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What is the difference between a lien and a levy?

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A lien is a document (typically filed at the Recorder’s Office in which you reside) that states the amount of taxes owed and says that if you sell certain property, the proceeds must be used to pay the lien.  In contrast if the IRS places a levy on one of your assets, such as a bank account, all monies inside that account will be sent to the IRS.  Just remember: lien = encumbrance; levy = seizure.

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