When a taxpayer owes back taxes, the IRS and/or State Taxing Agency can file a Lien on specific assets, which attaches to all rights, title and interest of the taxpayer. Recorded with one or several county recorders, a tax lien basically tells the world that you owe back taxes, and usually damages a taxpayer’s credit. The IRS and/or State Taxing Agency file tax liens to protect their interests.
A bank levy is a collection action used by the IRS and/or State Taxing Agency. An individual or business bank account is frozen and all the funds therein. The bank must hold your funds frozen for 21 days, at the end of which, if the tax debt is not resolved, the money is transferred to the IRS and/or State Taxing Agency.
Wage Levy (Wage Garnishment)
As another collection action used by the IRS and/or State Taxing Agency, it is when they literally take money out of every paycheck. This can seriously jeopardize an individual or business so much that it makes it impossible to maintain the same standard of living.