IRS Form 668-A: The 21-Day Clock and How to Get It Released

IRS Form 668-A is a notice of levy the IRS sends to a bank or other third party holding your money or property, ordering them to hand it over to satisfy an unpaid tax debt. It is not a warning and not a request. If a bank received it, you have 21 calendar days before your funds are surrendered to the IRS, and that window is the single most important deadline in this process.¹

What a 668-A Actually Does

Form 668-A is the IRS’s standard tool for seizing property held by someone other than you. The authority comes from Internal Revenue Code Section 6331, which lets the agency take property without first going to court.² It most often lands at a bank, but the IRS also uses it to reach accounts receivable owed to you by clients, rental income, brokerage accounts, commissions, royalties, and the cash value of life insurance.³

The critical thing to understand is that a 668-A is a one-time seizure. It attaches to whatever the third party is holding on the day the notice arrives. If your bank gets the form today, the IRS takes what is in the account today. Deposits that land next week are not automatically swept up; the IRS would have to issue a new levy to reach them.⁴ That one-shot nature is also why the response window is so tight.

(If what you received affects your paycheck instead of a bank account, that is a different form, 668-W, which creates a continuous wage levy and has its own exempt-amount calculation. The rest of this article is about 668-A.)

The 21-Day Clock at Your Bank

When a bank receives Form 668-A, it does not immediately wire your money to the IRS. Federal regulations require a 21-calendar-day holding period, during which the bank freezes the funds but keeps them in place.¹ That window exists specifically so you can contact the IRS and work out a resolution.

If the IRS has not told the bank to release the levy by the end of day 21, the bank is required to surrender the frozen funds (plus any accrued interest, up to the levy amount) on the next business day.¹ Once the money leaves the bank, recovering it is much harder than preventing it from leaving in the first place.

Other third parties do not get the same cushion. A client who owes you money or a brokerage holding your investments is generally required to turn the property over promptly after receiving the notice, not after 21 days.

What the Levy Can and Cannot Reach

Almost any asset held for you by someone else is on the table. There are a few categories, though, where the rules shift.

Joint Bank Accounts

If you share an account with a spouse, business partner, or parent who does not owe the tax, the IRS can still levy the entire balance. All funds in a joint account are treated as available to satisfy the liable owner’s debt. The non-liable co-owner can request a partial release by proving which deposits were theirs, using bank statements and deposit records, but they carry the burden of untangling it.

Social Security

Social Security is not fully protected from tax levies. Through the Federal Payment Levy Program, the IRS can take up to 15 percent of your monthly benefit for delinquent tax debt. That 15 percent applies no matter how small the remaining benefit is; there is no minimum floor like the one that applies to most non-tax debts.⁵

Retirement Accounts

The IRS can levy 401(k)s, IRAs, and similar accounts, but internal rules make this a last resort. A revenue officer must first confirm that no other assets are available and that the taxpayer’s conduct has been “flagrant,” meaning things like making voluntary retirement contributions while claiming inability to pay, or relying on frivolous legal arguments. Absent flagrant conduct, policy says the retirement account should not be levied, and even then the IRS must check whether the taxpayer depends on those funds for basic living expenses.⁶

If a retirement account is levied, you do not owe the 10 percent early withdrawal penalty that normally applies before age 59½. The distribution is still taxable income, and the plan administrator will withhold 20 percent for federal tax.⁶

Property That Is Exempt

Federal law carves out specific property the IRS cannot seize:⁷

Clothing, schoolbooks, fuel, provisions, furniture, and personal effects up to a set dollar value.
Unemployment benefits received under federal or state law.
Service-connected VA disability payments.
A minimum portion of wages tied to your filing status and dependents (this exemption is most useful for a wage levy, not a bank levy).

For a 668-A on a bank account, the wage exemption is of little help because the money is treated as a lump sum. If a levy would leave you unable to cover basic needs, you have to affirmatively request a release on hardship grounds.

How to Get the Levy Released

The IRS is required by law to release a levy when any of these conditions is met:⁸

You pay the debt in full, or the 10-year collection period has expired.
Releasing the levy would actually help collection (for example, by freeing funds so you can make installment payments).
You enter an installment agreement under IRC 6159, provided you are current on all required tax filings.
The levy is causing an economic hardship, meaning it prevents you from meeting basic living expenses like housing, food, utilities, or transportation to work.
The property’s value is significantly greater than the debt and a partial release will not hurt collection.

