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The Difference Between an IRS Lien and an IRS Levy

You have owed a significant tax debt for some time now. Thus far you have not received any threatening notices from the IRS; however, anxiety builds every time you check the mail. Then one day that anxiety becomes a reality. You receive a notice of federal tax lien from the IRS and your heart sinks. The thoughts of financial ruin start to creep up; “Will they take my house, my bank accounts, and my retirement?”

Most people confuse a tax lien with a tax levy. A levy is a legal seizure of your property to satisfy some or all of your tax debt. A lien, however, is a legal claim against your property. A lien secures payment of some or all of your tax debt when the property is sold; while a levy actually takes your property to satisfy the tax liability.

The IRS will place a federal tax lien against you when you neglect to pay a tax liability in full. Depending on the amount, the IRS will still place a tax lien against you even if you are under a payment plan. The IRS files a Notice of Federal Tax Lien, which is a public document, to alert other creditors that the government has a legal right to your property. You do have the right to appeal the filing of the lien. The Notice of Federal Tax Lien includes a form to appeal the lien. You have 30 days to file the appeal.

If you are having a federal tax lien or need more information, please contact our office.

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