LP68 Notice: The IRS Released Its Levy

What LP68 means

The IRS page for this notice says it “tells you we released the notice of levy sent to you about the taxpayer named in the notice.” The Internal Revenue Manual (IRM), the IRS’s staff rulebook, titles it “We Released The Taxpayer Levy” (IRM Exhibit 5.19.5-2).

You got LP68 because the IRS had sent the levy to you: an employer, a bank or another person or business that held money or property for the taxpayer. The letter is about that person’s taxes, not yours.

What changes when you receive it

The IRS page says: “You no longer must turn over any money, property, or rights to property belonging to this taxpayer. The levy release is effective immediately upon your receipt.”

So the day you receive LP68 is the line. From then on, you handle the taxpayer’s pay or account as you would without a levy. This matters most for an employer: the IRS guide for employers and other third parties says a wage levy keeps attaching to pay until the IRS releases it.

The IRS page says you need to take no other action. You don’t need to contact the IRS about the release, and you can tell the taxpayer you received it.

Why the IRS releases a levy

LP68 does not say why the IRS released the levy, and you do not need to know. The law lists the reasons. IRC 6343(a)(1) requires the IRS to release a levy, and to promptly notify the person who received it, when nothing remains owed or the time to collect has run out, when a release will help the IRS collect, when the taxpayer enters an installment agreement unless the agreement says otherwise, when the levy creates an economic hardship for the taxpayer, or when the property is worth more than the debt and a partial release would not hinder collection.

A release does not end the IRS’s rights for good. IRC 6343(a)(3) says a release does not prevent a later levy on the same property. The IRS manual uses LP68 for a full release and a separate form for a partial one (IRM 5.19.4.4.10).

What people mistake LP68 for

Some recipients think LP68 means they must ask for money back from the IRS, or must refund the taxpayer. The IRS page says nothing of the kind. It says the release takes effect when you receive it and that you need to take no other action.

Others read LP68 as a sign the taxpayer no longer owes anything. The notice does not say that. Under IRC 6343(a)(1), the IRS also releases levies for other reasons, such as an installment agreement or a hardship.

And some keep holding the money out of caution. The IRS page says you no longer must turn over the taxpayer’s money or property once you receive LP68.

For practitioners: what to check first

If your client is the levy source, match LP68 to the right levy. IRM 5.19.4.4.10 reminds IRS staff to watch for more than one levy at a time and release all of them, so confirm which levy this LP68 names.

If your client is the taxpayer, a release sent to one source does not mean every levy ended. Check each employer, bank or other source that received a levy.

If the levy source also got an LP59, the IRS letter that follows up on an unanswered levy, call the number on the notice to confirm what, if anything, the source still owes for the period before the release.

Common Questions