IRS Levied My Merchant Account – How to Protect Stripe, Square, and Zelle Income
When the IRS Hits Your Merchant Account, It’s a Business Emergency
If your Stripe, Square, Zelle, or other merchant account has been levied by the IRS, your income stream may have just been cut off—and your business may be in serious danger.
Merchant account levies are becoming more common as the IRS expands enforcement against self-employed individuals, freelancers, and small businesses that rely on digital payment platforms.
In this blog, we explain what an IRS merchant levy looks like, how to respond quickly, and how to protect your digital revenue from future seizures.
What Is a Merchant Account Levy?
The IRS has the legal right under IRC §6331 to seize assets—including incoming payments—through any third party holding funds on your behalf.
That includes:
- Stripe
- Square
- Zelle
- Venmo Business
- PayPal
- Clover and other POS systems
Once the IRS issues Form 668-A, your payment processor is required to freeze and remit funds.
Related: IRS Levied My PayPal or Stripe Account – What to Do Next
What Happens When a Merchant Account Is Levied?
You may experience:
- Frozen daily payouts
- Delayed or blocked transfers
- Customers’ payments redirected
- Merchant account closure or restriction
Many platforms don’t notify you right away—so the first sign is usually zero payouts or a sudden notice that your balance is unavailable.
What Triggers This?
Merchant account levies typically follow:
- Unpaid back taxes
- Ignored IRS notices (e.g., CP504, LT11)
- Failure to respond to a Final Notice of Intent to Levy
- The IRS identifying your digital income stream through 1099-K filings
Step-by-Step: What to Do Now
Step 1: Confirm the Source of the Freeze
- Log into your Stripe/Square/Zelle account
- Check for IRS notices or system messages
- Contact customer support for confirmation of levy
Step 2: Call the IRS or Work with a CPA
You (or your representative) must:
- Speak to the IRS officer handling your case
- Request a levy release
- Provide financial documentation to support your request
A CPA can do this without you speaking to the IRS directly.
Step 3: Submit a Financial Disclosure
To negotiate a release, you’ll need to submit:
- Form 433-A or 433-B
- Bank statements
- Merchant account reports
- Expense documentation
If the levy causes financial hardship, the IRS may release it.
Related: IRS Seized My Bank Account – Can I Get the Money Back?
Step 4: Choose a Resolution Path
Common options include:
- Installment Agreement
- Offer in Compromise
- Currently Not Collectible status
- Requesting a CDP or CAP appeal if timing permits
Related: IRS Collection Appeals Program (CAP) vs CDP Hearings – What’s the Difference?
How to Prevent Future Levies on Merchant Accounts
- Resolve the tax debt or enter a payment plan
- Respond to all IRS notices promptly
- Avoid using personal platforms (Venmo, Zelle) for business
- Stay current with estimated payments and filings
- File Form 8821 or 2848 to allow your CPA to monitor your IRS account
We Help California Business Owners Recover from IRS Merchant Account Levies
At Boulanger CPA and Consulting PC, we:
- Respond to Stripe, Square, and Zelle levies immediately
- File for levy release based on hardship or resolution
- Handle IRS negotiations on your behalf
- Protect your digital income from further enforcement
📞 Call (657) 218-5700 or request help at www.orangecounty.cpa
FAQ: IRS Merchant Account Levies
Can the IRS really take money from Stripe or Square?
Yes. These platforms are third-party payers and must comply with IRS levy orders.
Do I get a warning before this happens?
The IRS must send a Final Notice of Intent to Levy—but if ignored, enforcement can happen quickly.
What if I use Zelle for personal and business?
This can create complications. You may need to file documentation proving ownership of funds.
Will the levy stop future deposits too?
Often yes—unless you resolve the debt or request a specific release, ongoing payouts can remain frozen.
📣 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.
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