FED TAX LIEN AND LEVIES
The filing of a notice of lien can wreck your credit and keep you from getting a job or renting an apartment. A levy on your bank account or employer can create financial chaos. When you owe taxes, it is important that you act proactively to keep the IRS collection machine from upsetting your life. It is important to have experience on your side.
Let’s review some basic concepts and definitions. A lien is a charge on property created by law. Examples of liens are mortgages, uniform commercial code security interests, court judgments, and mechanics liens. In the tax area, when a taxpayer files a tax return and the IRS records the amount of the tax, the tax is said to have been “assessed”. Assessment coupled with an unsatisfied demand for payment creates a lien that attaches to all property and rights to property owned by the taxpayer. The lien created by assessment is a secret lien: it is not a matter of public record. Tax liens gain priority over other creditors only when a notice of the lien is recorded.
A “levy” is the seizure of property by the IRS to collect taxes. IRS can send a notice of levy to your bank and clean out your account. It can send a levy to your employer and take a portion of your pay check until the debt is paid.
PRACTICE AREAS
Kemble White, Attorney
Practice Limited to Tax Controversy Matters
