Liens and Levies

Our law firm understands the tools at the IRS' disposal

If you are facing tax collection action after the IRS has assessed a tax liability, you'll be facing the weapons in the IRS arsenal: the lien and the levy. Any type of collection action can have a significant impact on your finances, and you need an experienced tax lawyer on your side to protect your interests. The attorneys at Brown, Naegle, Crider & Jensen LLC can help.

Founding partner and tax law attorney Shad M. Brown used to work for the IRS. He has seen their collection practices firsthand, and he has extensive experience representing taxpayers who are dealing with liens and levies. If you're facing collection action, get Shad Brown on your side right away.

Tax liens

A tax lien is essentially a claim placed on your property - such as a home, vehicle or other item of value - by a government taxation authority, such as the IRS or the Arizona Department of Revenue (ADOR). The lien, in itself, does not mean that the government will seize your property. However, it means that the government has first right to your property ahead of any other creditors. In order to place a lien on your property, the taxing authority must first assess a tax amount owed, send a bill to your last known address and give you a certain period of time to pay the bill; if it is not paid within the allotted time, the government may then file a notice of tax lien.

Any liens on your property will appear on your credit report, which will likely impact your credit score. With a tax lien on your credit report, it is extremely difficult to obtain future credit because the taxing authority has first right to your assets ahead of any other potential creditors, significantly increasing the risk to lenders. This can make it impossible for you to, for example, buy a house, buy a car, get a new credit card or even sign a lease for a rental property.

The simplest way to have a lien released is to pay the full amount of the tax bill. The taxing authority may also consider releasing the lien if you enter a monthly payment plan. Finally, if your attorney finds that the taxing authority didn't follow correct procedures when filing the lien, you may be able to fight to have it released.

Tax levies and wage garnishment

Unlike a lien, a levy is an actual seizure of your property to pay your tax debt. The IRS can levy your bank accounts and your real property by following particular procedures. Generally, the IRS is required to give written notice of its intent to levy at least 30 days before it levies. In the case of levied bank accounts, the bank must wait 21 days after service of levy before turning the funds over to the IRS. This freeze gives you a chance to resolve the matter before you suffer the potentially very harmful effects of a levy. In the case of levied real or personal property, the IRS can reduce it to cash by selling it. Before the IRS can do this, they must provide you with notice of the levy and intent to sell.

Wage garnishment is another type of levy in which the IRS seizes a portion of your paycheck. This is an administrative levy that does not require a court order. However, the IRS is required to follow stringent guidelines when garnishing paychecks. In particular, the IRS can only garnish up to 25 percent of your disposable earnings - that is, the amount of pay left after mandatory deductions - in most cases.

As with a lien, you may be able to avoid a levy by working with the taxing authority to create a payment plan or settle your tax debt entirely. It may also be possible to reduce the amount of the levy or garnishment to make sure you can still pay your living expenses. That's why it's critically important to have an experienced tax lawyer on your side.

Don't face collection alone. We can help.

A lien or levy is not only a frightening and stressful moment; it can have serious long-term effects on your financial future. If you're facing collection action, don't try to handle the IRS alone. Contact us online or call 480-378-9000 today to schedule your free consultation with attorney Shad Brown.

3850 E Baseline Rd Suite 112
Mesa, AZ 85206
local phone: (480) 378-9000