A levy is the legal seizure of your property to satisfy a tax debt. It is different from a lien. A lien is a claim against your property that secures the government’s interest. A levy actually takes the property. The IRS can use a levy to reach money in your bank accounts, wages, accounts receivable, and other assets.

The IRS does not get to do this out of the blue. Federal law requires the IRS to send you advance written notice and to give you a chance to be heard before it can levy in most situations. The specific document that triggers your most important protections is the Final Notice of Intent to Levy and Notice of Your Right to a Hearing. That notice arrives as Letter 1058, LT11, or CP90, depending on which part of the IRS is handling your case.

If you are a Maryland or Pennsylvania business owner who just opened one of these letters, the most important thing to understand is this: the clock is now running. Treat the deadline printed on the notice as controlling unless counsel confirms otherwise, because CDP hearing rights are time-sensitive and missing the deadline can cost you the automatic levy hold and Tax Court review rights. The single biggest mistake is treating the notice as just another piece of mail. Our Tax Debt & Collections Defense practice exists precisely for the weeks after a notice like this lands.

One of the most confusing aspects of IRS collections is that more than one notice uses the words “intent to levy.” They are not equal, and confusing them can cost you.

The notice sequence

For most balances, the IRS sends a series of escalating notices before it ever seizes anything. A typical sequence looks like this:

• CP14: the first notice that you owe a balance.
• CP501 and CP503: reminders that the balance is still unpaid.
• CP504: a notice using “intent to levy” language. This one is serious, but it is not the final CDP levy notice for ordinary collection. CP504 generally permits the IRS to levy your state tax refund and signals that broader enforced collection may follow. By itself, it does not give the IRS full power to levy your bank accounts, wages, or receivables, and it does not by itself provide the full Collection Due Process hearing right.
• Letter 1058, LT11, or CP90: the Final Notice of Intent to Levy and Notice of Your Right to a Hearing. This is the notice that unlocks the IRS’s broad levy power after 30 days, and it carries your Collection Due Process appeal rights.

Why people confuse CP504 with the final notice

CP504 is written in alarming language and tells you the IRS intends to levy. Many business owners read it, panic, and then assume the threat is immediate, or worse, assume it is just more noise and ignore it. The accurate picture is in between. CP504 signals that your case has reached an advanced stage and that the state-refund levy is on the table, but the IRS still has to send the final notice and wait out the 30-day period before it can reach your bank accounts and wages.

Letter 1058 vs. LT11 vs. CP90

These three are functionally the same notice with the same legal effect. They differ mainly in who issues them:

• Letter 1058 (L1058) is typically issued by a local IRS Revenue Officer who is working your case in the field. A Revenue Officer assignment is itself a signal that the IRS is taking your case seriously.
• LT11 is generally issued by the IRS Automated Collection System and tends to be shorter.
• CP90 is another version of the final notice with the same right-to-hearing language.

All three are titled, in substance, “Final Notice of Intent to Levy and Notice of Your Right to a Hearing,” all three are issued in connection with your rights under Internal Revenue Code Section 6330, and all three start the 30-day window to request a Collection Due Process hearing. Treat the deadline shown on the notice as controlling.

The IRS’s levy power is broad, but it is not unlimited. Before the IRS can levy in the ordinary case, the following generally must be true:

1. The IRS assessed the tax and sent you a Notice and Demand for Payment.
2. You neglected or refused to pay the tax.
3. The IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy.
4. Where applicable, the IRS provided notice of your right to a hearing, including any notice regarding third-party contacts.

Because these steps are legal prerequisites, a defense often begins by checking whether the IRS actually followed them. If a required notice was never properly sent, or was sent to the wrong address, that can be the basis for challenging the levy. This is one reason it is worth having the notice and your account transcript reviewed rather than assuming the IRS got everything right.

Under Internal Revenue Code Section 6331, the IRS can levy property and rights to property that you own or that someone else holds for you. For a business owner, the reach is wide:

• Bank and financial accounts, business and personal.
• Wages and other income, including a continuous levy on salary.
• Accounts receivable, meaning money your customers or clients owe your business.
• Business assets and, in some cases, personal property such as vehicles.
• State tax refunds and certain federal payments.
• In some circumstances, real estate, including a business location, though seizing a primary residence involves additional procedural protections.

