People mix up an IRS levy with an IRS lien, and that mistake matters. A lien is a legal claim against your property because of unpaid tax debt. It attaches to what you own and warns other creditors the government has first dibs. A levy is the part where the IRS stops waiting and takes the money or property. One is a warning flag on the jobsite; the other is the excavator actually tearing into the ground.

A levy can hit a bank account, wages, tax refunds, Social Security benefits, or physical property like a car or real estate. After the IRS assesses the tax, sends a bill, and you do not pay, it can issue a Final Notice of Intent to Levy and your right to a Collection Due Process hearing under Internal Revenue Code § 6330. If you miss that window, the IRS can garnish paychecks and drain accounts fast.

For an injury claim, a levy can wreck the payout before you ever touch it. Settlement funds sitting in your bank account may be grabbed, and money paid directly to you can disappear into old tax debt. Even if part of a personal injury settlement is not taxable, that does not block collection on taxes you already owe. Utah does not have a special state rule that overrides an IRS levy; this is federal collection power, and it is brutally effective.