Tax Lien vs. Tax Levy: Knowing the Difference Between the Two

On: January 1, 2024

If you have never owed the IRS money before, the terms tax lien and tax levy are probably new to you. These two terms describe different actions that the IRS can take to collect on a debt that you owe them. 

Tax liens and levies are serious things and they can cause a lot of financial hardship, so you want to avoid them at all costs. Knowing what each one is will help you better understand what to expect. 

If you find yourself in a situation where you have received notice of a tax lien or levy from the IRS, it is time to contact an IRS tax expert. At Leading Tax Group, we know exactly how to handle the IRS and can even stop liens and levies that have been placed against you. 

What is a Tax Levy?

An IRS tax levy is a type of legal action that the IRS is able to take against you. This action allows the IRS to seize your assets and property. The IRS does not resort to this type of collection method right off the bat and will use it when other methods have been unsuccessful. 

A levy can be placed on all of the different assets that you do own. This can include checking and savings accounts, accounts receivable, and even retirement accounts. You can also have your income seized in the form of wage garnishment. If you own additional property, you can have a levy placed on your vehicle, home, or business equipment. 

What is a Tax Lien?

Tax liens are often thought of as the same thing as a levy, but they are different. Tax liens place a claim on your property or assets. What this means is that the property and assets you own become collateral. Therefore, if you sell any of these assets or property, the IRS will receive the funds first to apply them to your owed tax debt. 

Tax liens are public records, which means they are searchable by the public and will show up as a claim against you or your business. 

Are Levies and Liens Similar to Each Other?

Yes. In either situation, all of your creditors will be informed about the action placed against you. Therefore, they can comply with the law and IRS on their end. 

Can a Tax Lien or Levy Be Stopped?

Yes. However, it is difficult to do it on your own. If you plan to fight a tax levy or lien, it is recommended that you hire a tax accountant or professional to assist you. The IRS will not stop a levy or lien simply because you ask them to. You must qualify for another arrangement with them such as an Offer In Compromise or payment arrangement. 

There are options available to taxpayers that allow them to make affordable payments toward their tax liability and debt. 

Leading Tax Group Can Help You Release a Tax Levy or Lien 

Tax levies and tax liens are two different collection actions that the IRS can take against you, but both are serious and involve your assets and property. 

To recap, in a levy, the IRS will seize your assets and property and with a lien, the IRS will place a claim on your assets and property. 

Fighting a tax lien or tax levy is possible and can be done but it can be quite difficult, especially if you try to do it alone. Hiring an experienced tax expert is the right choice. 

At Leading Tax Group, our team of experienced tax professionals is well-versed in tax levies and liens and can assist you in getting one stopped and setting up a new arrangement to pay off your tax debt. 

Don’t try to tackle a tax levy or lien on your own and reach out to the team at Leading Tax Group today for assistance. We are here to help you with your tax matter!