As we have noted in our prior posts, no one actually wants to receive a tax lien. Most would agree that IRS liens are the bane of one’s existence. However, if a tax lien is initiated against a taxpayer, the federal government has a legal obligation to send notice of the lien to the taxpayer’s last known address. The government is also charged to use care in ensuring that a taxpayer’s address information properly updated.
According to a recent accountingtoday.com report, the IRS reportedly failed to send tax lien notices to the right address, even though it had updated information. The Treasury Inspector General for Tax Administration (TIGTA) reportedly found several instances where Section 6320(a) was not followed. Essentially, lien notices were not sent to a taxpayer’s secondary address even though it was on file and the primary address was deemed undeliverable.
Further, the TIGTA report noted that tax lien notices were not properly sent to other tax representatives, including lawyers and certified pubic accountants. In all, more than 22,000 taxpayers could have been adversely affected and even denied the chance to formally challenge the liens.
TIGTA made several recommendations to improve the reliability of the notification process, including programming changes to taxpayer accounts to include several addresses that may available in the event the primary address is deemed undeliverable. Also courtesy copies of lien notifications should be made available to automated collection employees, and that the mailing status of lien notices should be appropriately updated.
Indeed, the IRS thought it appropriate to adopt these recommendations, but it remains to be seen whether they will be fully implemented in time for the next filing year.