What is the Difference Between an IRS Levy and an IRS Lien?

Date: July 20, 2022

Levies and liens are both collection enforcement tools of the IRS, but they can have different
consequences for taxpayers.
An IRS levy refers to the ability of the IRS to legally seize a taxpayer’s property to satisfy their
tax debt. If a taxpayer has not taken action to pay their federal tax debt and the IRS deems a
levy to be appropriate, they may levy the property or right to property the taxpayer owns or
has an interest in. This may include garnishing wages, taking the money out of a taxpayer’s
bank account, or seizing the taxpayer’s social security benefits. The IRS will send you a notice at
least 30 days before the levy takes place.
An IRS lien, on the other hand, is a legal claim against a taxpayer’s property, rather than an
actual taking of it. Again, this occurs when the taxpayer fails to pay their outstanding federal tax
debt. This action protects the government’s interest in a taxpayer’s property such as their real
estate, personal property, or financial assets. To put a lien in place when the taxpayer owns
$10,000 or more, the IRS files a public document, the Notice of Federal Tax Lien, to alert
creditors that the government has a legal right to your property. You have the right to appeal if
the IRS advises you of the intent to file a Notice of Federal Tax Lien.
If you receive a letter from the IRS regarding a levy or lien and wish to seek legal assistance, you
can reach out to the Low Income Taxpayer Clinic by calling (812)-339-7668.

For more information on IRS levies, visit here: https://www.irs.gov/businesses/small-businesses-self-employed/levy
For more information on IRS liens, visit here: https://www.irs.gov/businesses/small-businesses-self-employed/understanding-a-federal-tax-lien

Megan Burtis,
Low Income Taxpayer Clinic Law Clerk

  • PDF
  • iCAL
Apply Online (24 Hours)

Non-criminal, civil legal issues including public benefits such as food stamps, SSI/SSDI terminations, unemployment, land sale contracts, etc.

By Phone:
(844) 243-8570
M - F 10am to 2pm (EST)
Indiana Legal Services Online Application

The application should take about 20 minutes to complete. You will need to answer questions about your income, assets, and household size. Submitting an application does NOT mean that we will accept your case. You should hear from us within about 14 days with a decision on whether we will be able to take your case.

Indiana Legal Services, Inc. (ILS) is a nonprofit law firm and the largest provider of free civil legal assistance to eligible low-income people in Indiana. ILS helps clients who are faced with legal problems that harm their ability to obtain basic needs such as food, shelter, income, medical care or personal safety. ILS also handles cases in other areas including family law where there is domestic violence, housing, consumer law, access to health care, and access to government benefits. ILS does not handle any criminal matters.