When you owe a large amount in delinquent taxes, the government can take extreme measures to collect on that debt. Among the most extreme tactics the IRS employs are tax liens and tax levies. If you’re hit with either of these tax penalties, you’re in danger of severe financial fallout. But do you know the key differences between these two actions, as they relate to your situation?
A tax lien represents a claim the government is putting on your assets, such as your bank accounts or property. A tax levy, meanwhile, leads to actual seizure of those assets—the tax authorities can take your home, car, or boat, for instance, and sell it to recoup the money you owe in back taxes. Levies can also be placed upon your wages, bank accounts, rental income, and the cash loan value of your life insurance. While it might sound like a levy is much worse than a lien, keep in mind that liens can impact your finances in a variety of ways. For instance, the lien will go into your credit report, making it much harder for you to rent or purchase property or to secure a bank loan.
If you’ve received notice of a tax lien or levy being placed on your assets, get in touch with Taxation Solutions, Inc. right away! We’re Mesa’s best choice for reliable tax help, able to aid our clients in breaking free from a variety of tough tax problems. We’ll find your best way forward.