THE IRS TAX PROCEDURE FOR THE FILING OF THE FEDERAL TAX LIEN
The INTERNAL REVENUE SERVICE is required to make reasonable efforts to contact the taxpayer before filing a NOTICE OF THE FEDERAL TAX LIEN. The efforts to contact the taxpayer are to advise that a NFTL may be filed if full payment is not made when requested.
Issuance of the statutory assessment notice and the balance due notices sent during the collection process will constitute reasonable efforts.
Publication 594 (IRS Collection Process), CP 501 (Balance Due – Reminder), CP 504 (Balance Due – Urgent Notice), and Letter 1058 (Final Notice – Intent to Levy), advises the taxpayer that a NFTL may be filed.
Also the ACS letters LT-39 (Reminder Notice) and LT-11 (Final Notice of Intent to Levy and Your Notice of Your Right to Hearing) warns taxpayers of possible NFTL filing.
While the IRS notices sent in the notice stream are sufficient for filing a NFTL, generally when a NFTL has not been previously filed the revenue officer’s determination with respect to the filing of the NFTL will be done in conjunction with the initial actual contact or initial attempted contact. Contact (request for full payment) may be made by:
1.field contact (preferably).
2. telephone.
3.mailing a notice or letter to the last known address (when appropriate). See IRM 5.11.1.2.1.1 for “last know address” description.
If full payment is not received during initial contact, explain to the taxpayer that a lien may be filed. See below 5.12.2.4.1 for lien filing criteria. Explain the possible effects of the NFTL filing on normal business operations and their credit rating.
If the taxpayer disagrees with the proposed lien filing, advise the taxpayer of their right to appeal under the Collection Appeals Program (CAP). Also explain to the taxpayer their right to request a Collection Due Process (CDP) hearing under IRC 6320 once the lien has been filed. See IRM 5.12.1
