IRS Difference Between a Tax Lien and Levy

A Tax Lien is a document that is recorded with the county in which the taxpayer lives or lived according to the IRS Tax records of last known address. It affects a taxpayer's credit and encumbers all assets and rights to assets. Including real and personal property.

The federal tax lien arises when any "person" liable to pay any federal tax fails to pay the tax after a demand by the Government for payment. IRC § 6321. For federal tax law purposes, a "person" is defined to include individuals, trusts, estates, partnerships, associations, companies, and corporations. IRC § 7701(a)(1). The lien is effective from the date the Government assesses the tax. Thus, if the taxpayer neglects or refuses to pay the assessed tax, then the lien is deemed to relate back to the assessment date. IRC § 6322. The Service is not required to file a Notice of Federal Tax Lien in order for the tax lien to attach. As discussed later in the text, the Service may file a Notice of Federal Tax Lien in order to have priority over the taxpayer’s other creditors.

A Levy is a document that is issued to an income source or any entity that has rights to your personal or real property.

For example, bank for bank account attachment; wage garnishment to employer, levy for seizure for vehicles, equipment, real property, business assets.

Section § 6331 within Title 26 of the US code defines the capacity of the IRS to collect tax through the issuance of a Notice of Levy.

Call Martha De la chaussee Tax Resolution Expert to secure information on how to take care of tax liens and levies

323-344-2294 or see website: www.advocatetaxgroup.com

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