Tax Relief Blog
Did you receive an IRS or state tax lien notice, levy letter, postcard or phone call?
Know the difference between a tax lien and a tax levy, there are major differences between both enforcement action.
A tax lien is a type of claim against property that secures the payment of a tax debt. A Federal Tax Lien is a non-consensual lien that gives the IRS an interest in the taxpayer’s property (this interest will allow the IRS to seize and sell the taxpayer’s property in order to satisfy an assessment). Under §6321, the tax lien is imposed in favor of the United States Treasury when an assessment has been made by the IRS, a notice and demand for payment has been made, and the taxpayer has neglected or refused to pay the assessment. Under §6322, the IRS tax lien arises at the time the assessment was made.
The lien attaches to all property and rights to property belonging to the taxpayer at the time the lien arises as well as any property acquired after the lien arises. The IRS files a Notice of Federal Tax Lien to put the taxpayer’s other creditors on notice that the IRS has a claim against all of the taxpayer’s property. The IRS lien continues until liability for the assessment is satisfied by payment or abatement, or the assessment becomes unenforceable by reason of lapse of time.
Get professional IRS representation. Our firm represents taxpayers before all administrative levels of the IRS.
Please call us at 562-204-6700 or email us to schedule an appointment.
Taxpayers often mixes between levies and liens, there is a big difference.
A tax levy is a seizure of property to satisfy the tax debt. Usually, once a Federal Tax Lien is imposed, the IRS may levy or seize the taxpayer’s property after notifying the taxpayer of intent to levy and the right to a hearing. The property that is levied upon may be held by the taxpayer or by a third party.
– One common example is a tax levy on money in the taxpayer’s bank account. The IRS will serve the taxpayer’s bank with Form 668-A, Notice of Levy, in order to seize bank accounts. The levy is served on the bank that holds the property of the taxpayer. The levy is effective as to the assets held by the bank at the time the levy is served (i.e. all money in the account at the time of service). The bank must hold the money in escrow for 21 days before remitting the funds to the IRS. The IRS must use another notice if it wants to reach funds the taxpayer deposited after the first levy was served.
– Another common example is a tax levy on the taxpayer’s wages. The IRS will serve Form 668-W, Notice of Levy on Wages and Other income, on the taxpayer’s employer. The authority to levy on wages allows the IRS to continually reach the nonexempt portion of the taxpayer’s wages. The weekly exemption amount is 1/52 of the taxpayer’s standard deduction and personal exemptions.
Know the difference between a tax lien and a tax levy, there are major differences between both enforcement action.
Did you receive an IRS or state tax lien notice, levy letter, postcard or phone call?
Get professional IRS representation. Our firm represents taxpayers before all administrative levels of the IRS.
Please call us at 562-204-6700 or email us to schedule an appointment.
Mike Habib EA is an accredited member of the BBB better business bureau with an A+ rating. Mike is also an Endorsed Local Provider – ELP by Former Dave Ramsey ELP 2012-2019, the TV and financial expert. Mike is an active member of CSEA – California Society of Enrolled Agents, and NAEA – National Association of Enrolled Agents.
About Mike Habib, EA NTPI Fellow®:
Mike Habib, EA is an IRS licensed Enrolled Agent who owns and operates a specialized tax services boutique firm serving clients in various metro areas such as Los Angeles, Whittier, Pasadena, Glendale, Burbank, Orange County, Riverside, Palm Springs, San Bernardino, Palmdale, Bakersfield, New York, New Jersey, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, San Jose, Detroit, Jacksonville, Indianapolis, San Francisco, Columbus, Austin, Memphis, Fort Worth, Baltimore, Charlotte, El Paso, Boston, Seattle, Washington DC, Milwaukee, Denver, Louisville, Jefferson, Las Vegas, Reno, Hempstead, Tucson, Nashville, Davidson, Portland, Tucson, Albuquerque, Santa Fe, Anchorage, Atlanta, Long Beach, Fresno, Sacramento, Mesa, Kansas City, Cleveland, Virginia Beach, Omaha, Miami, Oakland, Tulsa, Honolulu, Minneapolis, Pittsburgh, Colorado Springs, Arlington, Wichita, Birmingham, Montgomery, Tampa, Orlando.
