Client paying back federal taxes on an installment agreement has recently had his bank account levied for past due New York taxes and now can't make federal installment agreement payment

Hello,
Thank you in advance for any help.
Here is what's going on -
Client is a somewhat successful self-employed real estate agent who never made her estimated tax payments for several years to the IRS or New York. She owes $100,000+ in federal taxes and $40,000+ in New York taxes and now lives in New Jersey.
After a lot of teeth-pulling, I prevented the IRS from levying her bank account and real estate commission checks and worked out a federal installment agreement where she pays $5000 per month. She had not told me, however, about the taxes owed to New York, that would have been nice to know about. She set up a bank account expressly for the purpose of paying her federal tax installment payments and didn't think New York would find it because she opened it at a New Jersey bank (faulty logic, I know). New York found out about the bank account and took all the money intended for her federal installment payment, applying it to the $40,000 she owes New York.
Two questions here -
1. What can we do to beg the IRS for mercy here?
2. Now that New York has "caught up" to my client, is there some sort of "Currently Not Collectible" status (similar to the IRS) we can get her into with New York to at least prevent any more levying until her financial situation improves? I inquired with the IRS Revenue Officer about reducing the monthly payment so she can get an installment agreement with New York but the officer claims that federal taxes take priority over state taxes (but I'm not certain that is really true).
Any help appreciated!
---Chris Johnson, EA
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