Installment Agreements

An installment agreement is often the fastest route. Once the IRS accepts a monthly payment plan and you are compliant with your filings, release of the levy becomes mandatory. For a bank account levy, this is the practical lever most taxpayers reach for within the 21-day window.

Currently Not Collectible Status

If you genuinely cannot pay anything without going hungry or losing your home, you can request Currently Not Collectible (CNC) status. You will need to document income and expenses on Form 433-A or Form 433-F. If the numbers show that enforced collection would leave you unable to meet basic needs, the IRS will pause active collection and release any active levy.⁹ The debt does not vanish; interest and penalties keep accruing while enforcement is suspended.¹⁰

Offer in Compromise

An Offer in Compromise settles the debt for less than the full amount. You are essentially arguing that the IRS will collect more by accepting your offer than by continuing to chase the full balance. Approval is harder than most people expect, since the IRS examines income, expenses, assets, and future earning potential. If an offer is accepted, any outstanding levy must be released.

Taxpayer Advocate Service

If the levy is creating an emergency and ordinary channels are moving too slowly, contact the Taxpayer Advocate Service (TAS). TAS is an independent organization inside the IRS that can intervene when you are facing economic harm. You request help by submitting Form 911, and TAS has authority to issue a Taxpayer Assistance Order directing the IRS to release the levy while your situation is reviewed.¹¹

If the Levy Should Not Have Happened: The CDP Hearing

The IRS cannot leap straight to a 668-A. Before issuing the levy, it must assess the tax and send a demand for payment, giving you at least 10 days to pay. If you do not pay, it must then send a Final Notice of Intent to Levy at least 30 days before the levy, delivered in person, left at your home or office, or sent by certified mail.² The one exception is a jeopardy levy, used when delay would put collection at risk; it is uncommon and reserved for things like suspected asset flight or fraud.³

That Final Notice gives you the right to request a Collection Due Process (CDP) hearing. You have 30 days from the date on the notice to file Form 12153.¹² Filing on time does two things: it freezes the levy while the hearing and any appeals are pending, and it preserves your right to challenge the outcome in Tax Court.

At the hearing, you can raise collection alternatives like an installment agreement, an Offer in Compromise, or CNC status. You can also dispute the underlying tax, but only if you did not have a prior opportunity to contest it, such as when you never received the original assessment notice.¹²

Miss the 30-day window and you can still request an “equivalent hearing” by noting that on Form 12153.¹³ It covers the same ground but does not suspend levy action, and you lose the right to petition Tax Court afterward.

The 10-Year Collection Deadline

The IRS has 10 years from the date a tax is assessed to collect it through levies or court action.¹⁴ This is the Collection Statute Expiration Date (CSED). Once it passes, the IRS can no longer enforce collection, and any active levy must be released.⁸

Certain actions pause the clock. A CDP hearing request suspends the statute for the entire time the hearing and appeals are pending. Bankruptcy, a pending Offer in Compromise, or living outside the country for extended periods can also toll the period.¹⁴ For debts close to the CSED, that tradeoff matters: a CDP hearing buys time on the levy but gives the IRS more time to collect overall.

1
eCFR. 26 CFR 301.6332-3 – The 21-Day Holding Period Applicable to Property Held by Banks
2
Office of the Law Revision Counsel. 26 USC 6331 – Levy and Distraint
3
eCFR. 26 CFR 301.6331-1 – Levy and Distraint
4
Internal Revenue Service. What if I Get a Levy Against One of My Employees, Vendors, Customers or Other Third Parties
5
Internal Revenue Service. Social Security Benefits Eligible for the Federal Payment Levy Program
6
Internal Revenue Service. IRM 5.11.6 Notice of Levy in Special Cases
7
Office of the Law Revision Counsel. 26 USC 6334 – Property Exempt From Levy
8
Office of the Law Revision Counsel. 26 USC 6343 – Authority to Release Levy and Return Property
9
Internal Revenue Service. IRM 5.16.1 Currently Not Collectible
10
Taxpayer Advocate Service. Currently Not Collectible (CNC)
11
Taxpayer Advocate Service. Submit a Request for Assistance
12
Internal Revenue Service. Collection Due Process (CDP) FAQs
13
Internal Revenue Service. Request for a Collection Due Process or Equivalent Hearing
14
Office of the Law Revision Counsel. 26 USC 6502 – Collection After Assessment