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 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

In some cases, taxpayers first experience an IRS bank account levy in California or report that IRS seized my bank account, showing that the agency doesn’t limit its reach to just merchant accounts.

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. For example, people often ask can you stop an IRS levy after it starts—the answer is yes, but only with the right financial documentation and resolution plan.

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

If wages are being targeted instead of merchant accounts, you may face IRS wage garnishment enforcement, which works similarly to a levy but directly affects your paycheck.

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

If you’re facing merchant account or bank account levies, you can learn more in Defend What’s Yours to understand your rights and solutions.

📞 Call (657) 218-5700 or request help at www.orangecounty.cpa

📣 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.