What to Do If You Receive Form 8519 About a Bank Levy

Getting Form 8519 in the mail is very serious – it means the IRS has levied your bank account or other property held by another party. At this point, the levy has already started. If it's a bank levy, the funds in your account are already frozen (up to the value of the levy), and if the levy is on other property, the form will explain which property was affected. 

Let's look at what this form means. To get help, start your search for a tax professional now – use the filters to narrow down your results so that you know see pros who have dedicated experience helping clients with IRS bank levies.

Key takeaways

• Form 8519 – the IRS has levied your property.
• Type of levy – usually Form 8519 refers to bank levies, but may also apply to other property held by third parties, such as retirement accounts, investment accounts, accounts receivables, etc.
• Next steps – appeal the levy if it was done in error or you're experiencing financial hardship.
• What happens to the money – with a bank levy, the bank holds the funds for 21 days and then sends them to the IRS; Timing varies for other types of property levies. The funds will be applied to your tax debt.
• How to avoid future levies – if you still owe money after the levy, make arrangements to pay, set up hardship status, or get your account marked as currently not collectible. 

What Is IRS Form 8519?

IRS Form 8519 is called "taxpayer's copy of notice of levy". The IRS will send you this form if it's levying property held by other entities – most commonly, this refers to a bank levy but may also include levies on accounts receivables, investment accounts, or federal contractor payments. 

Generally, you will only receive Form 8519 if the levy was mailed by the Automated Collection System (ACS) or by a revenue officer through the Correspondence Production Services (CPS). You will not receive this form if the levy was faxed or hand-delivered. You'll still receive a notice, but it will come in a different format. 

What to Expect if the IRS Levies Your Bank Account

You may notice that the funds in your account are frozen before you receive Form 8519. In fact, the IRS makes a dedicated effort to prevent you from getting your copy of the levy notice before the levy starts. The Internal Revenue Manual (IRM) instructs IRS employees to wait a day or two before mailing a copy of the levy to you if the levy was served on a local bank. 

From the IRS's perspective, this helps to ensure that you don't get a heads-up before the levy and withdraw all the funds from your account. However, from a taxpayer's perspective, it can be scary to see that the funds in your account have been frozen when you're not sure what's going on. 

Whether you've received Form 8519 yet or not, here's what happens with a bank levy:

• Bank receives the levy notice – the IRS typically sends the bank Form 668-A alerting them of the levy. 
• Bank freezes the funds – the bank will immediately freeze the funds in your bank account, up to the amount shown on the levy. If you have less than the balance due, all of the funds in your account will be frozen.
• Bank holds the funds for 21 days – the bank must hold the funds for 21 days to give you a chance to dispute the levy. Typically, at this point, the only options are to prove that the levy was done in error, show that you don't own the funds in the bank account, or prove that the levy attached to exempt funds. In some cases, you may be able to reverse the levy by proving financial hardship.
• You receive From 8519 – at some point during the 21 day period, you will receive Form 8519 alerting you about the levy. It will explain which bank account was levied and outline your options. 
• The bank may charge you a fee for the levy – the bank may charge you a fee to cover the work of processing the levy. It varies, but is usually around $100.
• You can continue to use your account – the levy only attaches to the funds in your account on the day the bank receives Form 668-A. Other than that, you can continue to use your account as usual. The levy will not affect any new deposits. 
• Bank sends the funds to the IRS – after the 21-day holding period, the bank will send the funds to the IRS, and they will be applied to your tax bill. 

If you still owe additional money, the IRS will continue involuntary collections, which may include more levies on your property or wage garnishments. However, if you reach out and make payment arrangements, you should be able to avoid future levies. 

Can the Bank Help You Deal With an IRS Levy?

Your bank can provide you with information about the levy and what to expect, but unfortunately, they can't reverse the levy, release the funds, or help you deal with the IRS. 

What the bank can do

The bank has to follow federal law and levy the funds as outlined in Form 668-A. The bank can also give you information about the following:

• The date/time the levy was received. 
• When the 21-day holding period started.
• The date the funds will be sent to the IRS.
• Their policy on exempt funds.

What the bank can't do

However, the bank cannot do any of the following:

• Release frozen funds for you – if you have outstanding checks or automatic withdrawals, the bank will not be able to use any of the frozen funds to cover those expenses. 
• Release exempt funds – if any of the funds are exempt (for example, they're from workers' comp or disability benefits), you need to contact the IRS directly. The bank can only release these funds under the IRS's direction.
• Freeze any new deposits – the levy only applies to the funds in your account on the day the bank receives the levy. They don't apply to any new deposits. 

What You Can Do in the 21-Day Window

To get the bank to release the levy, consider these options:

• Pay the tax due in full – if you're able to pay the balance in full during the 21 days, the IRS will release the bank levy. Typically, at this point, you cannot get the funds released by setting up an installment agreement (monthly payment plan), but that can vary based on the situation.
• Request a hardship release – if you're able to prove financial hardship, the IRS may be willing to release the funds. However, once you get to this stage in the collection process, you may have to show proof of a specific hardship – for example, an eviction notice or a shut-off notice from the utility company. 
• Prove error – if the IRS has levied the account in error (for example, you're just a signatory on the account and not an owner), you need to contact them ASAP so that they can instruct the bank to release the funds before the 21-day window closes. 