If your exposure involves unpaid payroll taxes, there is an additional risk worth flagging: the Trust Fund Recovery Penalty, which can make responsible individuals personally liable for the unpaid trust fund portion of employment taxes. Payroll tax cases deserve especially careful handling.

Understanding the difference between these two levy types changes how urgently you respond and which strategy fits.

The bank levy and the 21-day hold

A bank levy reaches the funds that are in your account at the moment the levy is served, up to the amount of the levy. Under Internal Revenue Code Section 6332(c), the bank must freeze those funds and hold them for 21 calendar days before turning them over to the IRS. That holding period is not a formality. It is a genuine window in which a levy release can be negotiated and the frozen funds potentially returned before they leave the bank.

A few features of bank levies that surprise people:

• The levy captures only the balance present when the levy arrives. Deposits made afterward are not taken under that same levy, although the IRS can issue another levy later.
• There is no general living-expense exemption for a bank levy the way there is for wages. The IRS can reach the full balance up to what you owe.
• Your bank may charge its own levy processing fee, which is not credited against your tax debt.

The wage levy is continuous

A wage levy works differently. Under Internal Revenue Code Section 6331(e), a levy on salary or wages is continuous. It attaches to each paycheck and keeps taking a portion of your pay every pay period until the debt is paid in full, the levy is released, or you reach another resolution. Unlike most creditors, the IRS is not capped at a fixed percentage. Instead, Section 6334(d) leaves a limited amount exempt based on your filing status and number of dependents, and the rest can be taken.

The Final Notice of Intent to Levy carries one especially valuable right: the right to a Collection Due Process hearing, often called a CDP hearing, under Internal Revenue Code Section 6330.

How to request it

You request a CDP hearing by filing Form 12153, Request for a Collection Due Process or Equivalent Hearing, and sending it to the address shown on your levy notice. The request must generally be made within 30 days. Treat the deadline shown on the notice as controlling and act immediately, rather than counting on extra time, because the precise way the period is measured can vary and CDP rights are time-sensitive. On the form you state why you are requesting the hearing and identify any collection alternatives you want considered, such as an installment agreement, an Offer in Compromise, or Currently Not Collectible status.

What a timely request accomplishes

• It generally stops the levy on the tax periods covered by the notice while your case is pending with the IRS Independent Office of Appeals.
• It preserves judicial review. If you disagree with Appeals, a timely CDP determination can generally be taken to the U.S. Tax Court.
• It gives you a forum to propose collection alternatives and, in limited circumstances, to challenge the underlying liability if you did not have a prior opportunity to do so.

The trade-off to understand

When you request a CDP hearing, the collection statute of limitations is generally suspended while the matter is pending. In other words, the 10-year period the IRS has to collect is paused and effectively extended by roughly the length of the suspension. This is not a reason to skip the hearing. It is simply a factor your counsel weighs when choosing a strategy.

What if the 30 days have passed?

If you missed the deadline, you may still request an Equivalent Hearing, generally within one year. An Equivalent Hearing lets you raise the same issues with Appeals, but it does not carry the automatic levy hold of a timely CDP request, and it does not preserve the same right to Tax Court review of the determination. Acting before the 30 days expire is meaningfully better than acting after.

Internal Revenue Code Section 6343 sets out the circumstances in which the IRS must release a levy, including full payment, expiration of the collection period, entering an installment agreement that provides for release, a showing of economic hardship, and a showing that release will facilitate collection. In practice, here are the routes a Maryland or Pennsylvania business owner is most likely to use.

1. Request a timely Collection Due Process hearing

As covered above, a CDP request filed within 30 days generally pauses levy action on the listed periods and gives you a forum to propose a resolution. This is the cleanest way to stop a levy before it starts.

2. Enter an installment agreement

A formal monthly payment plan is one of the most common grounds for a levy release. An informal promise to pay does not stop the clock. The agreement must be formally accepted. For a deeper walkthrough, see our guide to the IRS installment agreement for business owners in Maryland and Pennsylvania.

3. Submit an Offer in Compromise

If your reasonable collection potential is low relative to what you owe, an Offer in Compromise may let you settle the debt for less than the full amount. It is not a fit for everyone, and a pending offer has its own effect on collection activity. Our explainer on the IRS Offer in Compromise covers when it makes sense.

