IRS Continuous Levy on Federal Contractors:
100% of Each Payment. Zero Left for You.
The IRS Federal Payment Levy Program can seize 100% of your federal contract payments — not just a percentage. Every payment intercepted until your tax debt is paid in full. This will kill your business. Act today.
🏛️ Why 100% — Not Just 15% or 25%
Federal law treats wage earners and federal contractors differently. Wage levies are limited by exemption amounts designed to preserve basic living expenses. Federal contract payments have no such protections — the FPLP can intercept the full payment amount.
This means if you receive a $50,000 contract disbursement and have an active FPLP levy, the Treasury intercepts the entire $50,000. You receive $0. Your employees, vendors, and overhead do not get paid. Your business may not survive the next pay period.
The FPLP levy is continuous — it applies to every future federal payment until released. One tax attorney call can stop this.
🚫 What NOT To Do
Do NOT try to route contract payments around the levy
The FPLP operates at the Treasury level. All payments from federal agencies run through the same system. There is no legitimate way to bypass it — and attempting to do so may constitute tax obstruction.
Do NOT wait for the next contract payment before acting
The levy applies to every future payment automatically. Each day you wait is another contract payment intercepted. Get representation now.
Do NOT call the contracting agency for help
Federal agencies are required by law to honor IRS levies. They cannot and will not help you release the levy — only the IRS can do that.
Do NOT use a non-attorney to negotiate
A federal contractor levy affects your livelihood and potentially your ability to perform on contracts. You need legal counsel, not a tax enrollment agent.
Do NOT assume paying partial amounts will release the levy
Partial payments without a formal arrangement do not release an FPLP levy. A formal installment agreement or other resolution is required.
The Brightside 5-Step Contractor Levy Release
Emergency Consultation Today
Call 914-214-9127. We assess the levy, your tax debt, your contract status, and identify the fastest resolution path.
Immediate Representation
We file Form 2848 and contact your assigned IRS Revenue Officer directly. You stop communicating with the IRS.
Resolution Package Prepared
We prepare an installment agreement, OIC, or CNC proposal — whichever is most favorable — and submit it to the IRS immediately.
Levy Release Issued to Treasury
Once the IRS approves the resolution, they issue a levy release notice to the Treasury Department. Intercepted payments resume flowing to you.
Contract Protection
We document your resolution for any SAM.gov or agency concerns and ensure your contracting status is protected throughout the process.
Your Business Cannot Survive This. Call Now.
Free consultation. A licensed Brightside tax attorney responds within 5 minutes during business hours.
Frequently Asked Questions
Can the IRS take 100% of my federal contract payments?+
Yes. Federal contractors are subject to the Federal Payment Levy Program (FPLP) under IRC § 6331(h). Unlike wage levies — which are capped at a percentage leaving you an exempt amount — federal contract payments can be levied at 100% of each payment. The IRS electronically intercepts contractor payments through the Treasury Department before they reach you. Your entire payment — every single disbursement — can be seized until the tax debt is satisfied.
How does the IRS find out about my federal contract payments?+
Federal agencies are required to check the IRS FPLP database when processing payments. Any contractor with an unpaid federal tax debt that the IRS has flagged for continuous levy will have payments intercepted automatically at the Treasury level. There is no need for the IRS to serve a separate levy for each payment — one FPLP entry covers all future federal payments.
Will I lose my federal contracts if the IRS levies my payments?+
Potentially, yes. Federal agencies may view tax delinquency — especially if it results in inability to perform on contracts — as grounds for termination or non-renewal. Additionally, the System for Award Management (SAM.gov) database includes tax compliance checks. A tax attorney can help you resolve the underlying debt while protecting your contract status, as fast resolution demonstrates good faith compliance.
How do I stop the IRS from taking my federal contract payments?+
You must resolve the underlying tax debt or establish a resolution arrangement. Options include: entering an installment agreement (which requires release of the FPLP levy), establishing Currently Not Collectible status, filing an Offer in Compromise, requesting a Collection Due Process hearing, or demonstrating economic hardship. A tax attorney can execute the fastest applicable path and directly contact the IRS to expedite a levy release notice to Treasury.
I am a business, not an individual — can the IRS levy my business's federal contract payments?+
Yes. The FPLP applies to businesses as well as individuals. If your business has unpaid employment taxes (941 payroll taxes), income taxes, or other federal tax obligations, the IRS can intercept your business's federal contract payments. Business tax levies are particularly urgent as they can immediately threaten the viability of your federal contracting operations.
How fast can Brightside get a federal contractor levy released?+
In many cases, Brightside can negotiate a levy release within 24–72 hours of retention. We file Form 2848 immediately, contact the assigned IRS Revenue Officer, and present a resolution proposal. Once the IRS issues a levy release, Treasury will stop intercepting payments. The sooner you call, the faster we can act.
Don't Let the IRS Shut Down Your Federal Contracting Business
Free consultation. A Brightside tax attorney will review your FPLP levy and identify the fastest release path.