Understanding tax liens and levies can be troublesome, but it is a good idea to know what tax liens and levies are and how they work, especially if you owe an outstanding debt on your taxes. Consult with a tax professional if you are in need of help managing your taxes. In the meantime, here is a closer look at the difference between tax liens and levies.
Tax Liens A tax lien is the government’s claim against your property that is issued when you fail to pay a tax debt. The IRS will issue a tax lien only after you have been sent a bill detailing your debt (known as a Notice and Demand for Payment) and have failed to pay said debt. A lien establishes that the government has a legal right to your property until the debt is settled. A tax lien can affect your credit, your property, and your business. The clearest way to avoid a tax line is to pay your taxes on time and in full. If a lien has been issued by the government, it can be removed by settling your debt. If you cannot afford to settle your debt outright, there are other options available.
Tax Levies A tax levy is the legal seizure of your property to satisfy a debt. Like liens, levies are issued when you have failed to pay a tax debt. Levies are generally issued after a Notice and Demand for Payment and levy notice has been filed against you. A levy notice, officially referred to as Final Notice of Intent to Levy and Notice of Your Right to A Hearing, is sent at least 30 days prior to any form of property seizure. The IRS may also levy your wages, bank account, or other financial property as a means of paying off your debt. Levies can be appealed, but appeals are addressed and accepted on a case by case basis.
For questions or help with tax liens or levies in San Diego, call The San Diego Tax Pro at (888) 690-9245. The San Diego Tax Pro can provide helpful tax counseling, planning, preparation, and return services to help you avoid costly liens and levies.