Being a former IRS Agent, this question and discussion comes up about once a week.
There is a lot of confusion about the IRS Bank Levy and how much the IRS can take as well as, when does the bank have to release those funds.
This this article serve to clarify the confusion that exists about this situation. You can find this information at IRS IRM 5.11.4.3 in case you must present this to banks or financial institutions who usually have no clue about the law in this area
The relative questions that exist in this area:
 

How much must be surrendered  to the IRS when the bank receives the levy?

 
The financial institution or bank  must surrender  the amount in the taxpayer’s bank account checking or saving accounts.  A 668A (c) bank levy  or garnishment attaches to any property or rights to property.
The bank or financial institution may send no more than the amount listed on the federal tax levy.
This seems obvious but some banks have been known to send the entire amount in the bank account at the time in the levy.
It is important to note that the IRS may take such enforcement action only after a Federal Tax Lien has been filed against the taxpayer.
2. How long is the bank required to hold in money for before turning it over to the IRS?
The bank is required by law to hold the money or funds in the account for a period of 21 days. The reason for this is simple.
It gives the taxpayer time enough to clear up the problem and get the tax levy released.
3. How does the bank determine when and how much to give the IRS?
When the Notice of Levy is received by the bank, that is the cut off period.  It is that day only. Money deposited later is cannot be given to the Internal Revenue Service.
Another tax levy  ( 668A(c) must be served to garnish these funds . Also, the levy only reaches deposits that have cleared and are available for the taxpayer to withdraw.
As side note or caution to the bank or financial institution. Levy proceeds must not be reduced by any fee charged by the bank for processing the levy.