Whenever you owe Uncle Sam and don’t pay, a claim against you by the US Treasury arises by law. This claim is called a tax lien. The lien automatically attaches to pretty much everything you own or have a right to—your home, your bank account, your paychecks.
The initial IRS notice is not public infomration; for this reason it’s called a ‘secret’ or ‘statutory’ lien. If you don’t pay within 30 days, however, thet IRS has a right to file a notice in the public records showing your tax debt. The federal government issues over ½ million notices each year. It’s officially called a Notice of Federal Tax Lien, and will be recorded in the city or county courthouse where you work, live, or own real estate.
Just as a recorded mortgage tells anyone who searches the public records or pulls a credit report that you owe the mortgage company, a Notice of Federal Tax Lien tells the world you owe the IRS. It damages your credit rating, scares off potential creditors, and makes it difficult to finance future purchases.