4. Request Currently Not Collectible status

If you genuinely cannot pay your taxes and your necessary living expenses, the IRS may place your account in Currently Not Collectible status, which pauses enforced collection, including levies, while the hardship continues. The collection statute generally keeps running during this time. For a business owner with payroll liabilities, expect a deeper financial review.

5. Demonstrate economic hardship

If a levy prevents you from meeting necessary expenses, that hardship can be grounds for release. For a business, the inability to make payroll or cover essential operating costs can be part of that showing. Documentation is everything here.

6. Pay the liability or show a procedural defect

Full payment releases the levy. So can showing that the collection period has expired or that the IRS failed to follow a required step, such as never properly sending the final notice. This is why a transcript review at the outset can change the entire strategy.

If you owe Maryland taxes in addition to federal taxes, you are facing two collectors at once. The Comptroller of Maryland has its own enforcement tools and is not bound by the federal notice sequence. Maryland can pursue liens, can attach wages through its salary lien authority, and can take collection action against bank accounts for unpaid state tax.

Two practical points for Maryland business owners:

• Resolving the IRS does not resolve Maryland. A federal installment agreement or Offer in Compromise has no automatic effect on a Maryland balance. The state debt needs its own resolution.
• Sequence and coordination matter. When both agencies are collecting, the order in which you address them, and how you allocate limited cash, can make a real difference. This is a place where coordinated counsel earns its keep.

If your underlying dispute is about whether you owe the tax at all, rather than how to pay it, our work in Civil Tax Controversies & Penalties and IRS & State Tax Appeals may be the better entry point.

Pennsylvania’s collection posture is aggressive in ways that surprise business owners. The Pennsylvania Department of Revenue is authorized under Act 46 of 2003 to garnish wages administratively, without first obtaining a court order. Under that authority, the Department can order an employer to withhold up to 10 percent of a delinquent taxpayer’s gross wages until the liability is satisfied.

A few features Pennsylvania business owners should know:

• No court order required. The administrative wage garnishment does not require the Department to sue you first. A Notice of Intent to Garnish Wages is generally sent to the taxpayer ahead of the order to the employer.
• Corporate officer exposure. Administrative garnishment can reach liabilities assessed against responsible corporate officers, not just the entity.
• Private collection agencies. Pennsylvania routinely refers delinquent accounts to outside collection agencies, which can add to the pressure and the confusion about who you are actually dealing with.
• Bank levies and liens. Beyond wage garnishment, the Department can pursue liens and bank actions for unpaid state tax.

If the 30 days pass without a resolution or a timely hearing request, the IRS can move to enforced collection on the periods covered by the final notice. There is generally no separate “we are about to levy now” courtesy notice at that point. Practically, that can mean:

• Your bank account is frozen and, after the 21-day hold, swept up to the amount of the levy.
• A continuous wage levy begins taking a portion of every paycheck.
• Your accounts receivable are levied, redirecting customer payments to the IRS.
• Other property becomes exposed to seizure.

Missing the deadline is not the end of every option. You can still request an Equivalent Hearing, pursue an installment agreement or Offer in Compromise, seek Currently Not Collectible status, or, if a bank levy has already hit, work the 21-day hold to try for a release before the funds transfer. But you will be doing it without the automatic levy hold a timely CDP request would have given you, and often under far more time pressure. The lesson is simple: respond inside the window.

• Treating CP504 as the final word, or as nothing. It is neither. Know which notice you actually hold.
• Ignoring certified mail. Not picking up the letter does not stop the clock. The notice is effective when properly sent.
• Letting the 30 days lapse. The single most valuable protection, the CDP hearing with its automatic levy hold, evaporates after 30 days.
• Relying on an informal promise to pay. Only a formally accepted arrangement releases a levy. A phone call is not an agreement.
• Staying out of filing compliance. The IRS generally will not grant alternatives while returns are unfiled. Get current first.
• Forgetting the state. Resolving the IRS while ignoring the Comptroller of Maryland or the Pennsylvania Department of Revenue leaves a second collector free to act.
• Mishandling payroll tax exposure. Trust fund liabilities can become personal. These cases need careful, early handling.

If you are not certain which notice you are holding, the safest assumption is to treat any notice mentioning a “right to a hearing” as time-sensitive and have it reviewed immediately.

