Internal Revenue Code (IRC) § 6321 states: "if any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property..." This federal tax lien, 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, to enable collection of the tax or tax-related debt of the individual or business.

While the federal tax lien is the bedrock of all collection actions and protects the government’s interest in litigation, 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 the government’s outstanding lien against the taxpayer’s property and rights to property. It ensures a purchaser addresses an existing federal tax lien when property attached by the lien is sold. Unless the Service files its NFTL first, the holder of a security interest, mechanic’s lienor, and judgment lien creditor will have priority over the federal tax lien. If the Service files an NFTL, the tax lien will generally have priority to a taxpayer’s after-acquired property.

The authority for NFTLs are found in the following code 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 NFTL filing.

Employees that request NFTL filings are responsible for providing accurate information. Employees manually preparing an NFTL are responsible for ensuring the accuracy of the document.

Employees authorized to make determinations regarding specific lien actions are responsible for ensuring procedures are properly followed.

Managers are responsible for ensuring an employees is duly delegated to file an NFTL and that lien actions are in accordance with policy and procedures.

The Centralized Lien Operation (CLO) has primary responsibility for inputting information to, and processing lien documents generated by, the Automated Lien System (ALS).

Other roles and responsibilities related to the lien program can be found 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 locations 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.

NFTL activity is reviewed and documented in numerous ways, including those shown on the following chart.

NFTLs are created and maintained through ALS. The Centralized Lien Operation (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.

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, Item 43, Notice of Federal Tax Lien and Certificate of Release of Federal Tax Lien.

The table below list key terms used in this section.

The table below lists common acronyms used in the lien program and throughout this IRM.

See IRM Exhibit 5.12.1-2, Glossary of Common Acronyms in IRM 5.12, for a listing of other common terms and acronyms used in federal tax lien program.

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.

When an NFTL is filed, the appropriate letter shown below is issued. See IRM 5.12.6, Appeals Processes Involving Liens, for additional details.

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.

IRM 5.12.1, Lien Program Overview, provides additional information, websites, and job aids related to the lien program.

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.

Notices of Federal Tax Lien (except estate tax liens) will be filed through the ALS.

Generally, an NFTL is systemically created in ALS from ICS or ACS data uploads. When possible, use the appropriate ICS or ACS process to request the NFTL (see ICS User Guide, Chapter 13, Federal Tax Lien or IRM 5.19.4.6.1, How to File a NFTL.

ICS users should update any incomplete address on ICS prior to requesting the NFTL through ICS.

Revenue officers must check their ICS notifications daily for rejects of NFTL requests. Rejects must be resolved and the NFTL request re-input or the NFTL will not be filed. ALS will reject to the originator:

When the NFTL request cannot be completed systemically, complete Form 12636, Request for Filing or Refiling Notice of Federal Tax Lien and secure email the form to CLO (*SBSE CLO Liens Team 301).

If ALS is used to create the NFTL, follow instructions in the ALS User Guide which can be accessed from the Automated Lien System web site.

All TINs should be partially redacted (e.g., xx-xxx-1234) on all lien documents.

DO NOT request an NFTL with a TIN or "Local" in the street address line; numbers without a street name (e.g., 12222); or a blank street name.

If an NFTL is rejected by the recording office, CLO will secure email the originator, attach a copy of the rejected document, and explain the reason for the rejection.

The following information is used to create and maintain NFTL information in ALS:

If the user does not have access to ICS, ACS, or the ALS permissions to file or refile an NFTL, submit the request by secure email to CLO (*SBSE CLO Liens Team 301). See IRM Exhibit 5.12.1-1, ALS Permissions Chart.

CLO will complete requests received from revenue officers, Advisory, Insolvency, and other delegated functions. These requests from revenue officers should be restricted to instances where the requestor does not have access to ICS or the NFTL cannot be filed through ICS, (e.g., there is a access computer problem or some other impediment to access). Requests for NFTL filings from Advisory and Insolvency should also be limited because of existing ALS permissions in these functions to create NFTLs and other lien documents in ALS.

There are several types of employees who do not have cases assigned to them on ICS or ACS such as employees in the walk-in, correspondence, Appeals, Examination (Innocent Spouse examiners), and toll free areas. These and other employees may be able to research NFTL information using ALS, but do not have the capability to create documents in ALS or systemically request them.

