Form 668-A Notice of Levy: What the IRS Sent Your Bank

Your debit card got declined. You called the bank. The bank told you there is a "legal hold" from the IRS. What they are looking at is a Form 668-A, Notice of Levy.

That form is not a bill and it is not a warning. It is a legal demand served on a third party (your bank) that says, in effect: the money you hold for this taxpayer now belongs to the United States, up to this amount. The bank has no choice about honoring it. You have a short window to do something about it.

Here is what the form is, what it reaches, and what to do with your copy.

What Form 668-A is

The IRS uses different levy forms for different kinds of property. The Internal Revenue Manual spells it out at IRM 5.11.2.2.2:

• Form 668-W levies wages, salary, and other income from personal services.
• Form 668-R levies the lump sum of a retirement asset.
• Form 668-A levies "other property" a third party is holding. The IRM's own examples are bank accounts and business receivables.

So when a bank account is levied, the document is a 668-A. You may see it referred to as Form 668-A(c)(DO), which is the version named in IRS Publication 4528. Many bank levies are also issued electronically through the IRS automated levy programs (IRM 5.11.4.1.6), so your bank may never hold a paper original at all. The legal effect is the same.

The authority behind it is IRC § 6331(a). If you owe a tax and neglect or refuse to pay it within 10 days after notice and demand, the IRS may collect by levy on "all property and rights to property" belonging to you, except property the Code exempts in § 6334.

What the form tells your bank to do

A notice of levy is a demand to surrender. IRC § 6332(a) requires anyone holding property subject to a levy to turn it over on demand. For banks, there is one big exception to "turn it over now," and it is the most important fact on this page.

IRC § 6332(c) says a bank surrenders deposits "only after 21 days after service of levy." The Treasury regulation that implements it, Treas. Reg. § 301.6332-3, adds the mechanics:

• The bank freezes the levied funds. No withdrawals may be made on levied deposits during the holding period.
• If the bank does not receive a release from the IRS during the hold, it must pay the deposits (plus interest earned, up to the levy amount) to the IRS on the first business day after the holding period expires.
• The IRS can ask the bank to extend the hold.

That 21-day window is why a bank levy is fixable in a way that a completed seizure often is not. I cover the clock in detail in the 21-day hold explained, and you can count your own days with the 21-day hold calculator.

The form also tells the bank how hard to look. According to IRM 5.11.4.11.1, the instructions on Form 668-A tell the recipient to make a reasonable effort to identify all of your property, and at a minimum to search its records by the name, address, and identifying number on the form. A perfect match is not required. The IRM says the TIN is not the only indicator, and an unusual name alone can be enough.

What a 668-A reaches, and what it does not

It reaches money in the account at the moment of service

IRC § 6331(b) says a levy extends "only to property possessed and obligations existing at the time thereof," with an exception for wages under § 6331(e). Treas. Reg. § 301.6332-3(c)(3) applies that rule to banks: the levy applies to funds on deposit at the time the levy is made, up to the amount of the levy.

Deposits made after the levy is served are not caught by it. Not even deposits made during the 21-day hold. IRM 5.11.4.4 says so directly and adds that another levy must be served to reach that money. More on that in does a bank levy take future deposits.

It is capped at the amount on the form

The bank sends no more than the amount shown on the notice of levy (IRM 5.11.4.4). If you have $25,000 in the account and the levy says $10,000, only $10,000 is frozen. If you have $5,000 and the levy says $10,000, the bank sends the $5,000 plus interest that accrues during the hold.

It reaches any account you can withdraw from

A levy attaches to a bank account where you have an unrestricted right to withdraw, even if other people also have signature authority (IRM 5.11.4.3, citing Treas. Reg. § 301.6332-1(c)(4)). The Supreme Court approved that approach for joint accounts in United States v. National Bank of Commerce, 472 U.S. 713 (1985). This is why your spouse, your parent, or your business partner can wake up to a frozen account for a debt they do not owe. See joint bank accounts and IRS levies.

