IRS LIENS
Federal Tax Lien & Levy
A lien is the legal filing of notice that the IRS has a claim on your assets and a levy is the action of seizure on those assets. Accordingly, a lien on your bank account freezes it, but the money is still there, a levy removes the money.
It is possible that the Federal Tax Lien on your property can be legally removed by using IRS administrative processes, or subrogated to your mortgage so you can sell or get refinancing.
Some of these circumstances relate to the enforceability of the related liability as a matter of law, filings without proper notice, innocent spouse relief, and other administrative provisions.
Don't get mad at the IRS and threaten them over the phone with filing for bankruptcy. Sounds silly? Many people do it and live to regret it. Why, because if the IRS thinks that there is a chance that you are going to file for bankruptcy, they will file a lien on your property the next day. Interestingly, even though your IRS tax liability may end up being discharged by the bankruptcy court, the lien will remain on your house. It remains because the lien is what is called an In Rem action and the bankruptcy only affects In Personam actions. Accordingly, once the bankruptcy petition is filed, the IRS is prohibited from filing any liens on your property, so there is a race to file.
Receiving an IRS Final Notice of Intent to Levy is a serious matter that should not be ignored. Once the levy process has been initiated, it is often difficult to stop. Filing delinquent tax returns is often the first step in getting your life back on track. You should seek assistance immediately if you receive such notice certified mail.