Liens & Levys: Understanding IRS Collection Actions and How to Fight Back
What This Video Covers
When the IRS moves from sending notices to taking action against your property, income or bank accounts, you are in the collections enforcement phase — and the stakes change considerably. A federal tax lien attaches to everything you own. A levy actually seizes it. Most taxpayers do not fully understand the difference until one of them shows up, and by then the window for the most effective responses has often narrowed.
Key topics addressed include:
- The critical difference between a federal tax lien and an IRS levy
- How Notice of Federal Tax Lien (NFTL) filings damage your credit and complicate real estate transactions
- Types of levies: bank account levies, wage garnishments and seizure of other property
- The Collection Due Process (CDP) hearing — your right to challenge a lien or levy before the IRS Office of Appeals
- Lien subordination, discharge and withdrawal — when and how to request each
- How an installment agreement, Offer in Compromise or Currently Not Collectible status can stop or prevent enforcement
- Time-sensitive deadlines that affect your appeal rights
Why This Matters
IRS liens and levies are not abstract threats. A lien attaches to all of your property — your home, your car, your business assets, your accounts receivable — and it becomes a matter of public record. That means mortgage lenders, business partners and anyone running a background check can see it. Even after the underlying tax balance is resolved, liens can linger on your record and cause complications for years.
The good news: there are well-established legal mechanisms for challenging, releasing or preventing these actions. But nearly all of them have strict deadlines. A Collection Due Process hearing request must be filed within 30 days of certain notices. An installment agreement or Offer in Compromise, when properly submitted, can halt collection activity. Even a request for Currently Not Collectible status can create breathing room. The key is knowing which tool applies to your situation — and acting before your options narrow.
About the Presenter
Benjamin A. Goldburd, Esq.
Goldburd McCone LLP
Benjamin brings focused experience in IRS collection defense, including lien and levy disputes, CDP hearings and negotiated resolutions. Our team’s combined backgrounds in accounting, business and wealth management ensure that enforcement responses account for the full scope of a client’s financial position.
Frequently Asked Questions About Liens & Levys
What is the difference between a tax lien and a tax levy?
A lien is a legal claim. It tells the world — creditors, lenders, the county recorder — that the IRS has an interest in your property. It does not take anything from you directly, but it can make it extremely difficult to sell real estate, refinance a mortgage or obtain business financing. A levy, on the other hand, is actual seizure. The IRS can levy your bank account, your wages, your accounts receivable — even your Social Security benefits in some cases. The lien secures the debt; the levy collects it.
I just received a Notice of Federal Tax Lien. What should I do first?
First, verify the balance. Request a transcript from the IRS to confirm the assessed amount, applicable tax years and any penalties or interest. Second, determine whether you have the right to a Collection Due Process hearing — you generally have 30 days from the date of the CDP notice to request one. Third, consult with a tax attorney to evaluate whether the lien can be withdrawn, subordinated or discharged, and whether an installment agreement, Offer in Compromise or other resolution is appropriate for your situation.
Can the IRS levy my bank account without warning?
Not without notice, but the notice requirements are more limited than many taxpayers expect. The IRS must send a Final Notice of Intent to Levy (typically Letter 1058 or LT11) at least 30 days before the levy. However, they are only required to send it to your last known address. If you have moved and not updated your address with the IRS, it is entirely possible to learn about a bank levy only when your account is frozen.
Can a federal tax lien be removed from my record?
Yes, through several mechanisms. The IRS will release a lien within 30 days after the underlying tax liability is fully satisfied or becomes legally unenforceable. In some cases, you can request a lien withdrawal — which removes the public Notice of Federal Tax Lien entirely — if you have entered into a Direct Debit Installment Agreement or if the IRS determines that withdrawal will facilitate collection.