People who don't pay their taxes need to know the difference between a lien and a levy:

• With a levy or seizure, the IRS takes your car, lifts the loot from your bank account, starts taking most of your payroll check and hunts down any asset you gave away to hide. Here are a few exempt assets: tools, clothes, schoolbooks, furniture, unemployment benefits and part of wages.
  
• With a lien, you keep the asset. The IRS gets an interest in it to secure payment of taxes. If you sell, the agency grabs the proceeds. No assets are exempt.
  

The court explained to Jeffrey that the IRS didn't have a levy-where the law limits what it can grab-it had a lien-where it can tie everything up. Thus, the agency can grab the proceeds if she sells her pets.

THE MORAL: The IRS can take a bite out of a sale if it liens on a taxpayer.

Francis J. Valentine's Social Security check was late. How could that be? So he contacted the Social Security office.

He discovered the IRS had told the agency to send his checks to the IRS. Valentine owed $235,965 for underpaying taxes for eight years.

In court, Valentine claimed he hadn't received notice the IRS would seize his checks.

Receiving is not, however, required. The law says only that it send the notice by certified mail, as the agency did.

Valentine lost. (more at IRS Collections)

THE MORAL: Since the taxman got all my belongings, I found a new place to dwell, down at the end of Levy Street...Heartbreak Hotel.

Released 6-10-02