What is a Federal Tax Lien ? vs What is a Federal Tax Levy ?

November 3, 2010
Written by: steve

Fresh Start Tax
 
 
At Fresh Start Tax we are asked this question at least once everyday. 1-866-700-1040
What is the difference between a Federal Tax Lien and a Federal Tax Levy?
A levy is a legal seizure of your property to satisfy a tax debt. A levy could come in the form of a wage levy or bank garnishment. The IRS forms are a 668A or a 668W. The bank levy is a one time seizure or garnishment.
Federal Tax Levies are different from Federal Tax Liens.
A Federal Tax Lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt. A Federal Tax Lien is filed at the courthouse where you live. It also puts the public on notice you have a tax lien filed.  A Federal Tax Lien will ruin your credit.

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