The IRS can use a bank levy to get the attention of a taxpayer in an effort to move them back into the tax payment system. Bank levies are never used without prior notification. In fact, they are typically a last resort for IRS agents. A bank levy attaches to a bank account for up to one day. It can literally empty a bank account of all available funds up to the total amount of taxes due. In addition, bank charge fees upwards of $100 for each levy.

The IRS is required to send the taxpayer a "Final Notice of Intent to Levy" prior to actually initiating the levy and must wait at least 30 days from the date the notice is sent before initiating the levy. While this means that a bank levy shouldn’t come as a surprise, the reality is that it can be a horrifying experience to find a bank account balance drop to zero literally overnight.

Once the levy is placed, the bank holds the funds in suspension for 21 days before sending the money to the IRS. This means that a timely response is essential if a taxpayer is to have any hope getting their funds released.

If a tax issue escalates to this level, the IRS has taken a hard line with a taxpayer who they feel is severely out of compliance. While waking up to find the entire contents of a bank account gone in an instant can be devastating, the reality is that there are things that can be done.

The IRS policy is that it does not release levies. However, the reality is that bank levies are released every day for situations where there is a legitimate hardship.

While pursuing the release of a levy can feel like an uphill battle, working with a qualified, experienced tax professional can greatly improve the chances of success. The reason goes back to the root motivation of the levy: the IRS wants to bring delinquent taxpayers back into compliance. Individuals and businesses that hire trained professionals to work on their behalf show a legitimate interest in getting back on track. The second reason is that because a CPA or other tax professional understands the tax code and has worked with IRS and state tax agents over the years. They understand what requests to make and how to make them.

Policy being what it is, the IRS agents have broad authority in this situation to review cases and evaluate what constitutes a hardship. A qualified professional should have the knowledge of how to present a compelling case, using payment plans, an offer in compromise and other strategies in order to secure a full or partial release.

Remember, too that the tax levy is a tool used to attempt to bring a delinquent taxpayer back in line. Establishing an agreement to repay taxes can prevent future bank levies and, when done properly, can go a long way toward getting a bank levy released.

Taxpayers facing a bank levy should contact a company that specializes in tax debt issues. A good company will have a mix of tax professionals on staff including CPAs (certified public accountants), EAs (enrolled agents) and attorneys who can act quickly to stop the bank levy and establish an agreement that prevents the IRS from taking further action.