It does not reach accounts you cannot touch

The IRM gives a clean example: a mortgage escrow account that holds money for property taxes and insurance cannot be reached by a levy as long as you cannot withdraw from it (IRM 5.11.4.7). An escrow refund that is payable to you is a different story.

Who gets which copy

A paper Form 668-A comes in parts. IRM 5.11.2.2.7 tells revenue officers to leave Part 2 with the person who receives the levy and mail Part 4 to the taxpayer. For levies generated through the Automated Collection System and the IRS centralized print sites, the taxpayer copy is Form 8519, Taxpayer's Copy of Notice of Levy, mailed within five business days of the print file being received.

In practice, your bank usually tells you first. Banks send their own letters, often with a fee notice attached. Do not wait for the IRS copy to arrive before you act. The 21 days started when the bank was served, not when you opened your mail.

How to read your copy

Get the copy from the bank if the IRS copy has not arrived. Then look for these items:

1. The taxpayer name and identifying number. Is it you? Is it a business you own? Is it a joint liability with an ex-spouse? Misidentification happens, and the IRM acknowledges levies served on the wrong person in identity theft cases (IRM 5.11.2.3.6).
2. The tax periods and amounts. The levy lists the kind of tax and the periods. Compare them to your records. A period you already paid, or one covered by an installment agreement, is a red flag.
3. The total amount. This is the cap on what the bank can send.
4. The IRS contact name and phone number. This person can release the levy. Treas. Reg. § 301.6332-3(d)(1) tells depositors to call that number to report an error so the IRS can review it fast.
5. The date. Your 21 days run from service on the bank, not from the date printed on the form. If the levy was mailed by certified mail, IRM 5.11.4.11 says the delivery date on the receipt is the date the levy is made.

Was the levy allowed to happen?

Before the IRS can levy, it generally must do several things. IRM 5.11.1.3.2 lists the required notices: notice and demand, a notice of intent to levy, a notice of your right to a Collection Due Process hearing, and advance notice of third-party contacts. The Code backs each of these up. IRC § 6331(d) requires written notice of intent at least 30 days before levy, and IRC § 6330(a) requires notice of your right to a hearing at least 30 days before the first levy for that tax period.

The IRS also cannot levy while certain things are pending. IRC § 6331(k) bars levy while an offer in compromise is pending, while an installment agreement request is pending or in effect, and during certain appeal periods. A levy that violates the law is the kind the IRS must release, and IRM 5.11.2.3.1 uses a levy issued while a CDP hearing is pending as its example.

If the IRS skipped a step, that is not a technicality. It is leverage. I walk through the pre-levy notices in the final notice of intent to levy and the timeline from assessment to bank levy.

What to do in the first few days

The full checklist is in your first 48 hours after a bank levy. The short version:

• Do not drain your other accounts in a panic. Move income to where it needs to go for rent and food, but understand that the IRS can levy again under IRC § 6331(c). Hiding money is a bad plan. Making a plan is a good one.
• Get your copy of the levy and confirm the amount, the periods, and the contact number.
• Figure out which release ground fits. IRC § 6343(a)(1) requires release in five situations, including full payment, an installment agreement, and economic hardship. See how to get an IRS bank levy released.
• If the money is not yours, the real owner has a wrongful levy claim under IRC § 6343(b). See wrongful levy claims.
• Calendar day 21. After that, the money leaves the bank and getting it back runs through a slower process under IRC § 6343(d).

The bottom line

A Form 668-A is a powerful document with built-in limits. It freezes what is in the account today, up to a stated amount, and then it waits 21 days. The law requires the IRS to release it in specific situations, and you can usually reach the person who can do that by calling the number printed on the form.

If you want to see how my office approaches levies generally, the firm's page on IRS tax levies is a good start. But do not spend the 21 days reading. Spend them acting.