Tax Defense ✦ Levy & Garnishment Release
The IRS Is Taking Your Money. Here’s How That Stops.
A wage levy takes most of every paycheck. A bank levy freezes what you had yesterday. Both are survivable, and both are releasable, often in days, once the right papers reach the right IRS desk. North Star Law Firm gets levies released for New Mexico workers and business owners and then fixes the debt that caused them.
Two Very Different Seizures
What just happened to your paycheck or bank account?
The IRS levies under I.R.C. § 6331 without any court judgment. A wage levy is continuous: served once on your employer, it attaches to every future paycheck, and the law exempts only a small floor of each check based on your standard deduction and dependents. Everything above the floor goes to the government until the debt is resolved or the levy is released.
A bank levy works differently, and the difference is your opening. It grabs only what was in the account at the moment of service, and the bank must hold those funds for 21 days before sending them to the IRS. That 21-day window under I.R.C. § 6332(c) exists precisely so mistakes and hardships can be fixed, and it is the single most time-sensitive deadline in collection practice. If a bank levy just hit, the clock is already running; call now, not next week.
The Release Paths
How do levies actually get released?
| Path | Typical speed | What it takes |
|---|---|---|
| Economic hardship (§ 6343) | Days | Financial statement showing the levy prevents basic living expenses |
| Installment agreement | Days to weeks | A payment proposal the IRS accepts; levy releases on approval |
| Currently-not-collectible status | Weeks | Proof there is nothing to collect after allowable expenses |
| Collection due process hearing | Freezes levy while pending | Timely request after the Final Notice of Intent to Levy |
| Pending offer in compromise | During review | A processable offer generally holds enforced collection |
For the notice-by-notice walk-through of how garnishments start and every release option, read our guide: How to Stop an IRS Wage Garnishment in New Mexico.
What do we actually do in the first 48 hours?
File Form 2848 so the IRS must deal with us. Pull account transcripts to confirm the balances, the notices, and the collection statute dates, because a surprising number of levies feed debts with little time left on the ten-year clock. Contact the assigned collection function directly, assert the release ground that fits, hardship, agreement, or procedure, and get a release faxed to your employer or bank. Then start on the real work: the resolution that keeps this from happening again.
Does this cover New Mexico state levies too?
The Taxation and Revenue Department runs its own levy program for state income and gross receipts tax, with separate procedures and separate releases. Federal relief does nothing for a TRD levy and vice versa, and taxpayers behind with one agency are usually behind with both. A complete engagement addresses the two tracks together so the combined payments actually fit your budget.
The Attorney-CPA Difference
Levy release is a speed game. Bring a professional who knows the desks.
- The 21-day bank levy window worked immediately, not after it closes
- Hardship releases built on financial statements the IRS accepts the first time
- Employer and payroll coordination so the release actually reaches your next check
- Federal and New Mexico TRD collection handled in one engagement
Proof, In Print
He wrote the book on tax defense. Literally.
Phillip Zagotti co-authored Taxed: A Taxpayer’s Guide to Tax Defense and Resolution with Ashley Burdette, a plain-English guide to audits, IRS collections, and the resolution tools described on this page. If you want to understand your situation before you call anyone, or you’d rather work the problem yourself first, start with the book. When you decide you want a professional in your corner, the consultation is free.
Questions & Answers
Levy and garnishment questions, answered
How fast can you stop a wage garnishment?
In hardship cases, sometimes within days of getting your financials to the IRS. Most releases come with a negotiated resolution inside one to three weeks. The levy stays in effect until the release reaches your employer, so speed of paperwork matters as much as strategy.
The bank already froze my account. Is that money gone?
Not yet. The bank holds levied funds for 21 days before remitting them to the IRS, and releases obtained within that window put the money back. After remittance, recovery is possible only in narrow circumstances, so the window is everything.
Can the IRS levy my Social Security or retirement income?
Yes, portions of Social Security can be levied, and retirement accounts can be reached in serious cases. These levies have their own procedures and hardship rules, and they respond to the same resolution tools: agreement, hardship status, or offer.
Will my employer fire me over a levy?
Federal law protects against discharge for a single garnishment, and in practice employers process IRS levies as routine payroll paperwork. The bigger job risk is the financial spiral of doing nothing.
Do I still owe the debt after the levy is released?
Yes. A release stops the seizure; it doesn’t erase the balance. That’s why every levy engagement here ends in a resolution, whether that’s a payment agreement, hardship status, an offer in compromise, or a bankruptcy analysis.
Every payday this continues is money you don’t get back.
Free, confidential, and fast: an attorney-CPA reviews your levy, your transcripts, and your quickest path to a release.