IRS Seized My Bank Account – Can I Get the Money Back
Your Money’s Gone—But Not All Hope Is Lost
If you woke up to a frozen bank account or saw that the IRS took thousands of dollars from your checking or business account, you're not alone.
Bank levies are one of the most aggressive collection tactics the IRS uses—and once the funds are gone, getting them back isn’t easy… but it can be done in certain situations.
This post explains when and how the IRS seizes bank funds, whether you can recover the money, and what steps to take next to protect yourself.
What Is a Bank Levy?
A bank levy occurs when the IRS sends Form 668-A to your bank, ordering them to freeze your account and remit the funds to cover unpaid tax debt.
Key facts:
- The account is frozen on the day the bank receives the levy
- You have 21 days before the bank sends the money to the IRS
- After 21 days, the IRS receives the funds and applies them to your balance
If you’re facing an IRS bank account levy in California, it’s critical to act immediately—waiting even a few days can cost you the chance to recover your funds.
Can You Get the Money Back?
✅ Yes—in limited circumstances.
You may be able to recover funds if you act before the 21-day window closes, or even after, if you qualify for one of the following:
1. Financial Hardship
If the levy caused a financial crisis (e.g., rent unpaid, payroll missed, utilities disconnected), the IRS may agree to reverse the levy and return the funds.
2. IRS Error
If the IRS levied:
- Without sending a Final Notice of Intent to Levy
- After the statute of limitations expired
- Without honoring an active payment plan or appeal
…you may be eligible for reversal.
This is also where questions like can you stop an IRS levy after it starts become important. Sometimes, even after collection begins, relief is still possible.
3. Improper Account
If the levy pulled funds from an account not owned by you (e.g., a business partner or spouse), you may be able to file a claim to recover those funds.
What to Do If You Want Your Money Back
Step 1: Act Before the 21 Days Expire
If the money hasn’t been transferred yet:
- Call the IRS immediately
- Request a hold or levy release
- Submit Form 433-A to demonstrate hardship
- Propose an Installment Agreement or Offer in Compromise
Step 2: If the Funds Are Already Gone
File a:
- Request for Return of Wrongfully Levied Property under IRC §6343
- CAP appeal or Taxpayer Advocate request
- Civil claim under limited circumstances, especially if IRS protocol wasn’t followed
Can You Sue the IRS?
Sometimes—under IRC §7433, if:
- The levy violated your rights
- The IRS ignored proper procedures
- You suffered documented damages
You must exhaust all administrative remedies first (CAP appeal, Advocate request, etc.).
We Help Orange County Taxpayers Recover After IRS Levies
At Boulanger CPA and Consulting PC, we:
- Respond fast to IRS bank levies
- File hardship-based release requests
- Pursue levy reversal when possible
- Resolve the underlying tax debt to prevent future seizures
We also encourage taxpayers to explore more in Defend What’s Yours—because protecting your income and assets is about more than just one levy.
Call (657) 218-5700 or schedule emergency help at www.orangecounty.cpa
Frequently Asked Questions
Can I get money back after an IRS bank levy?
Sometimes. If you can prove the levy caused undue hardship or was issued in error, you may request a return of seized funds. Otherwise, the levy generally stands once money is transferred to the IRS.
How long do I have before the bank sends the money to the IRS?
Banks are required to hold levied funds for 21 days before remitting them. This gives you a brief window to resolve the issue or request a release.
What if the money belonged to someone else in a joint account?
If your account is joint, the co-owner can claim their portion by showing proof to the IRS. However, the levy initially freezes all funds in the account.
Does bankruptcy stop an IRS bank levy?
Yes. Filing bankruptcy triggers an automatic stay, which halts IRS collection actions, including bank levies, though not all tax debts are dischargeable.
Can I stop future IRS bank levies?
Yes. By negotiating an installment agreement, submitting an Offer in Compromise, or qualifying for Currently Not Collectible status, you can prevent future levies.
Does California also issue bank levies?
Yes. The California Franchise Tax Board (FTB) and Employment Development Department (EDD) can issue bank levies independently of the IRS.
Should I get professional help if my account is levied?
Yes. A tax professional can quickly negotiate with the IRS, request a release, and help prevent future levies or seizures.
📣 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.
Marc The CPA's Tax Blog
