When the IRS takes money out of your bank account (levy) or your paycheck (wage garnishment), you have
options. You can get the IRS to remove the levy, but only after you pay off all the back taxes you owe, or
set up a payment agreement with the IRS.
Assuming you can’t pay all the taxes, the real question is: How long does it take to set up a payment plan
or other arrangement with the IRS to stop (or, “release”) the levy/garnishment?
With simple payment agreements, the IRS will release the levy immediately
That’s assuming you haven’t already gotten a payment extension. Normally, when you request an extension,
you can get up to 120 days. But if you’re being levied, the IRS will probably only give you 60 days to pay
off the balance, pay down the balance, and/or get into a payment agreement with the IRS.
If you get an extension to pay, you can ask the IRS to immediately release the levy/garnishment. Ask the
IRS representative to fax the levy release to your employer/bank/payer during the call.
So, in short, you can get a levy/garnishment release done in the time it takes to call the IRS if you meet
the terms of the extension-to-pay agreement.
You can also get an immediate levy release if you call the IRS to request a simple monthly payment plan
). Be prepared to finalize the terms of the agreement with the IRS by phone and
ask the IRS to fax a levy release to your employer/bank/payer while you are on the phone.
Tip for bank levies: If you have a bank levy, the bank has to freeze the funds for 21 days
before sending them to the IRS. To access to these funds, act quickly to call the IRS and get into an
agreement. If you get an extension to pay or one of the simplified installment agreements, you’ll be able to
get the bank levy released right away and access your funds.
If you need a more complicated payment agreement, releasing a levy can take
If the extension to pay or the simplified installment agreements won’t work for your situation, you’ll need
to request a more
complicated installment agreement
from the IRS. You’ll need to
provide the IRS with a lot of documentation about your financial situation to qualify, which will take you
You’ll also spend more time gathering and submitting documents if you want to request one of the IRS’
special programs for people with financial hardship. Those programs are deferred payment (called
) and settlement (called
offer in compromise
When requesting these agreements, be sure to ask the IRS to release the levy due to your hardship. But be
prepared for the levy to stay in place while the IRS processes your paperwork for the agreement. In many
cases, the IRS doesn’t register that it needs to release the levy, so you may need to call the IRS to
request a levy release after you are in an agreement.
For best results, get into an agreement by phone – and if you need to follow up with documents – do so
Find out what unpaid taxes could mean for you.
You can also outsource the work to a tax professional, who can help you figure out which payment agreement
is best for your situation and request it from the IRS for you.