A report issued by the Treasury Inspector General for Tax Administration (TIGTA) says the IRS does not always follow legal requirements when issuing liens and lien notices. The report also concludes that, as a result, action is needed to protect taxpayer rights during the lien process.

A federal tax lien arises when the IRS attaches a taxpayer’s assets for the amount of the taxpayer’s unpaid tax. The Service is authorized to issue liens under IRC § 6321. IRS Data Book figures show that the number of liens filed by the IRS more than tripled between 2000 and 2009, growing from 287,517 to 965,618.

As part of the lien attachment process, the IRS files a lien notice in the appropriate local government office to notify interested parties that the lien exists. The IRS is also required to notify taxpayers within five business days of the filing of a lien notice (IRC § 6320). The taxpayer then has 30 days to request a hearing with the IRS Appeals office.

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