When dealing with tax debts, two terms often come up in discussions with the IRS or state tax authorities: liens and levies. While both are tools used by the government to ensure the collection of unpaid taxes, they serve very different purposes and have distinct implications for taxpayers. Understanding these differences is crucial for managing tax obligations effectively and avoiding unnecessary financial hardship.
This article will explore the nuances of liens and levies, their impact on taxpayers, and strategies to address or appeal them. By the end, you’ll have a clear understanding of why avoiding levies is critical and how liens, while serious, can be managed with proper planning.