The Internal Revenue Code (IRC), provides the IRS a powerful tool allowing the government to protect the taxpaying public's interest in collecting the proper amount of tax revenues. This tool is the federal tax lien.

The federal tax lien provided under IRC 6321, which is sometimes called the "statutory lien," is the basis for the government’s claim against the taxpayer’s property, including current and future rights to property, and enables collection of the tax or tax-related debt of the individual or business.

While the federal tax lien protects the government’s interest, a Notice of Federal Tax Lien (NFTL) is needed for the federal tax lien to compete with certain classes of creditors. When filed, the NFTL puts third parties on notice of a taxpayer’s outstanding lien.

Throughout the life of the federal tax lien, situations may arise involving the lien. The resolution to these situations can vary and is guided by the IRC, Treasury Regulations (Regs), IRS policy, and IRM procedures.

The authorities for the lien program are found in the following IRC and regulation sections:

The following Policy Statements and Delegation Orders regulate NFTL filing.

The Director, Collection Policy is responsible for overseeing policy and procedures regarding the lien program.

Employees authorized to make determinations regarding lien actions are responsible for following applicable procedures and policy.

Managers are responsible for ensuring that lien actions taken by employees are in accordance with policy and procedures.

The Centralized Lien Operation (CLO), which often is informally referred to as the "Lien Unit," has primary responsibility for inputting information to, and processing lien documents generated by, the Automated Lien System (ALS).

Any employee who requests, manually prepares, or approves NFTLs and lien-related documents is responsible for ensuring the request or document is accurate and complete. The requestor/preparer is ultimately responsible to see that the NFTL document is filed appropriately.

Other roles and responsibilities related to the lien program are shown in IRM 5.12.1.5, IRS Organizations Working Lien Issues, and its subsections.

IRM 5.12.1.6, Locations of IRM 5.12 Content, identifies IRM sections associated with NFTL determinations, filing, withdrawal, maintenance, and release. It is within the specific IRMs that lien program responsibilities, instructions, and procedures are identified.

The Automated Lien System (ALS) electronically stores data regarding NFTLs and is the data source for reports on NFTL filings, releases, withdrawals, and revocations.

Specific case activity on lien issues may be documented on one of several other systems.

The systems described in (2) and the ENTITY Case Management System can also generate certain, unique reports related to lien processes to assist in managing assigned inventory.

Activity in the lien program is reviewed and documented in numerous ways, including those shown on the following chart.

NFTLs are created and maintained through ALS. CLO is primarily responsible for updating and maintaining ALS data.

Access to systems used in filing NFTLs is controlled following standard access guidelines through the Online (OL) 5081.

Authority to issue federal tax lien certificates is restricted in accordance with IRM 1.2.44.5, Delegation Order 5-4 (rev. 3), with certain lien certificates being subject to additional managerial or procedural review, as defined throughout IRM 5.12 sections.

There are numerous reports that monitor NFTL filings and ALS activity. See the ALS User Guide, Chapter 15, Logs and Reports, for a complete listing of ALS reports.

For closed records associated with NFTLs, see Document 12990, Records Control Schedules, the Tax Administration - Collection (RCS 28), in PART IV - Delinquent Accounts, Delinquent Returns, And Office Services Records.

The table below differentiates between key terms used in the lien program.

Acronyms associated with the lien program are shown in Exhibit 5.12.1-2, Glossary of Common Acronyms in IRM 5.12.

The form used to provide notice of the lien is Form 668(Y)(c), Notice of Federal Tax Lien. The form, when properly annotated, is also used for NFTL variations, including amended and special condition NFTLs.

Throughout this IRM section, information is provided regarding other documents, websites, and job aids related to the lien program.

IRM 5.17.2, Legal Reference Guide for Revenue Officers, Federal Tax Liens, provides additional details about lien law such as the types of property subject to the federal tax lien and the priority of the federal tax lien versus other competing encumbrances.

Links to tools and references to assist IRS employees with lien processes may also be found on the My SB/SE website. Similar information for taxpayers may be found on the Understanding a Federal Tax Lien page on IRS.gov.

Taxpayer rights with regard to Internal Revenue Service processes are stipulated in IRC 7803(a)(3) and referenced throughout the IRM 5.12 sections.

Generally, lien priorities are determined by "the first in time, first in right" rule. Under that rule, the Service relies on the date of assessment, which is the date the lien arises. However, IRC 6323 provides deviations from the general rule.

Lien priorities are fully explained in IRM 5.17.2, Federal Tax Liens.

Because other creditors become aware of the outstanding tax debt through the NFTL filing, the NFTL may impact the taxpayer’s credit rating or their ability to get credit (such as a loan, credit card, or lease). That is why it is so important that taxpayers resolve liabilities as quickly as possible, before an NFTL filing becomes necessary.

