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What are Tax Liens, Levies, and Wage Garnishment?

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property and financial assets.

The federal, state, or local government can place a tax lien on a property if the taxpayer is behind on income taxes. The lien does not mean that the property will be sold. Rather, it ensures that the tax authority gets first claim over any other creditors vying for the creditor’s assets.

As for tax levies, a levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a legal claim against property to secure payment of the tax debt, while a levy actually takes the property to satisfy the tax debt. Alternatively, the IRS can also freeze your savings accounts, retirement accounts, and more to offset your debt. When this happens, they will notify your bank to block any withdrawals from your accounts. Instead, the bank must take that money and give it to the IRS. Ouch! The good news is that we can often stop or renegotiate a levy on your behalf.

For wage garnishments, the IRS can intercept a portion of your paycheck to offset your debt. Your employer must send the determined portion to the IRS. A wage garnishment is issued to your employer, who is then obliged to siphon a portion of your paycheck to the IRS for repayment. The IRS will typically take at least a quarter or more of your income. While they do take into consideration your current financial situation, they are not ultimately held responsible for the bills you have to pay.

What do I do now?

Stop tax liens, levies, and garnishments with Tax Help

If you have had your wages garnished for failure to pay the IRS, or have a lien on your property or bank accounts, we’d recommend scheduling an appointment with a professional at Tax Help. We CAN and WILL solve this together!

Need to stop a levy, lien, or garnishment? We’re here to help.

Schedule an appointment with us today to discuss your tax situation. We can get this handled together! If you would like to schedule an appointment with one of our tax professionals, click the button below to set up a free consultation.