The Differences Between Tax Liens and Levies

Failing to pay your income taxes can result in some harsh penalties. The IRS is relentless when it comes to collecting back taxes. Through the use of liens and levies, the IRS can ultimately take control of all your important assets including your car, bank accounts, wages and ultimately your home. Each year, countless people throughout the country are faced with these severe consequences. If you’re involved in this difficult situation, it’s important to know the distinction between liens and levies and consult with reputable tax attorney.

An IRS tax lien is the government’s claim on your property or any of your major assets. This means the IRS has rights to your home or any property you may purchase in the future. A lien is not the actual seizure of your home. Rather, it’s an IRS interest which is similar to a mortgage. For example, if your home is worth $100,000 with a $75,000 mortgage, your equity is $25,000. This is money that would normally belong to the homeowner. But when the IRS places a lien on your property, your equity belongs to the government. Even if you try selling your property, the equity still belongs to the IRS. If you’re facing a lien, you have a 30 day window to file an appeal.

A levy is the actual seizure of your home by the IRS. But levies go beyond real estate. The IRS can also use levies or garnishment on your wages, bank accounts, subcontractor pay and retirement saving. Just like a lien, a levy can be appealed within 30 days of it being issued. During this time, the IRS is prohibited from enforcing action until the hearing is completed. It’s important to remember the IRS doesn’t have to issue a lien prior to levying your wages or bank accounts. The IRS can’t seize your house until it receives court approval. A levy may appear to be a more harsh punishment. But it is easier to combat.

If the IRS has issued a lien or levy on your property or your assets, it’s important to get proper representation from a tax law attorney who has your best interests. Attorney Ross Greenberg has years of experience and knowledge dealing with the IRS and helping the people of South Florida resolve their tax issues. Don’t try to battle the IRS on your own. Get consultation from the professional tax attorney at the Greenberg Law Group P.A.