Your business bank account is frozen.

• 1. Save every page of the notice today. Record the date, the case number or levy number, the last four digits of the account, what still works, and any date the notice prints. If it prints no date, ask in writing. Do not invent one.
• 2. Name the event from the words on the page. A source-of-funds or KYC review, a closure, and an IRS bank levy are different files. Do not send the bank a tax story, and do not send the IRS a stack of customer invoices unless the levy notice asks for them.
• 3. Write down every payment that still points here: payroll, payroll taxes, rent, loans, processor deposits, and vendor ACH. The restricted balance is not money you can assign to those bills.
• 4. If the bank asked for documents, build one indexed packet for that request: the entity, the owners, and the specific deposits named. Send it once through the channel in the notice. The KYC guide is the checklist for that packet.
• 5. If the notice is a closure, open the backup account while any appeal is still pending. The FDIC's moving-banks article says setting up direct deposit at a new bank may take several weeks, that each company has to be told to move an automatic payment, and that bank bill pay can take a few days. It also says not to close an old account until the withdrawals have posted. If the bank already closed it, follow the notice you have.
• 6. The CFPB's checking-account answer says a bank or credit union can close an account without your permission. It says that is most likely after bad checks, when the balance will not cover fees, or when an account has been dormant for a long time, generally years. It also says some states may require notice. That page does not give one national deadline. Use the date on your notice, and read the account agreement.
• 7. If the hold is an IRS levy, call the phone number on the levy. The IRS bank-levy page says funds are frozen as of the date and time the levy is received, that the law provides a 21 day waiting period so you can contact the IRS, and that money you add after the levy date is normally not part of that levy. A wage levy that creates an immediate economic hardship must be released. A bank levy that creates an immediate economic hardship may be released. Have the bank's fax number ready. A release does not erase the tax.
• 8. Do not invent invoices, ownership records, or a hardship story. Do not move money around just to look busy. Get the next step in writing, and keep payroll on cash you can still use.

The free business bank account frozen guide walks through the first 48 hours, the payment-rail map, and the one reply to the bank.

If the notice is a document request, build the packet with the bank KYC and source-of-funds guide, then send it once through the channel the bank named.

What a bank may do is in The bank closed my checking account. Can it do that?. The CFPB says yes, a bank or credit union can close your account without your permission. It says that is most likely if you have written bad checks or do not have enough in the account to cover fees, and that banks may also close dormant accounts after a substantial period with no activity, generally years. It says some states may require notice before closure. That page does not set a response deadline for a business account that is frozen, under review, or asked for source-of-funds documents. Use the date on your notice. This hub is not legal or banking advice.

Moving the payment rails is covered in Thinking About Moving to Another Bank?. The FDIC says setting up direct deposit at a new bank may take several weeks, so plan ahead. If a company withdraws a bill from the old account, you may need to tell that company to use the new account. Bank online bill pay can take a few days to change. The article says to watch the old account during the move so a bill is not missed, and not to close the old account until checks, debit card payments, and other withdrawals have posted. Confirm a bank on FDIC BankFind before you send records to a new site. The article is about a move you choose. It does not require a bank to reverse a freeze or a closure.

An IRS bank levy is explained in Information about bank levies. The IRS says the Internal Revenue Code provides a 21 day waiting period on a bank levy so you can contact the IRS, arrange to pay, or point out an error. Funds in the account are frozen as of the date and time the levy is received. Normally, money you add after that date is not part of the levy. Levies are generally delivered by mail. Call the number on the levy. This page does not say the bank must release operating funds because payroll is due. The IRS decides.

Hardship is explained in What if a levy is causing a hardship. The IRS says to call the number on the levy or the correspondence immediately and explain the financial situation. If a wage levy creates an immediate economic hardship, the levy must be released. If a bank or other account levy creates an immediate economic hardship, the levy may be released. Economic hardship means the IRS has determined the levy prevents you from meeting basic, reasonable living expenses. The IRS will usually need financial information. Have the fax number for the bank that has the levy. A release does not mean the balance is forgiven. The IRS decides.

When a release is required is in How do I get a levy released?. The IRS says to contact them immediately to resolve the tax and request a release. A release is required if the IRS determines that you paid the amount you owe, the collection period ended before the levy, releasing the levy will help you pay, you enter an installment agreement whose terms do not allow the levy to continue, the levy creates an economic hardship, or the property is worth more than the amount owed and releasing it will not hinder collection. Economic hardship means the levy prevents you from meeting basic, reasonable living expenses. If the IRS denies the release, you may appeal. After the proceeds have been sent, you may file a claim to have them returned. A release does not erase the balance, and a levy may be issued again. This hub is not tax or legal advice.