How the IRS Deals with Liens and Levies

Have you received a notification that you owe the IRS money? This letter can be one of the most frightening you ever receive as an American citizen, and unfortunately, many people choose to deal with their fear by ignoring the problem and hoping it goes away. It won’t. The IRS will continue to seek payment of any money it is owed and it will take drastic measures – measures that aren’t even an option for other debt collectors – to collect the money you owe.

IRS Liens

One of the first aggressive steps the IRS takes if you have not paid a debt is to put a lien on your property. This ensures the IRS will have a claim on any proceeds you receive in relation to the property. IRS liens can be placed on real estate, personal property, and financial assets. The IRS does this by filing a Notice of Federal Tax Lien with the court. This document alerts your creditors that you “share” the ownership of the property with the IRS now and the lender cannot allow you to dispose of or borrow against the property without the IRS’s involvement.

IRS Levies

Another option the IRS has when you owe money is to get a levy on your property. This is even more aggressive than a lien because it allows the IRS to seize your personal property. Liens guarantee security for tax debts, but levies give the IRS the power to sell your property in order to receive payment. Levies make it possible for the IRS to seize and sell any property you own, including your home and your vehicle. It also enables the IRS to go after assets or property that are controlled by a third party, including your bank assets, retirement accounts, and insurance policies. Essentially, a levy allows the IRS to take everything you own in order to settle the debt you owe.

The good news, if you can consider anything associated with a tax debt good news, is you have some time to resolve the issue. Like many government processes, it does take some time for the IRS to take action, which means you can make arrangements to avoid liens and levies.

This does not mean you should ignore any notices you receive or assume you won’t need to fix the problem for a few months. It usually takes about 30 days after you are notified of the debt for the IRS to begin action on a lien or levy. The sooner you take action to resolve the matter the better.

To learn more about how the IRS can use liens and levies against you, visit IRS.gov.

If you have been contact by the IRS about a debt or you know an outstanding debt is about to catch up with you, we can help. Dealing with the IRS is one of the most intimidating situations you can face and doing it without guidance or support can be a big mistake. The best thing you can do is contact an attorney who understands debt collections and can help you make the best decisions. Contact the Law Offices of Robert M. Geller at 813.254.5696 to discuss your situation.