Note: The following is from the IRS website.
Notice of Federal Tax Lien
Liens give us a legal claim to your property as security or payment
for your tax debt. A Notice of Federal Tax Lien may be filed only after:
- We assess the liability;
- We send you a Notice and Demand for Payment - a bill that tells you how much you owe in taxes; and
- You neglect or refuse to fully pay the debt within 10 days after we notify you about it.
Once these requirements are met, a lien is created for the amount of
your tax debt. By filing notice of this lien, your creditors are
publicly notified that we have a claim against all your property,
including property you acquire after the lien is filed. This notice is
used by courts to establish priority in certain situations, such as
bankruptcy proceedings or sales of real estate.
The lien attaches to all your property (such as your house or car)
and to all your rights to property (such as your accounts receivable,
if you are a business).
Caution!
Once a lien is filed, your credit rating may be harmed. You may not be
able to get a loan to buy a house or a car, get a new credit card, or
sign a lease. Therefore it is important that you work to resolve your
tax liability as quickly as possible, before lien filing becomes
necessary.
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Levy |
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A
levy is a legal seizure of your property to satisfy a tax debt. Levies
are different from liens. A lien is a claim used as security for the
tax debt, while a levy actually takes the property to satisfy the tax
debt.
If you do not pay your taxes (or make arrangements to settle your
debt), the IRS may seize and sell any type of real or personal property
that you own or have an interest in. For instance,
- We could seize and sell property that you hold (such as your car, boat, or house), or
- We could levy property that is yours but is held by someone else
(such as your wages, retirement accounts, dividends, bank accounts,
licenses, rental income, accounts receivables, the cash loan value of
your life insurance, or commissions).
We usually levy only after these three requirements are met:
- We assessed the tax and sent you a Notice and Demand for Payment;
- You neglected or refused to pay the tax; and
- We sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing
(levy notice) at least 30 days before the levy. We may give you this
notice in person, leave it at your home or your usual place of
business, or send it to your last known address by certified or
registered mail, return receipt requested. Please note: if we levy your
state tax refund, you may receive a Notice of Levy on Your State Tax
Refund, Notice of Your Right to Hearing after the levy.
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LP 59 Frequently Asked Questions (FAQs) |
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What is the notice telling me?
We previously sent a notice of levy to you to collect money from the
taxpayer named in the letter, but have received no response.
What do I have to do?
If you previously responded, complete the information and mail it to
us in the enclosed envelope. You are legally responsible for responding
to the levy and must send us the amount you owe the taxpayer(s), not to
exceed the amount on the levy. Failure to do so could result in you
being personally liable to us for the amount you owe the taxpayer. A
penalty of up to 50% of the tax owed may also be imposed.
How much time do I have?
Respond at your earliest convenience by correspondence or you may
call the phone number provided on the letter for additional assistance
or to let us know that you do not owe funds to this taxpayer.
What happens if I don't respond to the levy?
You are legally responsible for responding to the levy and must send
us the amount you owe the taxpayer(s), not to exceed the amount on the
levy. Failure to do so could result in you being personally liable to
us for the amount you owe the taxpayer. A penalty of up to 50% of the
tax owed may also be imposed.
Who should I contact?
Either call the number provided in the letter or respond in writing using the enclosed envelope.
What if I don't agree or have already taken corrective action?
Contact us by phone to resolve any concerns or outstanding issues related to the levy you received previously. |
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Wikipedia Definition
http://en.wikipedia.org/wiki/
Tax_lien
http://en.wikipedia.org/wiki/
Tax_levies
