IRS Form 668-A: The 21-Day Hold and How to Stop It

IRS Form 668-A is a one-time levy notice the IRS serves on a third party who holds your money or property, most often your bank, ordering that party to turn the funds over to satisfy an unpaid tax debt. The bank freezes the money the day it receives the notice and must hold it for 21 calendar days before sending it to the IRS. That 21-day window is your entire opportunity to stop the seizure.

What Form 668-A Grabs, and What It Doesn’t

Form 668-A reaches property that someone else is holding for you: bank accounts, accounts receivable owed to you by clients, rental income, brokerage accounts, commissions, royalties, and the cash value of life insurance policies. The authority comes from Internal Revenue Code Section 6331, which lets the IRS seize property without going to court first.¹

The critical feature of a 668-A is that it is a one-time seizure. It takes whatever the third party holds on the date the notice arrives, and nothing more. If your bank receives a 668-A today, the IRS captures the balance sitting in your account right now. Deposits that land next week are not automatically pulled in; the IRS would need to serve a new levy to reach them.²

That is what distinguishes Form 668-A from Form 668-W, the wage levy, which attaches continuously to each paycheck until the debt is paid or the levy is released.² A 668-A hits once; a 668-W keeps hitting.

The 21-Day Hold

When a bank receives Form 668-A, federal regulations require a 21-calendar-day holding period. The funds are frozen but not yet surrendered.³ The window exists so you can contact the IRS and work out a resolution before the money moves.

If nothing happens during those 21 days, the bank must send the funds—plus any accrued interest, up to the levy amount—to the IRS on the first business day after the holding period ends.³ After that, getting the money back is dramatically harder.

Other third parties served with a 668-A do not get the same buffer. A client who owes you money, or a brokerage holding your investments, is generally required to turn the property over promptly.

Property the IRS Can Reach Through a 668-A

Joint Bank Accounts

If you share an account with someone who does not owe the tax—a spouse, a business partner, an elderly parent—the IRS can still levy the entire account. It treats all funds in a joint account as available to satisfy the liable owner’s debt. The non-liable co-owner can request a partial release by proving which funds belong to them, using bank statements and deposit records, but they carry the burden of proof.

Social Security Benefits

Social Security payments are not fully protected. Through the Federal Payment Levy Program, the IRS can take up to 15 percent of your monthly benefit for delinquent tax debt, and that percentage applies regardless of how small the remaining benefit is.⁴

Retirement Accounts

The IRS can levy 401(k)s, IRAs, and similar retirement accounts, but internal rules make it harder. Before touching retirement funds, a revenue officer must confirm 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, internal policy says the account should not be levied. Even when flagrant conduct exists, the IRS must check whether you depend on the funds for basic living expenses.⁵

If the IRS does levy a retirement account, the 10 percent early withdrawal penalty does not apply. The distribution is still taxable income, and the plan administrator will withhold 20 percent for federal income tax.⁵

Property That Is Off Limits

Federal law protects specific categories from levy:⁶

Clothing, schoolbooks, fuel, provisions, furniture, and personal effects up to a set dollar value.
Unemployment benefits paid under federal or state law.
VA disability payments tied to a service-connected condition.
A minimum portion of wages and salary based on filing status and dependents, published annually.

The wage exemption is applied automatically by an employer under Form 668-W. Under a 668-A bank levy, the money is treated as a lump sum rather than ongoing income, so if the seizure leaves you unable to meet basic needs you have to affirmatively request a release on hardship grounds.

How to Stop the Seizure Within 21 Days

The IRS is required by law to release a levy when any of these conditions is met:⁷

The debt is paid in full or the collection period has expired.
Releasing the levy will actually help collection, for example by letting you make installment payments.
You enter an installment agreement under IRC 6159, provided you are current on all required tax filings.
The levy is causing economic hardship, meaning you cannot cover basic living expenses like housing, food, utilities, or transportation to work.
The property seized is worth significantly more than you owe and a partial release will not hurt collection.

Installment Agreement

Setting up a monthly payment plan is the most common way to lift a bank levy quickly. Once the agreement is in place and you are current on filings, release is mandatory under Section 6343.⁷

Currently Not Collectible Status

If you genuinely cannot pay without going without food or shelter, you can request Currently Not Collectible (CNC) status. The IRS will ask you to complete Form 433-A (for individuals) or Form 433-F documenting income and expenses. If the numbers show collection would leave you unable to meet basic needs, the IRS will shelve the debt and release any active levies.⁸ The debt does not disappear; interest and penalties keep accruing, but active collection stops.⁹

Offer in Compromise

An Offer in Compromise lets you settle for less than the full balance. The argument is that the IRS will collect more by accepting your offer than by continuing to chase the full debt. Acceptance triggers release of any outstanding levy. Approval is not easy; the IRS examines income, expenses, assets, and future earning potential before deciding. It is, though, the only route that actually reduces the amount owed rather than just delaying collection.

Taxpayer Advocate Service

If the levy is creating an immediate emergency—eviction, no money for food, loss of essential transportation—and normal channels are not moving fast enough, contact the Taxpayer Advocate Service. TAS is an independent organization within the IRS that can intervene where taxpayers face economic harm. You request assistance by submitting Form 911. TAS has authority to issue a Taxpayer Assistance Order directing the IRS to release the levy while your situation is reviewed.¹⁰

The 30-Day CDP Deadline You May Still Have

Before the IRS issued Form 668-A, it was required to send you a Final Notice of Intent to Levy at least 30 days earlier. That Final Notice gives you 30 days to request a Collection Due Process (CDP) hearing by filing Form 12153.¹¹ Filing on time does two things: it suspends levy action 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.¹¹

Miss the 30 days and you can still request an “equivalent hearing” by checking that box on Form 12153.¹² 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 Limit

The IRS has 10 years from the date a tax is assessed to collect it through levies or court proceedings.¹³ This is the Collection Statute Expiration Date, or CSED. Once it passes, active levies must be released.⁷

Certain actions pause that clock. Filing a CDP hearing request suspends the statute for as long as the hearing and any appeals are pending. Filing for bankruptcy, requesting an Offer in Compromise, or living outside the country for extended periods can also toll the 10-year period.¹³ For debts already close to the CSED, this is a real tradeoff: requesting a CDP hearing buys you time on the levy but gives the IRS more time to collect overall.

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