Tax Lien vs Tax Levy
What It Is:
A legal claim against all your property (real estate, personal property, and financial assets) as security for your taxes.
What It Does:
- • Protects the government's interest in your property
- • Appears on your credit report
- • Makes it difficult to sell or refinance property
- • Gives IRS priority over other creditors
When It Happens:
- • You owe taxes and don't pay
- • IRS sends Notice and Demand for Payment
- • You neglect or refuse to pay within 10 days
What It Is:
The actual seizure of your property to satisfy your tax obligation. The IRS can take your wages, bank accounts, and other assets.
What It Does:
- • Seizes wages, bank accounts, or property
- • Continues until tax is paid or becomes uncollectible
- • Can garnish up to 75% of wages
- • Can empty bank accounts
When It Happens:
- • After lien is filed
- • IRS sends Final Notice of Intent to Levy
- • 30 days after final notice
Types of IRS Levies
The IRS contacts your employer to garnish your wages until your tax balance is paid.
The IRS freezes and seizes funds from your bank accounts to satisfy your taxes.
The IRS can seize and sell your real estate, vehicles, and other valuable property.
How to Stop Collection Actions
Pay in Full
The fastest way to stop collection actions is to pay your tax balance in full.
- Stops all collection actions
- Releases liens and levies
- Restores good standing
Set Up Payment Plan
Establish an installment agreement to pay your tax over time.
- Stops new collection actions
- May not release existing levies
- Must stay current on payments
Offer in Compromise
Settle your taxes for less than the full amount owed if you qualify.
- Stops collection during review
- May settle for pennies on dollar
- Strict qualification requirements
Currently Not Collectible
Request hardship status if you cannot pay due to financial hardship.
- Temporarily stops collection
- Must prove financial hardship
- Subject to periodic review
Appeal or Collection Due Process
Challenge the collection action if you believe it's incorrect or inappropriate.
- Stops collection during appeal
- Must file within 30 days
- Requires valid grounds for appeal
Act Immediately If:
- • You received a Final Notice of Intent to Levy
- • Your wages are being garnished
- • Your bank account was frozen
- • You received a seizure notice
- • Your property is scheduled for auction
Don't Wait Because:
- • Collection actions can happen quickly
- • Some options have strict deadlines
- • Delays can result in asset seizure
- • Professional help improves outcomes
- • Early action provides more options