common in payroll tax cases and in California income tax matters that have parallel IRS and FTB components. Consolidating the defense and negotiating with both agencies toward a unified resolution is substantially more efficient than handling the two proceedings separately.
Representative Matters
Each matter is different, and past results do not guarantee any particular outcome.
A self-employed contractor woke up to find his business checking account levied for $180,000 — funds he needed to meet payroll and pay subcontractors. We filed an emergency CDP hearing request the same day, contacted the Revenue Officer directly, and negotiated a levy release pending installment agreement terms. The bank funds were released before the 21-day hold expired. The underlying liability was resolved through a 60-month installment agreement at an amount the business could sustain.
A medical practice received notice that the IRS had served an accounts receivable levy on its billing company, capturing all outstanding patient payments. The practice was facing a cash flow crisis within two payment cycles. We negotiated an interim agreement with the Revenue Officer to defer the levy pending a full financial analysis, submitted a Form 433-B (Collection Information Statement) demonstrating the practice's viability and inability to pay in full, and converted the accounts receivable levy into a 72-month installment agreement before the next payment run.
A construction company owner faced a simultaneous IRS wage levy and a California FTB bank levy arising from related income tax liabilities. Each agency was pursuing collection independently, and together the levies were taking more than 80% of available cash flow. We filed CDP hearing requests with the IRS, requested a collection hold from the FTB pending a financial review, and ultimately negotiated a single installment agreement with the IRS and a separate FTB installment agreement with coordinated payment schedules that the business could actually sustain.
Related Services
About Sam Brotman
Sam Brotman is a tax attorney with over 15 years of experience representing individuals and businesses in IRS and California tax collection proceedings. He holds a J.D., an LL.M. in Taxation, and an MBA, and is admitted to practice before the U.S. Tax Court. His levy defense practice covers the full range of IRS collection enforcement — from initial CDP hearing requests through Tax Court litigation — as well as California FTB and EDD collection actions.
If you have received a Notice of Intent to Levy or your bank account has already been seized, the 30-day CDP window and the 21-day bank hold are both running. Schedule a consultation to understand exactly where you stand and what your options are.
Frequently Asked Questions About Tax Levy Defense
What is a tax levy attorney?
How quickly can a tax levy be stopped?
What is the difference between a tax levy and a tax lien?
Can the IRS levy my Social Security benefits?
Do I need an attorney to release an IRS levy?
IRS Levy Defense — Federal and California
A Levy Is Solvable
Most levy situations have a workable resolution — it is a matter of identifying the right one for your financial circumstances and moving on it before the IRS's timelines close off options. We can assess your situation in 15 minutes and tell you plainly what the path looks like.
- Free 15-minute intro call — a clear answer on your options, not a sales pitch
- IRS and California FTB/EDD levies handled together
- Completely confidential — attorney-client privilege from the first call