How is a levy different from a lien?
- September 9, 2020
- David Greene
- Comments Off on How is a levy different from a lien?
I answered this question about the lien last week. This week I want to discuss how a levy differs from a lien. While a lien is simply recorded at the courthouse and is therefore a “passive” collection action (nothing happens until the taxpayer sells property), a levy is an “active” collection action. After you receive notice of levy, a portion of your wages and/or all the money in your bank account can be seized by the IRS. These are the two most common forms of levy. However, other property, such as vehicles, business equipment and even real property can be seized as the result of a levy. Levies can usually be delayed or stopped while the taxpayer works out arrangements to pay the tax or files an Offer in Compromise. However, one must take quick action as soon as he receives a threat of levy