IRS Tax Levy Vs. Lien

Both the International Revenue Service (IRS) and state tax agencies use levies and liens when taxes are unpaid. Both Levies and Liens are unpleasant to deal with. Ideally the tax debt should be dealt with before a tax levy or lien is in effect.

What is the difference between a Levy and a Lien?

Both tax levies and tax liens are tools used by governments to collect overdue taxes, but they represent different stages and methods of collection. A tax levy is a legal action taken by a government agency, such as the Internal Revenue Service (IRS) in the United States, to collect unpaid taxes directly from a taxpayer’s assets or property. When a tax levy is imposed, the government seizes specific assets owned by the taxpayer to satisfy the outstanding tax debt. These assets can include bank accounts, wages, real estate, vehicles, or other valuable property. A tax lien is a legal claim placed on a taxpayer’s property by a government agency as a security interest for unpaid taxes. When a tax lien is filed, it becomes a public record and serves as a notice to potential creditors that the government has a claim against the taxpayer’s property. The lien ensures that if the taxpayer sells or transfers the property, the government will have a right to collect the owed taxes from the proceeds of the sale. In essence, a tax lien doesn’t involve the immediate seizure of assets like a tax levy does. Instead, it creates a legal encumbrance on the taxpayer’s property, making it more challenging for them to sell or refinance the property without addressing the outstanding tax debt.

How does the IRS use Levies and Liens?

In most cases the IRS will not issue a lien unless a taxpayer owes more than $10,000 in unpaid taxes, penalties, and interest. In the case that the IRS or state revenue agency does file a lien, the lien will be filed with your county recorder or the Secretary of State, and it attaches to your current and future assets. The IRS will issue levies when they believe that there is no other way to collect the taxes owed. A levy is when the IRS will take your money from either your wages or bank accounts, without your consent.

Are You Burdened By Tax Debt?

Have you received a notice of levy or lien? Are you having trouble paying back your tax debt? At CuraDebt Tax, we have a team of tax professionals who are able to find the best IRS resolution available to you. Contact us to better understand your tax problems and to choose the best IRS resolution option. CuraDebt has been connecting individuals and small businesses with vetted debt relief partners for over 25 years nationwide. As of May 2023 CuraDebt received a score of 5 out of 5 on CustomerLobby for a total of 1,600+ five-star reviews. CuraDebt is an Accredited Member of the American Association for Debt Resolution (AADR). Contact us for a free consultation. 1-877-999-0486. Take advantage of exploring another option for free. Not only do we connect you with vetted partners for tax relief, we also offer debt relief.

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