The number of notices of federal tax lien has declined significantly since 2010, according to a
Last year, 179,000 NFTLs were filed, down roughly 84% from the high in 2010 of nearly 1.1 million. Since the peak, filings have generally declined, reaching a low of 157,000 in 2022.
The Internal Revenue Service sometimes uses liens to collect delinquent taxes from taxpayers. When the IRS first files an NFTL, it must notify taxpayers in writing within five business days of their right to a hearing before the IRS's Office of Appeals. TIGTA found the IRS properly notified three out of four taxpayers, when analyzing a sample of more than 103,000 filings. Of that sample, 270 taxpayers were potentially not timely mailed a notice.
TIGTA recommended the IRS:
- Take corrective action on the cases identified in the statistical sample in which the lien notice was not mailed timely;
- Ensure that the corrective actions initiated on the cases systematically identified are completed, and safeguards are implemented to protect against the recurrence of the causal issues;
- Direct the Director, Collection, to establish Field Collection Internal Revenue Manual procedures that prohibit field employees from taking levy action during the 30-calendar-day period that the law provides taxpayers can elect CDP hearings;
- Apply the retention standard when evaluating IRS Collection employees, managers and executives who intentionally disregard IRS policies designed to protect taxpayers; and,
- Review disaster procedures for NFTL processing and consider updates, as needed, to reduce burden for taxpayers impacted by disasters.
The IRS agreed with four of the five recommendations. It did not agree with the third recommendation to establish Field Collection IRM procedures to prohibit field employees from taking levy action on taxpayers during the period the law provides taxpayers to elect a lien CDP hearing, which potentially impacted 5,801 taxpayers.
