The Basics of Tax Liens: Frequently Asked Questions | Axiom Tax Resolution Group

Oftentimes, when people talk about tax problems a tax lien is brought into the conversation. But what is a tax lien? Is it the same as a tax levy? These are but some of the questions you may have when you first hear the term. 

Simply put, a tax lien is a legal claim that the IRS makes use of when you are unable to pay off a tax debt. This is done to prevent you from selling the property, in a way protecting it for their interests.

You can think of it as a sort of warning that that property is being considered as collateral for your debt. On the other hand, a tax levy is when the IRS is given permission to actually take your property. 

Now, we understand if you have more questions about this. To help you out, we’ve compiled a list of the most common questions about tax liens. Hopefully, this information proves to be useful when it comes to dealing with tax liens.

What Kind of Impact Do Tax Liens Have?

Unfortunately, the notices sent out by the IRS are visible to any financial institution looking out for them. The Notice of Federal Tax Lien, which is attached to any of your properties or assets, is what is normally found on public records.

This means your credit rating will take a hit, affecting interest rates on any loan you might take out in the future. Further, your credit line will also be negatively affected given this is tied to your credit rating. 

Will I Be Warned First?

Of course! As with most things, a warning in the form of a letter will be sent by the IRS to the individual in question. This letter, the Notice and Demand for Payment, will only be sent once the IRS has assessed your tax liabilities and has determined your total debt.

To alert creditors, the IRS will also file the Notice of Federal Tax Lien which is a public document as mentioned above. This is to ensure that any creditors out there are aware that the property in question is being eyed by the IRS. 

Don’t worry, you’ll be receiving a copy as well just to let you know of what’s happening. At least this way there will be no surprises when the IRS comes knocking.

Keep in mind that as far as tax problems go, a tax levy may not reach the public record (affecting your credit rating) but a Notice of Federal Tax Lien will.  

What Are My Next Steps?

The best way to get rid of the tax lien is, of course, to pay the tax debt in full. This will ensure that any lien on your properties are removed as soon as possible, on average about 30 days after the debt is settled. 

Once paid in full, the federal government is supposed to send you a notice regarding the release of the lien. In some cases though, individuals have to follow-up with the federal government when the notification isn’t received. 


Dealing with tax lien can be rather difficult and can induce a lot of stress. This is especially true when you don’t know what to do or expect. We hope this article will help prepare you for this issue in case it ever comes up. If you need further assistance handling your tax issues, consider reaching out to tax relief solutions.

Get the tax relief help you need by seeking tax resolution services. At Axiom Tax Resolution Group, our trusted tax professionals can help you address your problems with the IRS. Get in touch with us to know and discuss your options!