IRS Tax Lien

Tax Lien vs. Tax Levy: What’s the Difference?

Many people use tax lien and tax levy interchangeably, but there is a distinct difference between them. A tax lien is a legal claim against your property in an attempt to secure payment of your back taxes. A tax levy, however, allows the IRS to actually seize your property to satisfy the debt. A tax lien will come into play if you disregard your tax bill or refuse to pay it. When this happens, the IRS will file a public document, the Notice of Federal Tax Lien. This basically tells all other creditors that the IRS has secured a legal claim to your property. Credit bureaus may also include the notice in your credit report.

How to Handle an IRS Tax Lien

The IRS can place a tax lien not only on your existing assets, but also future assets attained while the lien is in effect. Even if you file for bankruptcy, the IRS lien may remain in place. The easiest way to remove a tax lien is to pay your taxes in full. Once paid, the IRS will release the lien within 30 days. If paying your tax debt in full is not possible, you may be able to get relief through one of these options.

Installment Agreement
If the IRS hasn’t filed a tax lien against you yet, you may avoid adverse action by setting up a guaranteed installment agreement ($10K or less) or a streamlined installment agreement ($25K or less). This allows you to make monthly payments over time to pay off your tax debt.
Offer in Compromise
You may be able to reduce your tax debt through an Offer in Compromise. If successful, the IRS will remove the tax lien once the agreed-upon amount is paid in full.
Tax Lien Withdrawal
An IRS tax lien is typically withdrawn when the IRS files a lien against the wrong taxpayer. If you believe a tax lien was filed in error, contact the IRS immediately and request a review.

Two additional withdrawal options are provided under the Fresh Start initiative.
The first option allows withdrawal if all of the following conditions are met:
- Your tax debt is paid, and your lien has been released
- You have filed all individual returns, business returns, and information returns for the last three years
- Your estimated tax payments and federal tax deposits, if applicable, are current
The second option allows withdrawal if you’ve entered into a direct debit installment agreement, and you meet the following eligibility:
- You are a qualifying taxpayer
- You owe $25,000 or less (you can pay down the balance to $25,000 prior to requesting withdrawal)
- Under the agreement, you will pay in full the amount you owe within 60 months, or before the collection statute expires, whichever comes first
- Other filing and payment requirements are compliant
- You have made three consecutive direct debit payments
- You haven’t defaulted on your current or any previous direct debit installment agreement

If you’re dealing with an IRS tax lien, don’t panic. Tax Defense Network can help. Our tax professionals have the experience and expertise to help you find the right solutions for your tax problems. Schedule a free consultation today!

Tax Defense Network

“I received a notice of intent to lien from the IRS. I contacted Tax Defense Network that same day. They immediately stepped in with the IRS and negotiated a solution that worked for everyone involved.”

— Douglas G.

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Common Questions About IRS Tax Liens

When do tax liens expire?

Can as state tax lien prevent employment?

Your tax liens may show up on any background checks that potential employers run on you. While this may not be a big deal to some employers, others may view your credit history as a gauge for trustworthiness and responsibility. If you’re applying for a job that requires security clearances, delinquent tax debt can be considered a security risk. If you have a federal or state tax lien, any job with access to security or sensitive information may be out of the question for you. Your best bet is to contact a tax professional before your lien affects your employment and livelihood.

Can I buy a car if I have a tax lien against me?

What are tax lien certificates?

A tax lien certificate is a form that describes a lien on your property for not paying taxes. These certificates are issued in certain states when the property owner fails to pay their taxes on time. Tax lien certificates are sold through auctions to investors who will then basically act as the taxing authority over the property.

As opposed to a tax deed sale wherein an investor buys the title to your property, an investor with a tax lien certificate is given the right to collect full payment of the taxes due plus interest from you, the property owner. If you don’t pay on time, the investor then can foreclose the lien and take the title to your property.

Thank you for your interest in our tax relief services. At this time, we are unable to assist you. Please call 800-829-1040 to speak with the IRS and explore your options.

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