TL;DR: A tax lien is a claim against your assets and property. A tax levy is the result of an unpaid tax lien. You will receive an official letter from the IRS asking you to pay the taxes outstanding before the lien is put in place. This guide explains who qualifies, the rules that apply, and how to apply them to your situation.

A tax lien is a claim against your assets and property. A tax levy is the result of an unpaid tax lien. You will receive an official letter from the IRS asking you to pay the taxes outstanding before the lien is put in place.

A tax lien serves as a notice that if you do not pay, you will face a tax levy. When the government seizes your property and assets to settle a tax lien, this is known as a tax levy. Speak to our IRS Fresh Start Program tax professionals if you have any more questions or concerns about tax liens, tax levies, and all tax-related situations.

Tax Liens & Tax Levies

The tax terminology between tax liens and levies is often used interchangeably but they’re distinctly different from each other. A tax lien is a document filed by the IRS to safeguard the government’s authority to collect money, whereas a tax levy involves the forced collection of taxes, usually by seizing funds from a bank account or paycheck.

When a property is sold, a lien is placed on it to ensure that the IRS is paid. To collect a tax debt, a levy seizes the property.

How To Prevent A Tax Lien

Before a lien is filed by the IRS, you can prevent it by paying the tax fully but that’s not always possible for all taxpayers. If you are unable to pay the full amount in one large sum, you can prevent liens by setting up an installment agreement with the IRS that meets the specific requirements. The IRS won’t file a tax lien if a person sets up a guaranteed installment agreement.

Withdrawing A Tax Lien

Withdrawing is one way to remove a tax lien. The IRS will withdraw a federal tax lien if it was determined to be filed in error such as when the wrong taxpayer is targeted for a debt. If you’re ever in a situation where you get filed a tax lien, contact the IRS as soon as you can so an IRS agent is able to review your account and prepare the necessary paperwork to begin withdrawing.

Releasing is the other common way to remove a tax lien. When a federal tax lien is released, the property is no longer burdened by the lien.

Resolve Your Tax Bills

If you have the ability to pay off your tax liens, you should do so because if you don’t, the IRS has the right to seize your assets and potentially take the next step and file a bank tax levy. Talk to a tax professional at IRS Fresh Start Initiative and get help right away to prevent any potential tax-related problems. For taxpayers who may have difficulty paying off an excessive amount of tax debt, there’s a relief program that consolidates many major relief programs into a one-size-fits-all assistance program; The IRS Fresh Start Program.

It’s a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program. Any issues regarding back taxes, unfiled years, or any other tax-related problems may be solved through one program; the IRS Fresh Start Program!