Part Two: IRS Returns $55,043.56 Under IRC §6343(d)

By Allen Lenth, EA-MBA | Executive Tax Solution | Sachse, Texas

Certain taxpayer-identifying details have been omitted or modified to protect confidentiality. The events described are based on an actual Executive Tax Solution representation matter.

Part One of this case described how SouthState Bank refused to accept an IRS-issued Form 668-D directly from Executive Tax Solution and ultimately surrendered more than $50,000 to the IRS despite an already-approved hardship release.

This is the update our clients and colleagues have been asking about: the money came back.

Executive Tax Solution submitted a formal written Administrative Request for Return of Levied Property under IRC §6343(d). Within days, the IRS agreed. The full $55,043.56 was returned.

The IRS Had Already Released the Levy — SouthState Refused to Honor It

To recap briefly: IRS Collections approved Currently Not Collectible status based on documented economic hardship and authorized release of the bank levy. The IRS issued a full Form 668-D, Release of Levy/Release of Property From Levy. Direct IRS-to-bank fax transmissions failed, so the IRS transmitted the release to Executive Tax Solution as the taxpayer’s authorized representative, and we forwarded it immediately to SouthState’s Legal Process Department.

SouthState declined to act on it. The bank’s stated internal policy required the release, or verbal confirmation, to come directly from the IRS — even though its own representative acknowledged the bank had a longstanding history of failing to successfully receive IRS faxes. IRS call-center personnel advised they were not able to place outgoing calls to the bank, and a managerial callback was estimated at 24 to 48 hours. That window did not hold. SouthState surrendered the funds to the IRS before the direct confirmation could be arranged.

In our view, a bank’s internal transmission preferences should never override a levy release the IRS itself had already issued and authorized. That is precisely the argument we made next — not through more phone calls, but in writing, directly to the IRS office holding the money.

The Administrative Request Under IRC §6343(d)

Once the funds reached the IRS, the case stopped being about persuading SouthState and became about persuading the IRS to return proceeds it should never have received in the first place.

Executive Tax Solution submitted a written Administrative Request for Return of Levied Property under IRC §6343(d) and IRS Publication 5149, addressed to IRS Collection Advisory. The letter laid out the sequence in plain terms:

• The IRS had already approved Currently Not Collectible status based on documented economic hardship.
• The IRS had already determined the levy should be released.
• The IRS had already issued the Form 668-D — a completed, dated, government-generated release, not a request or a hope that one would follow.
• The $55,043.56 reached the IRS only because that already-issued release was never successfully processed by the bank before the surrender deadline.

The letter argued that retaining the funds would perpetuate the exact hardship the IRS had already found to exist, and that allowing the government to keep property it had formally determined should no longer be subject to levy created an inequitable result IRC §6343(d) exists to correct. It requested expedited manual-refund processing given the hardship finding already on record, and asked IRS Collection Advisory to coordinate with the Taxpayer Advocate Service, which was already involved in the case, on an expedited refund.

The Result: Full Refund in Under 10 Days

The IRS agreed. The full $55,043.56 was returned to the taxpayer — a 74-year-old retired client in the Wylie, Texas area — within roughly ten days of the written request going in.

This is worth sitting with for a moment. The money had already left the bank. It had already been received and applied by the IRS. Getting frozen funds released before a bank surrenders them is one kind of fight. Getting the government to voluntarily hand back money it has already collected is a different and generally much harder one. It happened here because the administrative record was airtight: the hardship determination, the CNC approval, and the dated Form 668-D all existed before the surrender, which left the IRS very little room to argue the levy proceeds were properly retained.

We’re not aware of anyone at SouthState issuing a formal apology, but the bank representatives we dealt with later in the process were visibly aware of how the file had unfolded — an IRS-approved release, refused on an internal technicality, followed by the IRS itself reversing course and returning funds the bank had insisted on surrendering.

What This Case Teaches Taxpayers

1. A levy release you can’t get processed isn’t the end of the road. If a bank surrenders funds despite an IRS-approved release, IRC §6343(d) provides a path to get them back.
2. Put it in writing. A written administrative request that lays out the hardship finding, the CNC approval, and the dated release document gives the IRS a clean administrative record to act on — faster than repeated phone calls.
3. Documentation is what wins these cases. Every form generated along the way — the 2848, the 433-F, the 911, the 668-D itself — became part of the evidence that the levy proceeds should never have been retained.
4. Don’t assume a bank’s internal policy is the final word. Financial institutions can and do refuse to honor IRS-issued releases over internal transmission preferences. That refusal doesn’t end a taxpayer’s options.

Need Help With an IRS Bank Levy in North Texas?

If a bank has surrendered levy proceeds to the IRS despite a hardship determination, release, or other collection alternative already being in place, a written request under IRC §6343(d) may be able to recover those funds.

Allen Lenth, EA-MBA
Executive Tax Solution — Your Tax Defense Team
Sachse, Texas
Phone: (469) 262-6525
IRSDecoder.com

Frequently Asked Questions

Can the IRS return money after a bank has already sent it in?

Yes, in appropriate circumstances. IRC §6343(d) authorizes the IRS to return levy proceeds where, among other grounds, the levy was not in accordance with administrative procedures or return of the property would be in the best interest of the taxpayer and the government.

How long does an IRC §6343(d) request take?

There’s no fixed statutory timeline, and every case depends on its own facts and documentation. In this case, the written request was resolved in favor of the taxpayer in under ten days — but that outcome reflected a case where the hardship finding, CNC approval, and dated levy release already existed in the IRS’s own file before the funds were surrendered.

Does a §6343(d) request work if the IRS never approved a release before the money was sent?

It can still be evaluated, but the analysis is different. Cases are strongest when the administrative record already shows the IRS had determined a release was appropriate before the funds were collected.

What documentation supports a §6343(d) request?

The Form 2848, the financial disclosure supporting the hardship finding (Form 433-F), any Taxpayer Advocate Service filing (Form 911), the levy documentation itself, and — where one exists — the dated Form 668-D release.

Is this case over?

No. The refund resolved the immediate levy-proceeds dispute, but the underlying tax liability remains, and the case continues toward a longer-term resolution, which may include an Offer in Compromise once filing compliance is fully restored.

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About Executive Tax Solution

Allen Lenth, EA-MBA | Executive Tax Solution | Your Tax Defense Team

Executive Tax Solution is based in Sachse, Texas, and represents taxpayers throughout Sachse, Garland, Wylie, Rowlett, Murphy, Dallas-Fort Worth, and surrounding North Texas communities.

📞 (469) 262-6525
📱 (469) 252-8832
🌐 www.executivetaxsolution.com
📍 7214 S State Hwy 78, Suite 25, Sachse, TX 75048