Tuesday, July 7, 2009

Tax Liens vs. Tax Levies

Hopefully, you will never have firsthand experience with either tax liens or tax levies. However, if you do, here is a quick explanation so that you know the main differences between the two:

Tax Lien
A tax lien is a claim that is filed against your property. Typically, a tax lien is filed against your bank account. This instructs your bank to "freeze" your money so that you do not have access to it until the lien is cleared.

Tax Levy
A tax levy occurs when your property is actually taken from you. Again, this is typically done through your bank account whereby your funds are removed from your bank account to pay the taxing authority.


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