The US residents who are facing debt problems might hear two terms frequently which are lien and levy. Some people think that these terms have the same meaning however, they are completely two different terms. After reading this article you will be easily able to differentiate between these two terms. First of all we will discuss IRS Tax Liens:
1- IRS Tax Liens
Lien basically means that IRS will cease your property if you are not paying taxes. The property will remain in their custody until you pay your all outstanding tax debts. IRS can file the lien of your property anytime they want. In simple words you can say that lien is a type of security in case you never make the payment to IRS.
2- IRS Tax Levy
Levy is the next step of Lien. When IRS feels that the debts from you are irrecoverable or you have crossed the deadline of paying taxes then the property which was previously ceased (Lien) will be sold and IRS will keep the money. This money is actually considered as a payment of debt from your side.
Although IRS reaches at the Levy level rarely but if you owe good amount of money to them then chances are great that you might become the victim. It is better to pay off your taxes otherwise IRS always keeps the backup to recover its money from you. Most of the people in the US are able to settle their debts through attorneys and free consultations at the stage of Levy but there is still good number of people who faces the Levy stage. So hire an attorney or get some other help to remove your tax debt and live a comfortable life.
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