The IRS Office of Appeals handles formal appeals through either Collection Due Process (CDP) or the Collection Appeals Program (CAP). See IRM 5.12.6, Appeals Processes Involving Liens, for specific lien program appeal instructions or see IRM 5.1.9Collection Appeal Rights, for general Collection appeal instructions.

The Appeals IRMs on CDP and CAP procedures for NFTL filings are IRM 8.22, Collection Due Process, and IRM 8.24, Collection Appeals Program and Jeopardy Levy Appeals.

The appeal rights available to a taxpayer in the collection process are described in Pub 1660, Collection Appeal Rights.

Web sites containing educational assistance about the Appeals' organization and the appeals process include the following external sites:

Taxpayers often contact the Taxpayer Advocate Service (TAS) when they are attempting to resolve collection issues.

Refer a taxpayer to TAS if they ask to be referred or they meet TAS criteria and their issue cannot be resolved the "same day" (within 24 hours).

To refer a taxpayer case to TAS, complete Form 911 or e-Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance order). See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, for more information.

Web sites for more information about TAS include the following:

For the purpose of lien payoffs, a "third party" is any individual or entity not liable for the outstanding tax debt or who otherwise does not have a material interest as defined under IRC 6103(e).

Authorized employees may disclose the amount of the outstanding obligation secured by the NFTL to a third party when one of the following is present:

Taxpayers may authorize disclosure telephonically. Verify the taxpayer’s identity using approved functional procedures and document the case history about the authorization, including the following:

Any person, other than the taxpayer or their designee, desiring information as to the amount of the outstanding obligation in order to decide whether to acquire the property covered by the lien (when an NFTL has been filed) must submit a written request stating the reason(s) the information is needed and properly identifying the NFTL in question. Also, a prospective purchaser should attach a copy of the sales contract or a lender loan application.

Disclose information only for the tax liabilities included in the authorization. Information about liabilities not on an NFTL should not be disclosed to a third party without obtaining the taxpayer’s authorization, either orally or in writing. Document taxpayer authorizations in the case history.

Seek advice from Area Counsel in situations where the taxpayer’s authorization cannot be obtained (e.g., taxpayer is medically incapacitated, taxpayer is on vacation outside the U.S. and cannot be reached, etc.).

The following table shows the NFTL documents associated with IRC 6323 and IRC 6324. All the documents can be generated and printed by ALS except as noted below.

The following table shows the documents used to withdraw NFTLs filed under IRC 6323. All the documents can be generated and printed by ALS.

Whenever an NFTL has been filed and the total liability included on the NFTL has been satisfied or becomes unenforceable, a release document is required to notify creditors of the lien's change in status. See IRM 5.12.3, Lien Release and Related Topics, for further information.

The following table shows release documents associated with IRC 6325 and IRC 6326. All the documents can be generated and printed by ALS except as noted below.

The Form 668(Y) can also serve as a lien release document. The Form 668(Y) contains a statement that says if the NFTL is not refiled by the Last Day for Refiling shown, the Form 668(Y) will operate as a certificate of release. See IRM 5.12.3.4.1.1, Self-Releasing Lien, for further information.

If a lien has been erroneously or inadvertently released but the collection statute remains open, the release must be revoked to re-establish the statutory lien. The following table shows certificates used in the revocation process. All the documents can be generated and printed by ALS.

After an NFTL has been filed and before the lien can be released, situations can arise in which the effect of the lien on specific property has to be addressed. IRC 6325 provides provisions to address these situations, which include the following:

The following table shows certificates used to address the attachment of a lien to identified property. These certificates are not generated by ALS nor processed through CLO. These certificates are normally processed through Advisory.

It may also be necessary to address the IRS’ redemption rights regarding property sold at a foreclosure initiated by a third party creditor. A release of right of redemption waives the opportunity for the government to redeem real property from a foreclosure sale purchaser. The following table shows certificates used in foreclosure cases.

Note: OBD-225 is a Department of Justice form.

The table below shows various forms and publications (Pubs) for taxpayers to use when requesting lien certificates.

Prospective applicants should be reminded of other online resources available, such as Pub 4235, Collection Advisory Group Addresses, and the tutorial videos for applications. See IRM 5.12.1.8, Other Online Resources for Lien Program.

The table below shows various publications related to the Foreclosure and Redemption programs.

The table below shows various forms used by employees to report the results of an investigation relative to the lien program. See IRM 5.12.10, Lien Related Certificates, and IRM 5.12.4, Judicial/Non-Judicial Foreclosures, for further details.

The following table shows miscellaneous documents associated with the lien program.

The table below shows the letters associated with filing an NFTL. See IRM 5.12.7, Notice of Lien Preparation and Filing, and IRM 5.12.6, Appeals Processes Involving Liens, for additional information.

The table below shows the letters associated with NFTL withdrawals. See IRM 5.12.9, Withdrawal of Notice of Federal Tax Lien, for additional information.

The table below shows the letters associated with lien releases and claims under IRC 6326 and IRC 7432. See IRM 5.12.3, Lien Release and Related Topics, for additional information.

