IRS Tax Liens and Levies: How Florida Taxpayers Can Fight Back in 2026

By: Hao Li, Esq., CFA, CAIA, CGMA, EA | Finberg Firm PLLC, Miami FL

When the IRS comes calling for unpaid taxes, two of the most formidable tools in its collection arsenal are the tax lien and the tax levy. For Florida taxpayers, understanding the distinction and knowing your legal rights is the first critical step to protecting your assets, your credit, and your financial future. As we look ahead to 2026, with potential tax law changes on the horizon, being proactive is more important than ever. This guide explains the key differences and outlines the strategic options available to fight back.

1. What is an IRS Tax Lien vs. Levy — The Critical Difference

Many people use these terms interchangeably, but they represent very different stages of IRS collection action.

Federal Tax Lien

A Notice of Federal Tax Lien is the IRS’s legal claim against your property when you neglect or fail to pay a tax debt. It is not the seizure of the property itself, but rather a public notice to creditors that the government has a right to your current and future property, including real estate, personal property, and financial assets. The lien attaches to all your property and even to business property for certain business taxes.

Federal Tax Levy

A tax levy is the actual seizure of your property to satisfy the tax debt. This is the action that follows if a lien is in place and the debt remains unresolved. The IRS can levy wages, bank accounts, retirement funds, Social Security benefits, and even physical assets like your car or real estate. A levy is the concrete action that takes money or property directly from you.

In short: A lien is a claim; a levy is the seizure. Preventing a lien from escalating to a levy is a primary goal of effective tax resolution.

2. How a Lien Affects Your Credit, Property, and Business

Once a federal tax lien is filed, it becomes a matter of public record and is reported to credit bureaus. This can severely damage your credit score, making it difficult to obtain loans, mortgages, or credit cards. For business owners, it can attach to all business property and receivable accounts, crippling cash flow and harming relationships with vendors and clients. It also clouds the title on real property, preventing you from selling or refinancing assets until the lien is addressed.

3. Options to Release or Discharge a Tax Lien

Having a lien filed does not mean you are out of options. The IRS provides several pathways to release or discharge a lien, which can help restore your financial standing.

Installment Agreement

Setting up a formal monthly payment plan with the IRS can, in many cases, lead to the IRS withdrawing the public Notice of Federal Tax Lien once the agreement is established, especially if it is a Direct Debit Installment Agreement. This helps mitigate the credit damage.

Offer in Compromise (OIC)

An OIC is an agreement with the IRS to settle your tax debt for less than the full amount owed. If the IRS accepts your offer, they will release the lien once you meet all the terms of the agreement. This is a complex process with strict eligibility requirements.

Lien Discharge, Subordination, or Withdrawal

Specific procedures exist to:

• Discharge a lien from a specific property.
• Subordinate a lien, which allows another creditor to move ahead of the IRS, often to facilitate a refinance or sale.
• Withdraw the public notice entirely, which removes it from your credit report.

4. The Collection Due Process (CDP) Hearing — Your Most Powerful Right

When the IRS issues a Final Notice of Intent to Levy or files a Notice of Federal Tax Lien, you receive a letter providing you with the right to a Collection Due Process (CDP) hearing before the IRS Independent Office of Appeals. This is not a right to waive. At a CDP hearing, you can:

• Challenge the appropriateness of the collection action.
• Propose alternative collection methods (like an installment agreement or OIC).
• Dispute the underlying tax liability if you never had a prior opportunity to do so.
• Raise issues of economic hardship or incorrect filing.

Requesting this hearing within the 30-day deadline (stated on your notice) is crucial. It suspends collection activity and provides a formal forum to present your case. Failing to request it can limit your options significantly.

5. Why Having an Attorney Who is Also an EA Matters

Navigating IRS collections requires a dual expertise: a deep understanding of legal procedure and rights, and a granular knowledge of IRS internal rules, codes, and administrative processes. As both a licensed Florida attorney and an IRS Enrolled Agent (EA), I hold the highest credentials granted by the IRS to represent taxpayers at all administrative levels. This unique combination means your representation is seamless—from negotiating directly with the IRS Collections Division to advocating for you in Appeals, and if necessary, preparing for litigation in U.S. Tax Court. You benefit from attorney-client privilege where applicable, coupled with unrestricted practice rights before the IRS.