TaxByte 2016-25

Notice of Federal Tax Lien Processes are not Always Timely Mailed

Fiscal Year 2016 Statutory Review of Compliance with Notice of Federal Tax Lien Due Process Procedures, released July 7, 2016 was a mixed review of the IRS Federal Lien Process.  The annual report is required by law to ensure that IRS lien notices are timely sent to taxpayers and the notices comply with § 6320(a) of the IRC.

The review was mixed, finding that the valid statistical sample was mailed timely and complied with the provisions of the code, whereas the undelivered lien notices were sent to a former address even though the correct address appeared on the IRS systems. Many of these notices were to have been sent to a secondary taxpayer.  TIGTA made three recommendations to ensure the lien process worked more efficiently and IRS agreed to implement. IRS will need to:

  • Determine if programming changes are viable for the systemic upload and use of the secondary taxpayer’s last known address for mailing lien notices for NFTLs with joint liabilities, and require employees requesting an NFTL involving joint liability to research for the last known address of the secondary spouse;
  • Make the procedures pertaining to courtesy copies of lien notices applicable to Automated Collection System employees
  • Remind employees to update the mail status of the lien notice with the appropriate transaction code and action code combination