If you’re searching for answers about IRS tax liens or IRS tax levies, you’re not alone. Many individuals and businesses find themselves suddenly facing an IRS Notice of Federal Tax Lien or a Final Notice of Intent to Levy and are unsure what it means, when these actions are taken, or whether they need to hire a tax lawyer. Understanding the difference between a tax lien and a tax levy, how the IRS collection process works, and how a tax attorney can help is critical to protecting your property, finances, and peace of mind.
What Is an IRS Tax Lien and IRS Tax Levy?
Before you can properly address your situation or know if you should contact a tax lien lawyer or tax levy attorney, it’s important to understand the difference between these two IRS collection tools:
IRS Tax Lien:
A tax lien is a legal claim by the government against your property due to unpaid tax debt. The IRS files a federal tax lien to secure its interest in everything you own—your home, vehicles, business assets, and even future property or income. The lien does not mean your assets are immediately taken, but it can severely limit your ability to sell, refinance, or use your property as collateral.
IRS Tax Levy:
A tax levy is the actual seizure of your property to satisfy a tax debt. Once the IRS issues a levy notice, they can withdraw funds from your bank account (IRS bank account levy), garnish your wages (IRS wage garnishment), or seize and sell other property. Unlike a lien, which is a claim, a levy is a collection action. For more details, visit our Tax Collections page.
When Does the IRS File a Lien or Issue a Levy?
The IRS Collection Process
Both IRS tax liens and IRS tax levies are used by the government to collect unpaid taxes, but they aren’t immediate. The IRS follows a process that gives you opportunities to resolve the debt before a lien or levy is placed. Learn more about tax assessments and collections.
When Does the IRS File a Tax Lien?
A federal tax lien is typically filed when:
- The IRS has assessed a tax debt.
- You’ve received a Notice and Demand for Payment.
- You fail to pay within 10 days.
The IRS Notice of Federal Tax Lien is filed in public records, alerting other creditors that the IRS now has a legal right to your property. Tax liens can affect your home, vehicles, business property, and future assets. In many cases, the IRS files a lien when your debt is above $10,000, but they can do so for smaller amounts if they deem it necessary.
Businesses may also face tax liens that disrupt operations or make it difficult to obtain business loans.
When Does the IRS Issue a Tax Levy?
A tax levy is more aggressive and involves actual seizure of assets. Before the IRS can issue a levy, they must:
- Assess your tax debt and send a bill.
- You fail to pay or resolve the debt.
- The IRS sends a Final Notice of Intent to Levy and Notice of Your Right to a Hearing (at least 30 days in advance).
IRS levies may include:
- IRS wage garnishment (taking a portion of your paycheck)
- IRS bank account levy (seizing funds from your bank account)
- Seizure of property (homes, cars, business assets)
- Garnishment of Social Security benefits
Ignoring IRS notices almost always leads to a levy. The IRS may also move more quickly if they believe collection is at risk.
The Impact of IRS Tax Liens and Levies
To understand how a tax lien or levy can impact your financial future, explore our guide to tax analysis.
How Does an IRS Lien Affect You?
- Credit and Loans: A federal tax lien can devastate your ability to qualify for loans or new credit. Even though tax liens no longer appear on major credit bureau reports, they are public record and can be found by lenders or landlords.
- Sale or Refinance: You can’t sell or refinance real estate or other major assets without addressing the lien.
- Business Operations: Tax liens can block sales, transfers, or business loans for companies, and attach to all assets and accounts receivable.
- Future Assets: The lien follows you, attaching to property acquired after the lien is filed.
How Does an IRS Levy Affect You?
- Immediate Asset Loss: A levy results in immediate loss of funds or property. IRS bank account levies can empty your account, and wage garnishment can drastically reduce your income.
- Financial Distress: Levies can leave you unable to pay bills, cover business expenses, or support your family.
- Public Embarrassment: Wage levies inform your employer of your tax problem.
- Difficulty Reversing: Reversing a levy after assets are seized is extremely difficult without legal help with tax levies.
What to Do If You Receive a Notice of Federal Tax Lien or Levy
Receiving an IRS Notice of Federal Tax Lien or a Final Notice of Intent to Levy is a serious legal event. For in-depth guidance, visit our tax compliance page.
1. Don’t Ignore the Notice
Every IRS notice has a deadline and outlines your rights. Ignoring it can cause the IRS to move forward with aggressive collection actions, including asset seizure.
