How long does it normally take the IRS to file a tax lien on someone who owes taxes?

My friend owes 5K from 2007 taxes but just received a letter about the proposed debt a month ago. She did respond to the letter but she is afraid they will put a levy on her bank account and/or wages. She is unable to pay the debt in full all at once. Will the IRS give her the chance to make payments on the debt or will they automatically put a federal lien on her assets if it all is not paid at once?

Public Comments

1. she can call the irs to set up payment arrangements.
2. Liens and levies are two very different tools. One is pretty common and the other much less so. Let's start with levies, the worst of the lot. As long as you respond to the IRS and set up an acceptable payment plan and stick to it, you have nothing to fear from levies, i.e. the involuntary seizure of wages and bank accounts. That's a last ditch measure reserved for scofflaws who ignore less intrusive attempts to collect the uncontested amounts that the taxpayer owes. Tax liens on the other hand are commonly used to protect the IRS interests in collection of unpaid tax. The purpose is to ensure that a taxpayer with an outstanding debt cannot liquidate their assets and abscond with the proceeds without clearing the debt. If the debt is modest and the taxpayer is making a good faith effort to clear the debt they may not resort to issuing a tax lien. And once a lien is released it falls off of your credit record as if it never existed in the first place since a judgment is not involved.
3. If the debt can be paid within five years--this would require a payment of about $100 per month--IRS will grant an installment agreement with no hassle and won't file a Notice of Lien. Ordinarily it does not file liens for accounts with less than $5,000 due. If an installment agreement is put in place before the fourth balance due notice is sent, the late payment penalty is reduced from 1/2% per month to 1/4%.