A federal tax lien and an IRS levy are two different things, and they call for different responses. A lien is a legal claim against your property. A levy is the actual seizure of it. Both are governed by strict statutory procedures — and those procedures include rights that most taxpayers never exercise because they do not know they exist.
The federal tax lien
Under Internal Revenue Code §6321, a lien arises automatically in favor of the United States the moment a tax is assessed, a demand for payment is made, and the taxpayer does not pay. The lien attaches to all property and rights to property you own or later acquire. The IRS then has the option to file a public Notice of Federal Tax Lien with the county clerk, which puts creditors, title companies, and lenders on notice. That public filing is what makes it difficult to sell or refinance real estate, and it can affect business financing.
The Internal Revenue Code provides several specific remedies. A lien is released within 30 days after the liability is paid or becomes legally unenforceable. A lien may be withdrawn (Form 12277) in certain cases — for example, where the taxpayer enters a qualifying direct-debit installment agreement, or where withdrawal will facilitate collection. A discharge (Form 14135) removes the lien from a specific piece of property so it can be sold, with the government's interest protected from the proceeds. A subordination (Form 14134) allows another creditor to move ahead of the IRS so that a refinance can close. Each of these has its own standard and its own application, and each is decided by an IRS Advisory unit that expects a properly documented request.
The IRS levy
A levy is enforcement. Under §6331, the IRS may seize bank accounts, garnish wages, take accounts receivable from a business, and in some cases reach retirement accounts and Social Security benefits. Before most levies, the IRS must send a Final Notice of Intent to Levy (commonly Letter 1058 or LT11) and give you 30 days to request a Collection Due Process hearing. Requesting that hearing on time, on Form 12153, generally stops the levy while the hearing is pending and preserves your right to go to the United States Tax Court afterward. Miss the 30 days and you are left with an "equivalent hearing" that carries no Tax Court right. This deadline is the single most important date in a collection case.
A bank levy is a one-time seizure of whatever is in the account on the day it is served, and the bank must hold the funds for 21 days before sending them to the IRS. That 21-day window exists so the taxpayer can seek release. A wage levy is continuous and remains in effect until released. A levy must be released if it is creating an economic hardship, if the liability is paid, if the collection statute has expired, or if release will facilitate collection — and the taxpayer may request release on any of those grounds.
What the firm does on a lien or levy matter
- Immediate review of the notice to identify the type of action, the deadline, and the rights that attach to it
- Timely filing of Form 12153 to request a Collection Due Process hearing and preserve Tax Court review
- Direct contact with the assigned Revenue Officer or the Automated Collection System under a power of attorney
- Requests for levy release based on economic hardship, supported by a complete financial statement
- Applications for lien withdrawal, discharge, or subordination so that real estate and business transactions can close
- Negotiation of the underlying collection alternative — installment agreement, Currently Not Collectible status, or an offer — that resolves the case rather than postponing it
- Referral to the Taxpayer Advocate Service in cases of significant hardship where normal channels are not working
Why timing matters
Collection cases are driven by deadlines the IRS sets. Many of the strongest protections in the Code — the Collection Due Process hearing, the 21-day bank hold, the right to appeal a lien filing — exist for a limited window and then close permanently. The value of attorney representation at this stage is not only in what gets argued, but in making sure nothing is forfeited by the calendar.