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Understanding the Difference Between a Tax Lien and a Tax Levy

Two of the most severe tax penalties the IRS can impose on an individual or business taxpayer are the tax lien and the tax levy. If you've reached the point where these penalties are on the table, you're already in pretty hot financial water. But there is a major difference between liens and levies that will have a real impact as far as how you experience the fallout.

  • Tax liens are claims used as security for a tax debt.
  • Tax levies represent actual seizure of your property to cover the debt.

In the case of a levy, the IRS may actually take your car, home, bank account, or other assets to recoup what it is owed. A lien, meanwhile, simply states that the government has a claim on those items. But a lien has plenty of downsides in its own right. For instance, you may find it difficult to secure credit or a bank loan while there is a lien on your assets. 

In order to break free from these tough tax penalties, you'll need a skilled tax help specialist on your side. In Indianapolis and the surrounding area, you can count on Taxation Solutions, Inc. for exceptional tax resolution service. We have the experience and knowledge to resolve your case, negotiating a tax settlement or other option that should ease your burden. Want to learn more? Call now to book your initial consultation!