Here is a pattern I see constantly. The account gets levied. The client scrambles, calls the IRS, gets a hardship release, breathes. Two months later, the account is levied again.
That is not the IRS breaking a promise. Nothing in the first release promised anything about the future. To stop repeat levies, you have to change what the law allows the IRS to do next.
Why the IRS can levy again
The Code allows successive levies
IRC § 6331(c) says that when the property levied is not enough to satisfy the debt, the IRS "may, thereafter, and as often as may be necessary, proceed to levy in like manner upon any other property liable to levy" until the amount due and expenses are fully paid.
A bank levy is one-time
Each bank levy reaches only the funds on deposit when it is served (Treas. Reg. § 301.6332-3(c)(3)). To reach later deposits, the IRS must serve another levy (IRM 5.11.4.4). So a balance that rebuilds is a balance that can be levied again. See does a bank levy take future deposits.
A release is not a shield
IRC § 6343(a)(3): "The release of levy on any property under paragraph (1) shall not prevent any subsequent levy on such property." The regulation repeats it (Treas. Reg. § 301.6343-1(e)).
The notices are mostly one-time too
The CDP notice is required "only once for the taxable period" (§ 6330(a)(1)). After that, the IRS does not need to offer another CDP hearing before levying the same period again. The regulations note that the IRS generally sends reminder notices if no collection action has occurred within 180 days, but a reminder does not create a new CDP right (Treas. Reg. § 301.6330-1(b)).
Two things can require new notice. If additional tax is assessed for a period, a new CDP notice is needed before that new assessment can be levied (IRM 5.11.1.3.2.1). And the advance third-party contact notice under § 7602(c)(1) covers a period of no more than one year; the IRM says that if more than a year has passed since the last notice, a new notification is required before a levy (IRM 5.11.1.3.2).
The levy source list refreshes
For ACS cases, the IRM says IDRS sends new levy sources at least every three weeks if one is available, and information returns flow in with an annual February download plus weekly updates on open cases (IRM 5.19.4.3.7). A new 1099-INT can become a new levy target without anyone at the IRS deciding to look for it. See how the IRS finds your bank account.
The limits that do exist
Policy Statement P-5-28
IRM 5.11.1.4.6, headed "Repeated Levies on the Same Source," tells employees to "exercise caution when levying repeatedly on the same source," and quotes Policy Statement P-5-28: while the Code allows as many successive levies on the same source as necessary, "judgment should be exercised to avoid undue hardship on the taxpayer and/or the taxpayer's family." Quote it in your call. It is the IRS's own written policy.
Pre-levy judgment
IRM 5.11.1.3.1 tells revenue officers that levy determinations are made case by case, considering what they know about your finances including economic hardship, your responsiveness, compliance history, efforts to pay, and whether current taxes are being paid. If the revenue officer has verified a levy would cause economic hardship, "the levy should not be issued."
Uneconomical levies
Section 6331(f) bars a levy where the IRS estimates its expenses of levy and sale would exceed the property's fair market value. With cash in a bank account, that rarely comes into play, but it exists.
What actually stops the cycle
Releases treat symptoms. These change the diagnosis.
| Status | Effect on new levies | Authority |
|---|---|---|
| Installment agreement request pending or agreement in effect | No levy, plus 30 days after rejection or termination and during a timely appeal | § 6331(k)(2) |
| Offer in compromise pending | No levy, plus 30 days after rejection and during a timely appeal | § 6331(k)(1) |
| Timely CDP hearing request | Levy suspended while the hearing and appeals are pending | § 6330(e)(1) |
| Bankruptcy case | Automatic stay of collection acts | 11 U.S.C. § 362(a) |
| Hardship closing (currently not collectible) | IRM says open levies should be released when a case is closed as hardship | IRM 5.11.2.3.1.4 |
Each has costs and conditions. Installment agreements and offers have qualification rules, and both can suspend the collection statute while pending (§ 6331(k)(3)). Hardship status can be revisited if your finances improve. Bankruptcy has consequences far beyond the IRS. Choose with your eyes open. See installment agreements, offers, and bankruptcy.
Why defaults lead to repeat levies
The most common cause of a second bank levy is a payment plan that failed. Under § 6159(b)(4), the IRS may terminate an agreement for a missed installment, a new tax not paid when due, or a missing financial update, generally after 30 days' notice (§ 6159(b)(5)). Once the 30 days after termination and any timely appeal run out, levy protection ends (§ 6331(k)(2)(D)).
Three habits prevent that:
- Agree only to a payment you can make every month, including the bad months.
- Stay current on new taxes. Withholding or estimated payments for individuals, deposits for businesses.
- Answer the 30-day notice. A proposed termination can be appealed. See CAP.
Make the next levy less likely
Beyond a levy-restricting status, a few practical habits reduce the odds of a repeat levy. Answer IRS letters before the deadlines in them. Keep current-year withholding or estimated payments on track so a new balance does not pile on top of the old one. Keep a copy of every agreement and every payment confirmation, because a payment that does not post on time is one of the IRM's own examples of an erroneous levy (IRM 5.11.4.9). And if your circumstances change, tell the IRS before you miss a payment, not after.
Appealing a repeat levy
CAP is available for levies, but IRM 5.1.9.4 says subsequent levies on the same bank account within a reasonable time are not entitled to another CAP appeal unless there is a legal issue with the new levy, your circumstances have changed, or new issues have arisen. If any of those is true, say so up front.
If you had a CDP hearing, Appeals retains jurisdiction over its determination, including later hearings about collection actions taken under it and, after you exhaust administrative remedies, about a change in circumstances (§ 6330(d)(3)).
Every release buys you time. Only a change in status buys you peace.
For an overview of the statuses that end collection pressure, see the firm's IRS Fresh Start program page.