The best strategy depends on the situation – to protect yourself, you should not handle a bank levy on your own. You should reach out to a tax professional. They'll be able to customize a plan based on your budget and preferences. 

Check out our page on bank levy FAQs to learn more.

What If You Still Owe After the IRS Levies Your Bank Account

If the bank levy covers your full tax debt, that's good news – you're no longer in debt to the IRS. However, if it only covered part of your balance due, you still have some work to do. Luckily, the IRS has several relief options, and once you get approved for a resolution agreement, the agency will stop all collection actions against you. 

• Installment agreement – set up monthly payments on your tax debt. 
• Offer in compromise – settle your tax debt for less than owed, based on your disposable income and the equity in your assets.
• Currently not collectible – prove that you don't have any valuable assets or disposable income, and the IRS will not require any payments until your financial situation improves. 
• Partial payment installment agreement – make monthly payments based on your budget, and the IRS writes off any remaining balance on the collection statute expiration date (CSED), which is usually about 10 years after the tax was assessed. 

You may also want to look into penalty abatement, which can help reduce your balance, in addition to setting up one of the above options.

Why Did the IRS Levy My Bank Account?

The IRS levies bank accounts in situations where taxpayers refuse to pay their tax debt over an extended period of time. The exact timing varies, but generally, the IRS doesn't resort to this type of involuntary collection until you're several months late. 

In the meantime, you'll receive several notices about your balance due. Individuals typically receive CP14, CP501, CP503, and CP504 – each of these demands for payment arrives about six to eight weeks apart. Then, the agency will send a Final Notice of Intent to Levy with Your Right to a Hearing – this notice gives you 30 days to make payment arrangements or appeal with a Collection Due Processing (CDP) hearing. If you don't, the IRS will move forward with the bank levy.

What if I never received a notice before the bank levy?

By law, before levying bank accounts or any other assets, the IRS must send you a 30-day warning that outlines your right to a CDP hearing. If the IRS didn't send that notice, they've made a procedural error, and they must reverse the levy.

However, here's the kicker– the agency only needs to send this letter to your last known address. If you missed the letter because the IRS didn't have the right address, you're out of luck. 

Can I Get the Money Back?

You've received Form 6815, the 21 days have passed, and the bank has sent your money to the IRS. Can you get it back? There is a process to request a refund of seized cash or other property, but unfortunately, that really only works in very rare cases.

Most people are not going to be able to get the money back. If you're in this situation, it's time to cut your losses and make payment arrangements with the IRS or get your account marked as uncollectible. That's the only way to stop future bank levies. 

When to Involve a Tax Pro

You should contact a tax pro the minute you receive Form 6815. This is not a DIY situation. You are legally allowed to try to handle this on your own, but for the best results, you should work with a tax professional who specializes in tax resolution work. 

The only exception would be if you agree with the tax debt and you have the funds to pay it in full. Then, just call the IRS and pay them, or sign into your online account and make a payment. 

A tax pro can help to remove levies from exempt funds, prove that the levy was issued in error, appeal through the Collection Appeals Program (CAP), or apply to reverse the levy based on your unique situation. They can also communicate with the IRS on your behalf, which is especially important if you have a revenue officer assigned to your case. They can also help you figure out how to resolve any remaining tax debt.

FAQs about Form 8519

Is Form 8519 the same as a Final Notice of Intent to Levy?

No, Form 8519 means that the levy on your property has already started. A Final Intent to Levy notice is a warning that your property will be levied in 30 days if you don't take action. If you ignore a final Intent to Levy, you may receive a Form 8519 next. 

Can the IRS levy a joint account if only one spouse owes?

Generally, yes, the RS can levy a joint bank account if only one spouse owes taxes. This rule doesn't just apply to bank accounts owned jointly by spouses. It applies to any jointly owned account – typically, the funds in jointly owned accounts are considered to be owned jointly, regardless of who deposited the funds.

How do I stop the IRS from levying the account again?

Make formal payment arrangements, get your account marked as currently not collectible, or pay the tax debt in full. If you don't take action, you may eventually face another bank levy and another Form 8519.

What if the levy hit payroll or rent money?

Unfortunately, outstanding payments may be affected by the levy. For example, say there's $30,000 in your bank account, you owe $40,000 in back taxes, and the IRS levies the full balance in your account. The day after the bank freezes the funds, an automatic withdrawal from your payroll software hits the account for $10,000 and a rent check for $3000 gets presented to the bank. The bank will likely reject (return as insufficient funds) both of these transactions, unless you deposit additional money to cover them.

Can I appeal a bank levy?

Yes, once the levy has started, you have 10 days to request an appeal through the Collection Appeals Program (CAP). Additionally, if you received a Final Notice of Intent with your right to a CDP hearing in the last 12 months, you may still be able to request an equivalent hearing. Both of these processes require very specific procedures and deadlines, so you may want to work with a tax professional.

Get Help With IRS Levies Now

If the IRS is actively levying your property, you need help today – use TaxCure to search for a tax professional who has experience with levy releases. They can help you deal with the bank levy, make payment arrangements on your remaining debt, and avoid future tax problems.