Many taxpayers are confused about the difference between a tax lien and a tax Levy. In fact most people don’t understand how a tax lien actually works so let’s start there.

If the IRS slaps A lien on you they will file a piece of paper with a county government office Where you live. The purpose of this lien document is to notify the world that you have an unpaid federal tax debt. The lien will be filed in the full amount of your tax debt at that time. (Keep in mind your actual Debt will continue to grow even though the lien amount will not be updated)

The lien becomes a matter of public Record. The lien will affect your credit score. Because it will be picked up by credit reporting agencies

The IRS Will only notify you of the lien after they have filed it with the county. They will send you a notice of federal tax lien.

Filing a federal tax lien is the first step The service takes in beginning the collection process. The tax lien puts an encumbrance on all of your property. This means if you sell your property the IRS has the legal right to claim the proceeds.