The table below shows the letters associated with discharges, subordinations, and other lien-related certificates. See IRM 5.12.10, Lien Related Certificates, for additional information.

The table below shows the letters associated with estate and gift tax cases. See IRM 5.5.8, Estate Tax Liens, for additional information.

The table below shows the letters associated with non-judicial foreclosures and any type of foreclosure redemption. See IRM 5.12.4, Judicial/Non-Judicial Foreclosures, and IRM 5.12.5, Redemptions, for additional information.

The FORT is CLO’s technical resource for NFTL issues, ALS coordination, and elevated recording situations. A staff revenue officer/advisor is available to assist with more complex issues.

Referrals to the FORT generally come from the CLO teams, but they may also come from recording offices, field employees, and other internal or external sources.

FORT responsibilities may include, but are not limited to, the following:

As needed, the FORT works with Headquarters Analysts, Governmental Liaisons, and Counsel to address issues beyond their control.

For more information about the FORT, see IRM 5.19.12.8, Field Office Resource Team (FORT).

The ALS Coordinator is located in the FORT at CLO. The primary responsibility of the Coordinator is to maintain the ALS system, which includes the following:

The Coordinator also assists with ALS secondary passwords for those users with advanced permissions in ALS.

For changes to POD addresses, group numbers, or county/zip code matches in ALS, contact the local IQA, who will coordinate the changes with the ALS Coordinator.

ALS Coordinator information can be found through the CLO Contact Page on the ALS web page.

Collection Policy governs most aspects of the ALS system, including determining the access levels generally needed for each position type. See IRM Exhibit 5.12.1-1, ALS Permissions Chart. The ALS Coordinator ensures permissions are accurate and current using information provided by functional managers. Questions about access should be directed to the ALS Coordinator.

Request for ALS access is done through an Online (OL) 5081. In the request, new users should indicate the type of access or permissions required (e.g., research, create, approval, temporary access vs. permanent). Detailed instructions on requesting ALS access can be found in Chapter 1 of the ALS User Guide.

ALS access requests must include the employee’s IDRS TSIGN number. Employees cannot be added to ALS without a TSIGN. ALS uses the TSIGN number to associate lien requestor, and approver, information with lien documents. Therefore, ALS access requests cannot be processed unless an employee’s TSIGN is provided.

If an ALS user experiences problems accessing the system and needs their password reset, there are different procedures depending on the password involved.

Subsequent changes affecting the user's account, such as requests for additional permissions or removal of permissions, should be approved by the employee’s manager and submitted via OL5081. Provide the following employee information to the ALS Coordinator:

The ALS coordinator works with the employee's manager and/or the Lien Program Policy Analyst, when necessary, to ensure proper permissions are given.

Deleting employees from ALS requires the functional manager′s approval, including those requests received from systems administrators. Also, use the OL5081 process to remove retired or resigned employees from the database immediately upon notification.

The ALS Coordinator is responsible for updates to user profiles. Passwords are generally responded to within three (3) days of request receipt.

Recording offices normally charge a fee to record documents presented for filing. The amount charged varies by recording office and the type of document. CLO maintains information in ALS about the amounts charged by each recording office.

When CLO processes NFTL documents for filing, CLO builds a Billing Support Voucher (BSV) for all the documents to be filed in that recording office and ALS calculates the total filing fee to be paid. After mailing the batch of NFTL documents for filing, CLO enters payment certification into ALS, which triggers an electronic payment to the recording office through the Integrated Financial System (IFS). See IRM 5.19.12.3.2, Billing Support Voucher, for further information.

All NFTL documents, including manually-prepared ones, should be filed through CLO so that they can be included in the BSV payment process. In the rare situation where exigent circumstances exist and the NFTL document must be hand-carried to the recording office for filing, the employee presenting the document to the recording office is responsible for ensuring the filing fee is paid. See IRM 5.12.7.10.5, Hand-Carried NFTL for Filing, for detailed procedures.

Lien-related certificates, such as those for discharge, subordination, and non-attachment, are not filed by IRS, but are issued directly to the taxpayer or a third party. It is the responsibility of the taxpayer or third party that presents the certificate for filing to pay any fees charged by the recording office.

Master File generally updates its systems during the first two to three cycles of the calendar year. This period is known as the "dead cycles."

During the dead cycles, CLO continues to process documents in accordance with established time frames; however, Master File does not post transaction codes regarding NFTL filings.

Also during the dead cycles, Master File does not post satisfying transactions nor does it provide Status 12 indicators to ALS, which impacts the systemic release process. Irrespective of the dead cycles, certificates of release must be issued within the 30-day time frame established by IRC 6325(a).

While working a case, if the liability(s) on the NFTL is fully satisfied during the dead cycles, a certificate of release should be manually requested through ALS. See IRM 5.12.3.3, Lien Release Conditions.

Transaction codes for lien documents processed during the dead cycles will post when Master File is back on line.