While the terms tax levy and tax lien are often used alongside one another, the truth is that they describe two different types of actions taken by the IRS. A tax lien is a claim used as a security for a tax debt, while a tax levy is the seizure of properties and assets, by the IRS, in order to settle a tax debt.

A levy is typically the last step in the IRS debt collection process. If you receive a notice to levy, it is important to take the necessary steps to protect your property and your assets. This is typically the step that you can no longer ignore.

Even if you cant repay the debt that you owe, you may still have options. Depending on your circumstances, you may be eligible for a type of settlement known as an offer in compromise. This type of settlement may be approved by the IRS provided that it meets certain conditions which include severe economic hardship, disputed tax liability, and taxpayers inability to pay off the debt in full.

An OIC can help taxpayers avoid bankruptcy, and can result in the release of liens and levies. Taxpayers are required to make a full financial disclosure to the government and waive the rights to certain tax benefits as well as remain current on all tax obligations for five years.

A tax levy can seem like a scary thing, but the good news is that you do have options. A tax professional can help you identify and sort through these options, and plan an effective strategy. Contact a tax professional in your area to learn more.

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