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The Internal Revenue Service (IRS) can seize the funds in a bank account if the taxpayer ignored tax debt notices. This measure, known as a garnishment or levy, allows the agency to take the money available in the account at the moment the bank receives the order. This is not a warning: it is an immediate executive action.

The levy is triggered when the taxpayer does not respond to IRS notices or arrange a payment plan. By law, the agency must notify the debtor before the first levy and give them the right to a CDP hearing (Collection Due Process Hearing). If that deadline passes without a response, the IRS can proceed.

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What can the IRS garnish from someone who ignored the notices?

The bank levy has a specific effect: the IRS takes what is in the account when the order reaches the bank. If more funds are deposited later, it must issue a new levy. Other types of garnishment, by contrast, operate continuously until the debt is paid off.

The assets the IRS can garnish include:

  • Bank accounts (one-time effect per order)
  • Wages: a portion of each paycheck, with exempt amounts depending on marital status, deductions, and dependents
  • Social Security benefits: up to 15% under the Federal Payment Levy Program (FPLP)
  • State tax refunds
  • Customer payments (accounts receivable)
The Internal Revenue Service (IRS) can seize the funds in a bank account if the taxpayer ignored tax debt notices. Image: Shutterstock.

What happens with wages?

The employer receives Form 668-W and calculates the exempt amount. The garnishment continues each pay period until the debt is paid or the IRS releases the levy.

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How can someone with an IRS debt stop the garnishment?

Anyone who receives a notice should call the number listed in the notice as soon as possible. The IRS is required to release the levy if any of these conditions are verified:

  • The total amount owed was paid
  • The legal collection period expired before the levy was issued
  • The garnishment creates a serious economic hardship that prevents basic expenses from being covered
  • A payment plan (installment agreement) was approved that includes release
  • The value of the property exceeds the debt and releasing the garnishment does not affect the IRS’s ability to collect