A tax lien is usually a necessary first step before the IRS will issue a levy. A tax lien is merely a document that the IRS records at the county recorder’s office giving the world public notice that The IRS will be a priority creditor over unsecured debts and loans. Unsecured debts and loans are things such as credit card debt and personal loans owed to family and friends.
Your mortgage on your house and loan on your car will still have priority over the IRS tax lien. However, the tax lien is a public document and will show up on your credit report, thereby damaging your credit and therefore making it more difficult for you to borrow money.
Once you either repay your taxes, settle your taxes with the IRS or let the taxes expire, the IRS tax lien will then be removed.
Most taxpayers are motivated to resolve their IRS debt when they receive a tax lien from the IRS. It is best to resolve your tax debt with the IRS as soon as possible.