Published Aug. 08, 2025 01:24AM EDT
How to Get Rid of Tax Liens and Tax Levies
Has the IRS sent you a notice of a tax lien or tax levy? Or has it started taking a portion of your paycheck every pay cycle? These actions are harrowing ones we help out clients stop every day. Here, we will outline what these actions are and what to do next if you are facing either threat.
What is a Tax Lien
A tax lien is a claim of right to payment against your assets. The IRS is claiming a right to the asset itself and any proceeds from the sale of the asset. It can apply to any sort of property, including real estate, personal property such as cars, and bank or investment accounts.
The lien will typically remain against your assets until it is paid off, either through sale of assets to pay the lien or you resolve your tax obligations with the IRS. The lien can often prevent you from obtaining credit, such a mortgage, although there are certain circumstances in which the IRS will agree to subordinate the lien.
Liens are usually the result of ignoring a series of tax notices. Nevertheless, you have the right to a collection due process hearing with the IRS. This can be an important opportunity to explain why the underlying debt is in error and sometimes delay or stop the lien while an agreement is worked out with the IRS.
What is a Tax Levy
A levy differs from an IRS in that the levy directly takes an asset from you, usually money. Liens, in contrast, only establish the IRS’s right to an asset but do not actually remove that asset from your control (which requires additional steps). The most common types of levies are those against wages or financial accounts. In these situations, the IRS takes a portion of a taxpayer’s paycheck or directly takes money from an investment account to pay off a tax debt.
The IRS can only undertake this after following statutorily prescribed series of notices. Moreover, there are specific limitations on what it can and cannot seize to pay a tax debt. Critically, they cannot be undertaken while an installment agreement or offer in compromise is being considered. Thus starting the resolution process can help you delay or entirely avoid the seizure.
What to Do When the IRS Starts Either
The first step is: do not ignore the action! Dealing with these issues can be intimidating. You owe the IRS money and navigating resolution is not always straightforward.
The next step is to sit down and read the letter, assess whether you agree or have reason to disagree (did the IRS file a return for you but fail to include any of your expenses or other deductions?), and start gathering the relevant documents.
Identify the type of relief you will seek to resolve the issue. We walk through the most common types here, where we outline offers in compromise, installment agreements, currently not collectible status, and penalty abatement. Working out an agreement with the IRS under one of these structures is typically the best way forward.
Finally, invest in professional assistance to help you think through the process and execute. We work with these issues every day and know the options available well. A tax resolution specialist can get you to the finish line and the tax lien or levy released as soon as possible.
Resolving these issues can be stressful. Mid-Atlantic Law & Tax PLLC is here to help you manage that stress or take it off your place. We will manage it without you ever having to speak to the IRS. Call us at 202-449-7888 or visit us here to schedule a consultation. Together, we’ll create a plan to resolve the letter and help you achieve financial peace of mind.
