How to Avoid IRS Levies in the First Place – Proactive Strategies That Work
Don't Wait for the IRS to Strike—Here’s How to Stay Ahead
An IRS levy is one of the most aggressive collection tools the government can use. It allows the IRS to legally seize your wages, freeze your bank accounts, and even take business assets.
But what most taxpayers don’t realize is that levies don’t come out of nowhere. There’s a trail of notices, missed deadlines, and warning signs that happen first—and if you act in time, you can stop it all before the damage is done.
This blog outlines proactive strategies to avoid IRS levies altogether and keep your income and property protected.
What Is an IRS Levy?
An IRS levy is a legal seizure of your property or money to satisfy a tax debt. It can take many forms:
- Wage garnishment
- Bank account levies
- Accounts receivable seizures (for businesses)
- Real estate seizures (in rare cases)
It’s different from a lien. A lien is a claim. A levy is actual enforcement. Many taxpayers confuse the two, but knowing the IRS levy vs lien differences is crucial to understanding your situation.
Related: IRS Levy vs IRS Lien – What’s the Difference?
How Do IRS Levies Start?
Here’s the typical progression:
- IRS assesses a balance
- You receive a series of notices (CP14, CP501, CP503)
- The IRS sends a IRS notice of intent to levy (Letter 1058 or LT11)
- If no action is taken within 30 days, enforcement begins
At this stage, if an IRS lien filed against you has also occurred, your credit and assets could already be at risk.
Related: IRS Notice of Intent to Levy – Urgent Steps to Take
Proactive Strategy #1: Stay in Compliance—Even If You Can’t Pay
File all required tax returns on time, even if you can’t pay in full. Why?
- It prevents additional failure-to-file penalties
- It shows good faith to the IRS
- It keeps you eligible for resolution programs
If you’re behind, start with: Facing Back Taxes? Here’s How Orange County Residents Can Get Relief
Proactive Strategy #2: Respond to IRS Notices Quickly
Do not ignore letters from the IRS. Early notices (like CP14 or CP501) are warnings—not enforcement. Responding early gives you options like:
- Short-term holds
- Payment plan setup
- Reasonable cause relief
- CDP hearing requests
Bonus: If you use direct debit and owe under $25K, you may qualify for releasing an IRS lien after settlement.
Proactive Strategy #3: Set Up an Installment Agreement
Entering into an Installment Agreement before levy action is key.
- Settling tax debt through an Offer in Compromise – Settle for less based on ability to pay
- Pausing collections with Currently Not Collectible status – Pause enforcement due to hardship
Bonus: If you use direct debit and owe under $25K, you may qualify for lien withdrawal too.
Proactive Strategy #4: Submit an Offer in Compromise or CNC Request
If you can’t afford to pay your full balance, consider:
- Offer in Compromise – Settle for less based on ability to pay
- Currently Not Collectible – Pause enforcement due to hardship
The IRS cannot levy while an OIC or CNC request is under review.
Proactive Strategy #5: Request a CDP Hearing Before the 30-Day Deadline
If you’ve received Letter 1058 or LT11, you can file Form 12153 – Request for a Collection Due Process (CDP) Hearing within 30 days.
Doing so will:
- Pause levy action
- Allow for appeal and negotiation
- Preserve your rights to Tax Court
Related: IRS Collection Appeals Program (CAP) vs CDP Hearings – What’s the Difference?
We Help Orange County Taxpayers Avoid IRS Levies Before They Start
At Boulanger CPA and Consulting PC, we:
- Monitor IRS transcripts for levy risk
- Respond to levy notices immediately
- File appeals and requests for hold
- Negotiate affordable resolutions
We also provide clear guidance so you can learn more in Defend What’s Yours, our resource for protecting income and property from IRS collection.
Call (657) 218-5700 or book a proactive consultation at www.orangecounty.cpa
Frequently Asked Questions
What triggers an IRS levy?
An IRS levy occurs when you have unpaid tax debt, ignored notices, and failed to resolve your balance through payment arrangements or appeals.
Can I prevent a levy after receiving a Final Notice of Intent to Levy?
Yes. You generally have 30 days to request a hearing, set up a payment plan, or show financial hardship before levy action begins.
What is the best way to avoid an IRS levy?
Staying current with tax filings, making timely payments, and responding quickly to IRS notices are the best ways to avoid enforcement.
Do installment agreements prevent levies?
Yes. Once an installment agreement is in place and you stay compliant, the IRS will not proceed with levy actions.
Can an Offer in Compromise help me avoid a levy?
Yes. If accepted, an Offer in Compromise settles your debt for less and stops enforced collection while the offer is pending.
What if I can’t afford any payments?
You may qualify for Currently Not Collectible status, which suspends collection and prevents levies while you’re in financial hardship.
Can levies be avoided in payroll tax cases?
Yes, but payroll tax cases are high priority for the IRS. Prompt resolution and professional representation are essential to prevent levies against business accounts.
Do California agencies issue levies too?
Yes. The California Franchise Tax Board (FTB) and Employment Development Department (EDD) issue levies similar to the IRS if state taxes are unpaid.
📣 About the Author
Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.
He is the author of Defend What’s Yours: A California Taxpayer’s Guide to Beating the IRS and FTB at Their Own Game, available now on Amazon. The book offers a step-by-step plan for resolving IRS and FTB tax debt without losing your business, your home, or your peace of mind.
With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.
Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.
Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.
📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.
Order the book on Amazon: Defend What’s Yours
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