According to a report released by the Treasury Inspector General for Tax Administration (TIGTA), some United States taxpayers’ rights may have been jeopardized or violated because the Internal Revenue Service (IRS) failed to prove it timely sent notices of federal tax lien filings.
A federal tax lien is created on balance-due cases in which the taxpayer has received a notice demanding payment and has neglected or refused to pay. The IRS files a Notice of Federal Tax Lien (lien notice) to protect its claims against taxpayers who owe delinquent taxes. These lien notices establish the IRS's priority among secured creditors for the taxpayers' property.
TIGTA is legally required, annually, to determine whether tax lien notices issued by the IRS comply with the statutory requirement to notify taxpayers in writing, at their last known address, within five business days of the lien filings. The IRS also has its own procedures for notifying taxpayers’ representatives when federal tax liens are filed.
However, TIGTA found that the IRS may not have always complied with this statutory requirement and does not always follow its own procedures for timely notifying taxpayer representatives of the filing of lien notices. In addition, in situations when a lien notice was returned as undeliverable, TIGTA found that the IRS did not always resend these undeliverable notices, even though it had updated addresses for the taxpayers.
TIGTA recommended that it should be ensured that procedures to address the handling of undelivered lien notices are consistent. The IRS agreed with its recommendation and plans to re-evaluate procedures to ensure they are consistent across the institution and support the timely resolution of undeliverable notices.
“Taxpayers have the right to receive timely notification of the filing of federal tax liens,” said J. Russell George, the TIGTA. “The IRS must ensure that the rights of these taxpayers are adequately protected.”
.Tags: tax | law | business | individuals | individual income tax | tax compliance | United States | Internal Revenue Service (IRS) | compliance | enforcement | Internal Revenue Service (IRS)
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