Miss a tax debt long enough, and the government can claim a legal right to nearly everything you own or may later receive - your home, vehicle, bank accounts, business property, and even money from a lawsuit settlement. A federal tax lien is the IRS's legal claim against a taxpayer's property after taxes are assessed, a bill is sent, and the debt is not paid in full.

Unlike a levy, which is the actual seizure of wages or money, a federal tax lien attaches to current property and to rights to property acquired later. The IRS may file a public Notice of Federal Tax Lien to alert other creditors that it has a claim. That filing can damage credit, block refinancing or a sale, and make it harder to borrow or settle other debts.

For an injury claim, the timing matters. A pending settlement may be affected if the IRS already has a lien, because the lien can attach to settlement proceeds before the injured person gets the money. That can reduce funds available for medical bills, lost wages, or daily living expenses. If there is also a medical lien, subrogation claim, or attorney fee, priority fights can follow. There is no Pennsylvania rule that cancels a federal tax lien in a personal injury case, so quick action with the IRS or a tax professional can be critical before funds are distributed.