Audit Identifies Kinks In IRS Procedures During The Lien Due Process

Lien notices issued by IRS do not always comply with the legal guidelines contained in Code Sec. 6320, the Treasury Inspector General for Tax Administration (TIGTA) said in an audit released on July 19. (Audit Report No. 2011-30-051) As described in the audit, after filing Notices of Federal Tax Lien, IRS is required to notify the affected taxpayers in writing, at their last known address, within five business days of the lien filings. However, the agency has not always complied with this dictate. Auditors reviewed a statistically valid sample of 125 Federal Tax Liens filed for the 12-month period ending June 30, 2010, and found that IRS mailed “nearly every lien notice in a timely manner.” However, the audit found that proof of mailing could not always be located, which “could result in violations of taxpayers' rights,” TIGTA said. In addition, the audit found that IRS did not always comply with its own regulations for notifying taxpayers' representatives of the filing of lien notices. IRS regulations require that taxpayer representatives be given copies of all correspondence issued to the taxpayer. TIGTA estimated that more than 32,000 taxpayers “may have been adversely affected because IRS did not follow requirements to notify the taxpayers and their representatives of the taxpayers' rights related to liens.” The audit is located at http://www.treasury.gov/tigta/auditreports/2011reports/201130051fr.pdf.