Taxpayer May Not Be Properly Notified of IRS Liens

The Treasury Inspector General for Tax Administration (TIGTA) noted in a recent report that taxpayers and their representatives may not be receiving proper notification when tax liens are issued. TIGTA found that 2 of 125 liens may not have been properly sent to the taxpayer and 6 of 31 (31 of 125 taxpayers had valid authorized representatives) liens were not properly sent to the representative. Using direct projection, TIGTA estimated that over 15,000 taxpayers might been affected by personal failure to be notified and about 60,000 representatives may not have been fully prepared by IRS notification.

The failure to notify representatives is more significant than it might appear; many taxpayers are quite dependent on their representatives/preparers on tax issues. In some ways, this finding is not as bad as it looks (TIGTA estimates that over 98% of taxpayers undergoing liens are properly notified) but for those who are not properly notified, an already intimidating prospect becomes even scarier. Of course, taxpayers could pay their taxes (or send appeals for compromise if in awful financial straits) and avoid the lien in the first place.