IRS levies on businesses for unpaid payroll taxes

• Bank accounts — the bank freezes funds for 21 days, then sends them to the IRS.
• Accounts receivable — notices to your customers directing them to pay the IRS instead of you.
• Merchant processors and payment platforms.
• Federal contractor payments through the Federal Payment Levy Program.
• Physical assets — far less common and requiring managerial approval.

Receivables levies are especially disruptive because customers learn of the tax problem.

Normally the IRS must issue a notice of intent to levy and a final notice with Collection Due Process rights (Letter 1058 or LT11) at least 30 days before levying. For businesses, CP504B is the intent-to-levy notice. An important exception: a disqualified employment tax levy can be served when the business requested a CDP hearing on employment taxes in the prior two years — in that case the hearing comes after the levy.

The IRS must release a levy if the tax is paid, the collection statute expired, releasing it would help collection, you enter an installment agreement that doesn't prohibit release, or the levy creates an economic hardship (for individuals). For businesses, the practical path is usually: make current deposits, submit a Form 433-B with a realistic plan, and ask the revenue officer for release. The 21-day bank hold is the window to act.

• Collection Due Process (CDP) — request on Form 12153 within 30 days of the final notice; you can propose alternatives and Tax Court review is available.
• Collection Appeals Program (CAP) — faster, before or after a levy, but without court review.
• An equivalent hearing if you miss the CDP deadline but act within one year.

Levies tend to repeat until the account is resolved. Stopping pyramiding, setting up a payment plan and keeping deposits current are the only durable fixes. Take the business assessment and choose "levy or seizure" to see options matched to that stage.