IRS Bank Account Levy in California – What to Do When Your Funds Are Frozen

The IRS Just Seized Your Bank Account—Here’s What to Do Right Now

If your bank account was suddenly frozen and you found out the IRS issued a levy, you’re not alone—and you still have options.

A bank levy is one of the most aggressive collection actions the IRS can take. If you live or operate a business in California and just received a notice of levy or your funds are frozen, the clock is ticking. You have a narrow window to act before the money is transferred out of your account.

This blog explains how IRS bank levies work in California, what triggers them, and most importantly—how to stop or reverse them.

What Is an IRS Bank Levy?

An IRS bank levy is a legal action where the IRS instructs your bank to freeze and eventually send your funds to satisfy unpaid tax debt.

Here’s what happens:

• Your bank freezes the account the day the IRS levy is received (Form 668-A)
• You cannot access the funds during the freeze period
• After 21 days, the money is automatically sent to the IRS
• You may still owe more afterward

Related: IRS Levy vs IRS Lien – What’s the Difference?

Why Did This Happen?

IRS bank levies are typically triggered when you:

• Owe a tax debt
• Ignore multiple IRS notices (CP14, CP504)
• Receive and ignore Letter 1058 or LT11 – Final Notice of Intent to Levy

If you took no action within the 30-day warning period, the IRS moved forward with enforcement.

Related: IRS Notice of Intent to Levy – Urgent Steps to Take

Step-by-Step: What to Do Now

Step 1: Call the Bank and Get the Freeze Date

You need to know exactly when the 21-day clock started. This is your window to act before the funds are released.

Step 2: Contact the IRS Immediately

If you act quickly, the IRS may agree to:

• Release the levy voluntarily
• Pause the action while you enter a payment plan
• Accept an Offer in Compromise or Currently Not Collectible request

Don’t wait for a mailed response—call or have a representative contact the revenue officer or collections division directly.

Step 3: File a CDP Request (If You’re Still Within the Window)

If you’re within 30 days of receiving the Final Notice of Intent to Levy, file Form 12153 – Request for a Collection Due Process Hearing.

This halts collections and gives you the chance to present alternative resolutions.

Related: IRS Collection Appeals Program (CAP) vs. CDP Hearings – What’s the Difference?

Step 4: Prove Financial Hardship

If the levy has caused:

• Inability to pay rent or mortgage
• Missed payroll
• Loss of basic living expenses

…you may qualify for an immediate hardship release. You'll need to complete Form 433-A or 433-B with supporting documents.

Related: How to Stop IRS Wage Garnishment in California

What Happens After the 21 Days?

If you don’t act in time, the bank will:

• Send the frozen funds to the IRS
• Unfreeze the account, but the money is gone
• Leave the levy in place for future enforcement

At that point, your best move is to resolve the remaining debt before another levy hits.

We Help California Taxpayers Stop IRS Bank Levies

At Boulanger CPA and Consulting PC, we:

• Respond immediately to bank levy notices
• Request emergency levy releases
• File appeals and CDP requests
• Help you settle the underlying tax debt

Call (657) 218-5700 or request emergency assistance at
www.orangecounty.cpa

FAQ: IRS Bank Levies in California

Q: Can I still get my money back after a levy?
A: Possibly—if you act before the 21-day window expires or prove the levy caused hardship.

Q: Will the IRS levy my account again?
A: Yes, unless you resolve the debt or enter a resolution. Multiple levies are common.

Q: Can they levy my business account?
A: Yes. Business accounts and personal accounts are both at risk.

Q: Can I stop a levy even if I owe a large balance?
A: Yes—with the right legal or financial approach, most levies can be paused or released.

📣 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.