IRS Tax Liens and Levies: What They Are and How to Stop Them

If you owe federal taxes and don't pay after the IRS bills you, two collection tools can follow: a lien and a levy. They're different, and knowing which one you're facing tells you what to do.

A lien is a claim; a levy is a seizure

• A federal tax lien is the government's legal claim against your property for the debt. It arises automatically when the IRS assesses the tax, sends a bill, and you don't pay. The IRS may then file a public Notice of Federal Tax Lien, which alerts creditors and can make it hard to sell or refinance property.
• A levy actually takes property to pay the debt: garnishing wages, emptying a bank account, taking a tax refund or, more rarely, seizing other assets.

The notices come first

Before levying most property, the IRS generally must send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days in advance. That letter matters: requesting a Collection Due Process (CDP) hearing within its deadline pauses most levy action and lets you propose alternatives with an independent IRS Appeals officer. You also get CDP rights after a lien notice is filed.

Ways to stop a levy or resolve the debt

• Pay in full, or within a short extension.
• Installment agreement: a monthly payment plan. Setting one up generally stops new levies.
• Offer in compromise: settling for less if you truly can't pay in full.
• Currently not collectible status if paying would leave you unable to meet basic living expenses.
• Levy release for economic hardship. If a wage levy leaves you unable to pay basic living expenses, the IRS is required to release it.
• Bankruptcy can stop collection and, for some older income taxes, discharge them.

Getting a lien released or withdrawn

• The IRS must release a lien within 30 days after the debt is paid or becomes legally unenforceable.
• A withdrawal removes the public notice as if it had never been filed. It's sometimes available, for example after you set up a qualifying direct-debit installment agreement or pay the debt.
• You can ask to have a specific property discharged from the lien, for example to sell a house.

Since 2018, the major credit bureaus no longer include tax liens on credit reports, but filed liens are still public records that lenders and title companies find.

When to get help

A tax attorney, CPA or enrolled agent can request hearings, negotiate payment plans and offers, and get levies released. A tax attorney is the right choice if there's any possibility of criminal exposure. See IRS audit or tax debt: what to do or find a tax attorney near you.

This guide is general information, not legal or tax advice. State tax agencies have their own lien and levy rules.