What is the difference between a lien and a levy?

A lien is a secured interest in an asset or assets.  A Notice of Federal Tax Lien is a public record which notifies the world that a taxpayer owes taxes, and places a public claim against the assets of the taxpayer.  A lien can affect a taxpayer’s credit, and can prevent the taxpayer from selling or transferring an asset subject to the lien.  A levy is when the IRS actually takes an asset or assets from a delinquent taxpayer, whether it is the taxpayer’s wages, bank accounts, investment accounts, real estate or other assets.

For further information regarding levies, see our articles Will the IRS Seize Assets or Force the Sale of Them? and Will the IRS Garnish/Levy My Wages?.


About Stephen K. Galgoczy, Esq.