IRS Levied My Business – What Are My Rights and Options?

When the IRS Comes After Your Business, You Must Respond Fast

If the IRS levied your business—freezing accounts, seizing receivables, or threatening to shut you down—you’re likely overwhelmed and scrambling for answers.

The good news is: you have rights, and there are ways to reverse or stop further enforcement.

This blog explains what a business IRS levy looks like, what you can do to recover, and how to protect your business from permanent damage.

What Does It Mean When the IRS Levies a Business?

An IRS levy is a legal seizure of assets to satisfy a tax debt. For businesses, this may include:

• Bank account levies (freezing operating accounts)
• Accounts receivable seizures (IRS contacts your customers to redirect payment)
• Equipment seizure or property sale (rare, but possible)
• Cash register or merchant account levies

Once levied, funds can be removed permanently after the 21-day hold (for bank levies) or diverted immediately (in the case of receivables).

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

Why Is the IRS Targeting Your Business?

Common reasons include:

• Unpaid 941 payroll taxes
• Prior missed deadlines or ignored notices
• No formal resolution or payment plan
• Repeated noncompliance or missing returns

If you owe back payroll taxes, the IRS views that as a high-priority case—and enforcement will escalate quickly.

Related: IRS Trust Fund Recovery Penalty – What Business Owners Need to Know

What Rights Do You Have After a Business Levy?

You may be able to:

• Request a levy release if the business can’t operate without the funds
• File a Collection Due Process (CDP) appeal (Form 12153) if timely
• Apply for Currently Not Collectible status
• Enter an Installment Agreement or Offer in Compromise

You also have the right to:

• Representation (you don’t have to deal with the IRS alone)
• Appeal a wrongful levy under IRC §6343
• Protect funds needed for employee wages, rent, or operations

Step-by-Step: What to Do If the IRS Levied Your Business

Step 1: Identify the Type of Levy

Is it a one-time bank levy? Ongoing garnishment of receivables? Know where the enforcement hit and how it was triggered.

Step 2: Gather Financials

You’ll need:

• IRS Form 433-B (Collection Information Statement for Businesses)
• Profit/loss statements
• Payroll summaries
• Operating expenses
• Past IRS correspondence

Step 3: Contact the IRS or Have a CPA Do It

An experienced tax professional can:

• Request a release or hold
• Negotiate on your behalf
• Protect you from further enforcement

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

✅ Step 4: Resolve the Underlying Debt

The levy is a symptom—the debt is the disease. Consider:

• Short-term payment plans
• Partial pay installment agreements
• Settlement through Offer in Compromise
• Reinstating compliance with 941 filings

We Help California Business Owners Respond to IRS Levies

At Boulanger CPA and Consulting PC, we help businesses across California:

• Stop IRS levy actions
• Reopen frozen accounts
• Submit hardship-based release requests
• Prevent TFRP assessments against owners and officers

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

FAQ: IRS Business Levies

Q: Can the IRS really take my business bank account funds?
A: Yes. They can levy operating accounts if tax debt is unresolved.

Q: Can I get the money back?
A: Possibly—especially if the levy jeopardized payroll, rent, or essential operations.

Q: Will they contact my customers?
A: Yes. If the IRS levies your receivables, they may send notices to customers instructing payment to the IRS instead of you.

Q: Can I stop future levies?
A: Yes—by entering a resolution plan and bringing your business into compliance.

📣 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.