IRS Levy vs IRS Lien – What’s the Difference?
Both Are Serious—But They’re Not the Same
When you owe back taxes, the IRS has several enforcement tools to collect what you owe. Two of the most commonly misunderstood are the federal tax lien and the IRS levy.
They’re not interchangeable—and knowing the difference is critical if you want to protect your wages, bank account, property, or credit.
In this blog, we break down what each one does, how they're triggered, and what you should do if you've received either.
What Is an IRS Tax Lien?
An IRS lien filed against you is the government’s legal claim against your property when you fail to pay a tax debt. The IRS files a Notice of Federal Tax Lien (NFTL), which:
- Attaches to real estate, vehicles, personal property, and future assets
- Notifies other creditors that the IRS has first claim
- Becomes part of the public record
It doesn’t take your assets—but it blocks you from selling or refinancing without paying the IRS.
Related: IRS lien withdrawal vs release – Which One Do You Need?
What Is an IRS Levy?
An IRS levy is an active seizure of your money or property. It allows the IRS to:
- Freeze and drain bank accounts
- Garnish your wages
- Seize business assets, cars, or real estate
It’s the most aggressive collection action the IRS can take—and it doesn’t require a court order.
Related: IRS notice of intent to levy - Urgent Steps to Take
Side-by-Side Comparison
| Feature | IRS Lien | IRS Levy |
|---|---|---|
| What it does | Claims your assets | Seizes your assets |
| Filed publicly? | Yes | No |
| Appears in title reports? | Yes | No |
| Removes assets from your control? | No | Yes |
| Stops a home sale? | Yes (unless resolved) | Possibly (if real estate is levied) |
| Triggered by | Balance due + notice | Final notice + no response |
How They Work Together
The lien is like a warning—the IRS is putting everyone on notice that they have a legal claim. The levy is the execution of that claim.
You can have a lien without a levy, but if you get a levy notice, it means you're already deep into the IRS collection process.
What Notices Should You Watch For?
- Lien: IRS Notice 3172 (Notice of Federal Tax Lien)
- Levy: IRS Letter 1058 or LT11 (Notice of Intent to Levy)
Related: IRS Collection Appeals Program (CAP) vs. CDP Hearings – What’s the Difference?
How to Stop a Levy or Remove a Lien
To stop a levy:
- File for a Collection Due Process (CDP) hearing
- Set up an Installment Agreement
- Submit an Offer in Compromise
- Qualify for Currently Not Collectible
To remove a lien:
- Pay your tax debt in full
- Request a lien release or withdrawal (releasing an IRS lien after settlement)
- File Form 12277 or request Form 668(Z) if eligible
We Help Orange County Taxpayers Stop Levies and Remove Liens
At Boulanger CPA and Consulting PC, we help clients:
- Respond to levy and lien notices quickly
- Stop garnishments and bank levies
- File appeals and resolution requests
- Settle tax debt and clear public records
.
📞 Call (657) 218-5700 or request a confidential case review at www.orangecounty.cpa
For deeper strategies on protecting your property and financial future, learn more in Defend What’s Yours.
Frequently Asked Questions
What is the difference between a lien and a levy?
A lien is a legal claim against your property for unpaid taxes, while a levy is the actual seizure of property, wages, or bank funds to satisfy the debt.
Does an IRS lien mean money will be taken immediately?
No. A lien secures the government’s interest in your assets but does not immediately take money or property. A levy is the active collection tool.
Can I have both a lien and a levy at the same time?
Yes. The IRS may file a lien to protect its interest and later issue a levy if the debt remains unpaid.
How do liens affect credit and property?
Liens are public records that attach to property and may hinder refinancing or selling. While they no longer appear directly on credit reports, they can still affect lending decisions.
How do levies affect income and assets?
Levies seize wages, bank funds, and in some cases physical assets. They cause immediate financial disruption until resolved or released.
How can I stop a levy once it starts?
You may request a release by arranging an installment agreement, proving hardship, or negotiating an Offer in Compromise. Acting quickly is critical.
Can liens or levies be avoided?
Yes. Staying compliant, paying on time, and negotiating a resolution before IRS enforcement can prevent liens and levies from being filed.
Do California agencies use liens and levies too?
Yes. The Franchise Tax Board (FTB) and Employment Development Department (EDD) can file liens and issue levies independently of the IRS.
📣 About the Author
Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.
With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.
Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.
Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.
📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.
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