Tax Lien vs. Tax Levy: Understanding the Difference

Tax Lien vs. Tax Levy—Are They The Same?

Many taxpayers hear the terms “tax lien” and “tax levy” and believe they can be used interchangeably. However, they are not the same. Understanding the difference between a tax lien vs tax levy is important so you know where you stand and what risk may or may not exist. 

Tax Lien

A tax lien is a legal claim against property or assets from the federal or state government.

Tax Levy

A tax levy is an enforcement action used by the government to seize control of assets or money.

There are several common levy actions usable against you:

• Wage garnishments
• Bank account levies
• Seizure of business receivables
• Asset seizure in more severe cases

While not every lien leads to a levy, it’s important to understand that action is critical to minimize risk. Escalation is usually based on compliance, timing, communication, and how the tax concern is being handled.

Knowing where you fall in a tax lien vs tax levy situation can make a major difference in how quickly issues can be resolved.

Are You at Risk?

Again, not every lien leads to an enforceable action like a levy, but knowing where you stand can help with tax resolution before you’re at risk. With that understanding, you’ll be able to make an informed decision for your situation based on what options are available to you. 

Our tax professionals ensure taxpayers understand where they’re at in the enforcement process, empowering them with realistic expectations for the next steps to tax resolution.

Schedule Your Confidential Consultation

Discuss your tax situation with one of our tax professionals to know where you stand in the enforcement process.