Levies and Liens - What is the Difference?

Levies and Liens - What is the Difference?

One way the Internal Revenue Service ("IRS") and the Comptroller of Maryland ("Comptroller") encourage taxpayer payment compliance is through tax liens and levies. 

levy is a legal seizure of property or rights to property to satisfy a debt. 

How does the levy impact you, the taxpayer? If you have unpaid tax, the IRS and/or the Comptroller can direct your employer to pay a certain portion of your wages directly to the IRS or the Comptroller every time you get paid. They can also seize funds from your bank account. 

lien is a legal claim by the government against a taxpayer's property, and his or her rights to property, even if the taxpayer has not yet exercised those rights. 

What does that mean to you, the taxpayer? If, for example, you owe tax to the IRS, the IRS would have to grant a discharge of the tax lien as to your home or other asset(s) you want to sell before you could sell them. Typically, as part of the agreement to discharge the tax lien, the IRS would require that a portion (or all) of the proceeds from the sale of the asset go towards satisfying the outstanding tax debt.  

Please contact us if you want help obtaining relief from a Federal or Maryland State tax lien or levy. 

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10.0Cheri Patrice Wendt-Taczak
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