An IRS Notice of Intent to Levy is a written notice telling you the IRS intends to seize your property to satisfy an unpaid tax debt. The version that matters most is the Final Notice of Intent to Levy and Notice of Your Right to a Hearing, sent as Letter 1058, LT11, or CP90. That final notice is issued in connection with Internal Revenue Code Section 6330 and gives you the right to request a Collection Due Process hearing. An earlier notice, CP504, uses levy language but is not the final CDP levy notice for ordinary collection. CP504 generally permits the IRS to levy your state tax refund and signals that broader enforced collection may follow, but the IRS generally must still issue a formal Final Notice of Intent to Levy and Notice of Your Right to a Hearing before it can proceed with ordinary levies against wages, bank accounts, receivables, or other property.

You generally have 30 days to request a Collection Due Process hearing on a Final Notice of Intent to Levy (Letter 1058, LT11, or CP90) by filing Form 12153. Treat the deadline shown on the notice as controlling and act immediately, because the precise way the period is counted can vary and the rights are time-sensitive. A timely request stops the IRS from levying the tax periods listed in the notice while your case is with the IRS Independent Office of Appeals, and it preserves your right to take the case to the U.S. Tax Court. If you miss the deadline you may still request an Equivalent Hearing, but you lose the automatic levy hold and the right to Tax Court review of that determination.

Yes. Once the IRS has issued the required notices and the 30-day window has passed without a resolution or a timely hearing request, it can levy a business or personal bank account. Under Internal Revenue Code Section 6332(c), the bank must freeze the funds that were in the account when the levy arrived and hold them for 21 calendar days before sending them to the IRS. That 21-day hold is a critical window in which a levy release can be negotiated. A bank levy reaches only the funds on deposit when the levy is served, so later deposits are not captured unless the IRS issues another levy.

A bank levy is generally a one-time event that captures the funds on deposit at the moment the levy is served, subject to the 21-day holding period. A wage levy, by contrast, is continuous under Internal Revenue Code Section 6331(e). It attaches to each paycheck and keeps taking a portion of your pay every pay period until the debt is paid, the levy is released, or you reach another resolution. The IRS leaves a limited amount exempt from a wage levy based on your filing status and dependents under Section 6334(d).

Internal Revenue Code Section 6343 sets out the grounds on which the IRS must release a levy, including paying the liability in full, the collection period expiring, entering an installment agreement that calls for release, showing the levy is creating an economic hardship, or showing that releasing the levy will help collection. In practice, the most common routes for a business owner are requesting a timely Collection Due Process hearing, entering an installment agreement, submitting an Offer in Compromise, requesting Currently Not Collectible status based on hardship, or demonstrating that the levy prevents you from meeting necessary living or payroll expenses. Our Tax Debt & Collections Defense team can help identify the right path.

A timely Collection Due Process hearing request generally suspends IRS levy action on the tax periods covered by the notice while the case is pending with the IRS Independent Office of Appeals and during any later Tax Court review. One trade-off to understand is that the collection statute of limitations is generally paused while the case is pending, so the time the IRS has to collect is extended by roughly the length of the suspension. If you owe for multiple periods, the hold applies only to the periods on the notice for which you timely requested a hearing.

Yes. State tax collection runs separately from federal collection. The Comptroller of Maryland can pursue liens, wage attachments, and bank actions for unpaid Maryland taxes, and the Pennsylvania Department of Revenue is authorized under Act 46 of 2003 to garnish up to 10 percent of a delinquent taxpayer’s gross wages without a court order, in addition to filing liens and pursuing bank levies. Pennsylvania also routinely refers delinquent accounts to private collection agencies. If you owe both federal and state tax, resolving one does not stop the other, which is why a coordinated strategy matters.

If you do nothing within the 30-day window, the IRS can begin enforced collection without further warning. That can include freezing and seizing bank accounts, garnishing wages on a continuous basis, levying accounts receivable owed to your business, and in some cases seizing and selling other property. For a business, a receivables levy can be especially damaging because it redirects money your customers owe you straight to the IRS. The earlier you respond, the more options you have, so do not let the deadline lapse.

You are not required to hire an attorney, and some straightforward cases can be resolved by filing the right form and setting up a payment arrangement. The notice becomes much more serious when you owe payroll or trust fund taxes, when a Revenue Officer is assigned, when multiple periods or both federal and state agencies are involved, or when the amount at issue is significant. In those situations a tax attorney can preserve your appeal rights, negotiate a levy release, structure the right resolution, and protect against personal exposure such as the Trust Fund Recovery Penalty.