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What is a tax lien?

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What is a tax lien?

What is a tax lien?

A tax lien is a legal claim a government places on real estate or other assets when the owner is past due on taxes. Municipalities may sell tax liens to investors who pay the tax bill in return for the right to collect the money and interest from property owners.

If you don’t take care of a federal tax lien, a tax levy could come next. A tax levy is the actual seizure of property to pay taxes owed. Tax levies can include things such as garnishing your wages or seizing assets and bank accounts.

» MORE: If you’re wondering how long it might be before the IRS notices you haven’t paid your taxes, read this.