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Tax lien notices don't always reach taxpayers

As with most Internal Revenue Service correspondence, tax lien notices are sent through the mail. Undelivered lien notices can present a problem.

Within 14 calendar days of receiving returned letters, agency employees must complete address verification and resolve the undelivered lien notices. A report by the Treasury Inspector General for Tax Administration (TIGTA) found that IRS employees did not always follow this procedure. TIGTA recommended the IRS develop a better policy to handle returned tax lien notices.

Of the returned notices that TIGTA reviewed, IRS employees did not complete the research required in 15 of the 189 lien notices - approximately 8 percent (three were in California from the Fresno office). The issue related to the letters marked with multiple reasons, such as undeliverable and unclaimed.

The review also uncovered that the IRS does not always provide taxpayer representatives, such as tax attorneys, with copies of all correspondence. In six of 36 sample cases audited in the annual review, representatives did not receive notice of Notice of Federal Tax Lien (NFTL) filings. The TIGTA estimate was that more than 24,000 taxpayers could have been negatively affected.

The IRS agreed to take corrective action and implement new policies.

Luckily, a federal tax lien is not the first step in the process when a taxpayer owes back taxes. Other correspondence will first address the tax deficiency. After a move, provide the U.S. postal service with a forwarding address to ensure you receive any correspondence. 

While you can generally assume your attorney receives copies of all documents you receive from the IRS, when you have concerns or questions make sure to ask.

Source: Accounting Today, “IRS Tax Lien Notices Didn’t Reach Taxpayers of Their Representatives,” Michael Cohn, July 23, 2015

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