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GAO-05-26R 1 (2005-01-10)

handle is hein.gao/gaocrptargs0001 and id is 1 raw text is: SGAO --Accountability * Integrity * Reliability United States Government Accountability Office Washington, DC 20548 January 10, 2005 The Honorable Mark W. Everson Commissioner of Internal Revenue Subject: Opportunities to Improve Timeliness of IRS Lien Releases Dear Mr. Everson: Among the Internal Revenue Service's (IRS) many tools to collect outstanding taxes is its ability to use the property of a taxpayer as security for an outstanding tax debt. IRS exercises this power when it files a federal tax lien against the property of a taxpayer.' As part of its tax collection activities, IRS reported filing more than 548,000 tax liens against taxpayer property in fiscal year 2003.2 Since a lien encumbers taxpayer property, IRS's ability to file a lien is a powerful tool in enforcing the tax laws. With this power, however, comes the responsibility to ensure that liens are released timely once taxpayers satisfy their tax debt. The Internal Revenue Code (IRC) addresses timeliness by requiring IRS to release liens within 30 days of the tax debt's satisfaction. If IRS fails to timely release federal tax liens, taxpayers can suffer undue hardship and burden. Because federal tax liens appear on commercial credit reports, * businesses may be unable to obtain necessary credit because lenders may assume they are bad credit risks, * individuals may miss an opportunity to buy a home or an automobile because they are unable to obtain financing, and * individuals may be unable to sell their home because of the presence of a tax lien on their property. 'Under section 6321 of the Internal Revenue Code, IRS has the authority to file a lien upon all property and rights to property, whether real or personal, of a delinquent taxpayer. 2IRS can file multiple liens against a taxpayer to cover property the taxpayer owns in different geographical locations. 3Under section 6325 of the Internal Revenue Code, IRS is required to release a federal tax lien within 30 days after the tax liability has been satisfied, has become legally unenforceable, or the Secretary of the Treasury has accepted a bond for the assessed tax. GAO-05-26R IRS Lien Management Report

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