How to Remove a Bank Levy or Wage Levy

The first step towards removal of any bank or wage levy is to determine which taxing agency issued the tax levy. It is often the case that Internal Revenue Service (IRS), Franchise Tax Board (FTB), Employment Development Department (EDD) or California Department of Tax and Fee Administration (CDTFA) issued a concurrent tax levy. Most banks and employers will give you a notice that they received a levy on your account and upon your request they can provide you with a copy of the tax levy.

Navigating Tax Levies: A Comprehensive Guide to Removing Bank Account and Wage Levies

Tax levies can be a daunting challenge for individuals and businesses alike, seizing funds from bank accounts or garnishing wages to satisfy unpaid tax debts. Whether issued by the Internal Revenue Service (IRS), California’s Franchise Tax Board (FTB), Employment Development Department (EDD), or California Department of Tax and Fee Administration (CDTFA), a tax levy demands swift and informed action. At Tax Lawyers Group, APC, we specialize in guiding clients through the complex process of removing bank account and wage levies, restoring financial stability, and protecting your assets. Our tax attorneys can help you identify, address, and resolve tax levies, empowering you to take control of your financial future.

Understanding Tax Levies: What You Need to Know

A tax levy is a legal action taken by a taxing authority like IRS, CDTFA, FTB or EDD to collect unpaid taxes by seizing funds from your bank account or garnishing a portion of your wages. Unlike a tax lien, which is a claim against your property, a tax levy involves the direct appropriation of your assets. Tax levies can disrupt your financial life, freezing bank accounts or reducing your take-home pay, making it essential to act quickly.

Tax levies may originate from various agencies, including:

• Internal Revenue Service (IRS): Targets federal income tax debts.
• Franchise Tax Board (FTB): Addresses California state income tax liabilities.
• Employment Development Department (EDD): Focuses on payroll tax obligations.
• California Department of Tax and Fee Administration (CDTFA): Collects unpaid sales, use, or other business-related taxes.

In some cases, multiple agencies may issue concurrent levies, compounding the financial strain. Understanding the source of the levy is the first step toward resolution.

Step 1: Identify the Issuing Tax Agency

The foundation of resolving a tax levy lies in determining which taxing agency issued it. Each agency has distinct procedures, deadlines, and requirements for resolving tax levies, making accurate identification critical. To identify the issuing agency:

• Review the levy notice: Banks and employers are required to notify you when a levy is placed on your account or wages. This notice typically includes details about the taxing agency and the amount owed.
• Request a copy of the tax levy: If the notice lacks sufficient detail, contact your bank or employer and request a copy of the levy document. This document will specify the agency, the tax type (e.g., income, payroll, or sales tax), and the outstanding balance.
• Check for multiple tax levies: In cases of concurrent levies from multiple agencies (e.g., IRS and FTB), prioritize addressing each levy separately, as resolution strategies may differ.

If you’re unsure about the tax levy’s origin or receive conflicting information, our experienced Long Beach tax attorneys can assist in contacting the relevant tax agencies and clarifying the situation.

Step 2: Assess Your Tax Debt and Levy Details

Once the issuing agency is identified, gather comprehensive information about the tax debt and levy:

• Verify the tax debt amount: Ensure the levied amount aligns with your tax records. Errors in calculations or penalties can sometimes inflate the balance.
• Review the tax levy’s scope: For bank levies, funds are typically frozen up to the amount owed, while wage levies may garnish a percentage of your income (e.g., up to 25% for IRS levies, depending on exemptions).
• Check for compliance issues: Tax Levies often result from unfiled tax returns, ignored notices, or failure to respond to agency demands. Addressing these underlying issues is crucial for resolution.

Our tax lawyers can conduct a thorough review of your tax account, identifying discrepancies and ensuring the tax levy is valid and accurate.

Step 3: Explore Levy Removal Options

Removing a tax levy requires strategic negotiation with the taxing agency. Common approaches include:

• Full Payment: Paying the tax debt in full is the fastest way to release a levy. If funds are available, our team can negotiate to ensure the payment is properly applied and the levy is lifted promptly.
• Tax Bankruptcy: Tax Bankruptcy filing will result in immediate release of all tax levies as well as eliminating all tax debts based on the filing status.
• Installment Agreement: If full payment isn’t feasible, an installment agreement allows you to pay the debt over time. The IRS, FTB, EDD, and CDTFA often approve such plans if you demonstrate financial hardship or inability to pay in full.
• Offer in Compromise (OIC): An OIC allows you to settle the debt for less than the full amount if you can prove that paying the full balance would cause significant financial hardship. This option requires detailed financial documentation and agency approval.
• Hardship Status: If you’re experiencing economic hardship (e.g., inability to pay for basic living expenses), you may qualify for a temporary levy release or “Currently Not Collectible” status, pausing collection actions.
• Release Due to Errors: If the levy was issued in error (e.g., mistaken identity or incorrect debt amount), our attorneys can file an appeal or request an immediate release.

Each option requires careful preparation, including submitting financial statements, tax returns, and supporting documentation. Our team at Tax Lawyers Group, APC., excels in crafting compelling requests to secure all ta levy releases. Our tax attorneys can expedite release of any tax levies through direct contacts within IRS, CDTFA, FTB and EDD.

Step 4: Act Quickly to Prevent Further Damage

Time is critical when addressing a tax levy. For bank levies, funds are typically frozen for 21 days (for IRS levies) before being transferred to the agency, providing a narrow window to negotiate a release. Wage levies, meanwhile, can continue indefinitely until the debt is resolved or an agreement is reached. To minimize disruption:

• Contact the taxing agency immediately: Use the contact information on the levy notice to discuss your options.
• Engage professional help: Navigating agency procedures and deadlines can be overwhelming. Our tax attorneys can expedite the process, ensuring compliance and maximizing your chances of a favorable outcome.
• File any unfiled tax returns: Unfiled returns often trigger levies, and submitting them can open the door to resolution options.

Step 5: Prevent Future Levies

Once the levy is resolved, take proactive steps to avoid future levies:

• Stay compliant: File all tax returns on time and pay taxes owed promptly.
• Monitor notices: Respond to agency notices immediately to address issues before they escalate.
• Seek professional guidance: Regular consultations with a tax professional can help you manage tax obligations and avoid surprises.

At Tax Lawyers Group, APC, we offer ongoing tax planning and compliance services to keep your finances secure.

Why Choose Tax Lawyers Group, APC?

Removing a tax levy is a complex process that requires expertise, persistence, and a deep understanding of tax law. Our dedicated team of tax attorneys and CPAs have a proven track record of successfully resolving bank and wage levies for clients across California and beyond. We provide:

• Personalized strategies: Tailored solutions based on your financial situation and tax debt.
• Expert negotiation: Direct communication with the IRS, FTB, EDD, and CDTFA to secure levy releases.
• Comprehensive support: From identifying the levy’s source to preventing future issues, we’re with you every step of the way.

Take Action Today

A tax levy doesn’t have to derail your financial life. By identifying the issuing agency, understanding your options, and acting swiftly, you can reclaim control of your bank account or wages. Contact us today at (310) 788 9820 or visit to schedule a consultation. Let us help you resolve your tax levy and build a stronger financial future.