• James D. Lynch

WHAT IS THE DIFFERENCE BETWEEN A TAX LIEN AND A TAX LEVY?

Taxpayers often get tax liens and tax levies confused. A lien is a legal claim against your property to secure payment of your tax debt, while a levy actually takes the property to satisfy the tax debt.


Tax liens are typically filed against the taxpayer's real estate or other large assets such as an automobile. The IRS does not seize the property, but the tax lien prevents the taxpayer from being able to sell the property before paying the tax liability to remove the lien. Further, a tax lien has a negative impact on the taxpayer's credit report and shows up in public records.


A levy on the other hand gives the government the right to take your property. Examples of tax levies include garnishment of the taxpayer's wages or seizure of money in the taxpayer's bank account.