Understanding the difference between a Lien and a Levy is critical to surviving collections.
Lien vs. Levy
- Tax Lien: A legal claim against your property to secure the payment of a tax debt. It doesn't instantly take your property, but it prevents you from selling or refinancing it without paying the IRS. It also damages your credit.
- Levy: A legal seizure of your property to satisfy a tax debt. This includes garnishing wages, taking money from bank accounts, or seizing physical assets.
Stopping the Process
You can often stop a levy by setting up an Installment Agreement or proving "undue hardship." The key is communication—never ignore IRS notices.