A lien is only a claim to your property as a result of delinquent taxes, while a levy is the legal seizure of that property. Levies are essentially the IRS's way of getting your attention, saying, "We tried to communicate with you, but you've ignored us. Now, we have to take action." Levies are used to garnish wages, take money from any of your accounts, and seize and sell your real estate or vehicle. Stocks, bonds, boats, paychecks and even Social Security checks can also be forcibly taken from you. Case in point: if you own it, they can claim it.
When the IRS enforces a levy against your property, they often start by taking money out of your personal and/or business accounts. They will literally take every dime you have. If the initial amount they withdraw does not adequately cover the taxes you owe, they'll keep taking your money until you resolve your tax liability.
The IRS knows that levying your bank account will also cause any checks you write to bounce, alerting anyone else you may work with that you've had problems paying your taxes. The IRS is concerned only with what's owed to them and isn't interested in discussing how this may impact you or your business in the future.
As if levying your bank accounts wasn't already enough, the IRS can also levy your wages (also known as a wage garnishment). This means that, instead of being directly deposited to you, as it should, the majority of your paycheck goes straight to the IRS every month until your taxes are paid. Subsequently, you can potentially fall behind in paying your bills or not have enough to purchase basic necessities, which puts a damper on your quality of life.
If levying both your bank accounts and garnishing your wages are unsuccessful in resolving your tax liabilities, the IRS can then seize and sell all of your assets. Assets are anything you own, including your home and the car(s) you drive. They can also include motorcycles, boats, jewelry, insurance polices, retirement funds - you name it!
Our goal is to help you get these levies released and keep you in good standing with the IRS. Schedule your free consultation with one of our tax professionals today! We'll be happy to assist you: