Tax Lien vs. Levy: A Choice between Bad and Worse

There are times in your life when you must choose between two “evils”. More often than not, you’ll likely choose the “lesser of two evils”. This is the exact scenario you must deal with when facing tax liens and tax levies.

A tax lien and tax levy are two very different things. A tax levy means the government has the right to take and liquidate your assets to pay the back taxes you owe. On the other hand, a tax lien means that the government has “first dibs”, so to speak, on your assets. This doesn’t mean, however, that the government can take your assets away from you.

A tax lien may sound like nothing compared to a tax levy, but know that there is a catch. When a tax lien is imposed on you, the government sends a notice to all creditors. As a result, your credit rating plummets fast.

A Notice of Federal Tax Lien is a public record, meaning just about anyone, including potential employers, can see it. This can significantly reduce your chances of being employed as well.

Whether you are facing a lien or a levy, you’ll want to speak to a tax lawyer immediately. Your lawyer can negotiate with the IRS on your behalf and have either a levy or a lien lifted. Similarly, your lawyer can negotiate a payment plan that minimizes the burden of tax debt and reduce the amount you owe to a more manageable level.


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