2. Understand Your Options
The IRS offers ways to resolve tax debt and possibly prevent or remove a lien or levy. However, understanding these options and whether you qualify is challenging. This is when legal help with tax liens and tax attorney consultation becomes critical.
3. Contact a Tax Attorney Immediately
A tax lawyer for IRS debt can:
- Review your IRS notices and your entire tax situation
- Determine whether the IRS tax lien or IRS tax levy was filed properly
- Advise you on how to protect your assets and legal rights
- Communicate directly with the IRS, often stopping collection calls and buying time to resolve your case
Should I Hire a Tax Lawyer for IRS Liens or Levies?
Learn more about our tax law services and how our team can protect your rights.
When to Seek Legal Representation
- Large or Complex Debt: If you owe more than $10,000, have multiple years of back taxes, or own a business, the IRS is more aggressive. Hiring a tax attorney gives you an advocate to negotiate the best solution.
- Threats to Home, Wages, or Business: If the IRS is threatening to seize your home, garnish your wages, or levy business assets, contact a tax relief attorney immediately.
- You Disagree with the IRS: If you believe the tax debt is incorrect, a tax lawyer can challenge the IRS’s claims, file appeals, and represent you in hearings.
- Facing IRS Audit or Criminal Investigation: Only an attorney can provide attorney-client privilege and defend you in criminal matters.
- Negotiating Settlements: For options like an IRS offer in compromise, installment agreements, or bankruptcy, a tax lawyer is your best asset.
How a Tax Lawyer Can Help
- Stop IRS Collection Actions: An attorney can request hearings or negotiate payment plans to prevent IRS levy or release liens.
- Remove or Discharge a Lien: Tax lien lawyers know the legal process to remove a lien from your property, improving your credit and restoring your financial options.
- Protect Your Property: An experienced tax attorney can sometimes stop or delay seizures, wage garnishment, or bank levies.
- Legal Defense: If the IRS acted improperly, your lawyer can file motions to challenge the collection action.
Frequently Asked Questions About IRS Liens and Levies
For more answers and practical tips, visit our tax collections blog.
Can I remove an IRS lien or stop a levy on my own?
It’s possible for small, straightforward cases. However, the legal process is complex, and mistakes can be costly. Hiring a tax attorney ensures your case is handled correctly and gives you the best chance of success.
How quickly should I act after getting a lien or levy notice?
Immediately. The IRS operates under strict deadlines. Delays can limit your options or lead to irreversible asset loss.
Will hiring a tax lawyer really help?
Yes. Not only does it stop IRS contact with you directly, but an attorney knows the best strategies to resolve IRS tax debt, negotiate settlements, and protect your rights.
Can a tax lawyer help with business tax liens or levies?
Absolutely. Business owners are at risk of having operating accounts frozen or assets seized. A tax lawyer can help you avoid business disruption and negotiate with the IRS.
Steps to Resolve IRS Tax Liens and Levies
- Contact a Tax Lawyer for IRS Debt: Don’t wait until the IRS seizes your assets. A prompt consultation can save your property and finances.
- Respond to All IRS Notices: Read and keep every letter, as they contain critical deadlines.
- Gather Financial Records: Having complete tax and financial records allows your tax attorney to assess your situation and defense options.
- Consider Your Legal Options: A tax lawyer will review if you qualify for an installment agreement, offer in compromise, innocent spouse relief, or even bankruptcy for discharging some tax debts.
- Work Toward Resolution: With legal guidance, you can resolve the debt, stop collection action, and move forward with confidence.
Don’t Face IRS Collections Alone—America’s Tax Defender Is Here to Help
America’s Tax Defender has helped countless individuals and businesses facing IRS tax liens, IRS tax levies, and aggressive collection action. Our experienced tax lawyers know how to stop wage garnishments, release liens, negotiate tax settlements, and protect your assets from seizure. We understand how stressful tax issues can be and are dedicated to defending your rights and financial future.
Call or schedule a confidential consultation today. The earlier you act, the more options you have. We offer nationwide tax defense and will represent you before the IRS or state taxing authorities.
Conclusion
Tax liens and levies are among the IRS’s most powerful tools for collecting unpaid taxes. Knowing when the IRS places a lien or levy—and understanding the risks and remedies—can mean the difference between financial ruin and a successful resolution. In most cases, hiring a tax attorney is the smartest step you can take to protect your property, business, and future.