For those employees needing to file an NFTL who either do not have access or the special conditions for the NFTL do not fall within normal parameters, the Form 12636 is used to provide the needed information to CLO in order for them to create the needed document in ALS. Form 12636 is a PDF fillable form which can be saved to your computer and is found through the publishing catalog.

Send Form 12636 by secure email to CLO (*SBSE CLO Liens Team 301) for preparation of the NFTL.

Prior to submission the requesting employee should review Form 12636 to determine if all the information required to prepare the NFTL, including name and telephone number of the contact person for generation of the CDP notice, has been provided. This information is not available in CLO.

The employee requesting the NFTL must provide the entity information regarding any co-obligors (e.g. spouse, partners, etc.) and POA.

Requests received by CLO will be input to ALS within five (5) business days of receiving the request. See IRM 5.19.12.2.1, Notice of Federal Tax Lien Requests.

ACS Support has responsibility for CDP follow up for walk-in, correspondence, Appeals, Examination (Innocent Spouse examiners), and toll free areas.

Employees with ALS access may research using the taxpayer's TIN to determine if the NFTL has been created.

Employees who need to prepare an NFTL for immediate filing and who do not have access to ICS, need to either generate a SLID (Serial Lien Identification) number on ALS or contact CLO to secure a SLID.

The SLID is created by inputting all required information into ALS. If the employee does not have ALS input capabilities, secure email Form 12636 to the appropriate CLO team requesting that a SLID be issued immediately.

Request that the printing of the NFTL and the CDP notice be suppressed before the SLID is generated. If printing is not suppressed, a duplicate NFTL will be systemically generated. The CDP notice(s) for a manually prepared NFTL should be prepared and processed outside of ALS.

Type the NFTL information, including the SLID number obtained from ALS, into Form 668(Y)(c).

Print the manually prepared NFTL on your local printer.

Make arrangements with a field employee to have the NFTL hand-carried to the recording office. Filing fees are to be paid by the employee and added to the employee's travel voucher for reimbursement. See IRM 5.12.7.10.5, Hand-Carried NFTL for Filing.

After filing, the stamped document will be returned to the originator, who is responsible for inputting recording data on ALS within four (4) calendar days of filing the NFTL. If the employee does not have ALS input capabilities, the complete recording information must be sent via secure email to CLO with the request that it be input to ALS.

A revenue officer needing to hand-carry an NFTL for immediate filing should utilize the manual ICS NFTL process to receive a SLID. An ICS systemically created SLID is recognized by ALS.

Type the NFTL information, including serial number obtained from ICS, into the ICS template Form 668(Y)(c).

After input is complete, print the ICS template NFTL on your local printer.

When hand-carried to the recording office, filing fees are to be paid by the employee and added to the employee's travel voucher for reimbursement. See IRM 5.12.7.10.5, Hand-Carried NFTL for Filing.

Revenue officers are responsible for inputting recording data within four (4) calendar days of filing the NFTL. If the RO does not have ALS input capabilities, the complete recording information (including the taxpayer's name and TIN or the NFTL SLID) must be secure emailed to CLO (*SBSE CLO Liens Team 301) for ALS input.

The abbreviation ‘d/b/a’ for ‘doing business as’ should be used only when an individual is actually doing business as a sole proprietor under a trade name (e.g., Edwin E. Kelly d/b/a Kelly’s Garage). The abbreviation should never be used in a partnership situation.

The same degree of care should be exercised when using the abbreviation ‘t/a’ for ‘trading as’. This is used where a corporation, partnership, or LLC operates under a trade name other than the corporate, partnership, or LLC name (e.g., Werk Hard, Inc., t/a The Diggers). See also IRM 5.12.7.5.8, Franchises.

If the d/b/a or t/a name is included in the ICS "Secondary" name line field, create a new Name/Address record to include this information on the ICS "Primary Continued" name line field so it will appear on the NFTL.

General partners are individually liable for partnership debts, and separate assessments against them are not essential to sustain their individual liability. The separate liability of the partners is not an issue unless the partnership neglects or fails to pay the assessed liability.

Partnerships normally have one employer identification number (EIN).

A supplemental assessment is not required when adding a general partner’s name to the partnership assessment. The Service's position is that the assessment and statutory lien against the partnership is also an assessment and statutory lien against each general partner.

When filing an NFTL on a single member disregarded LLC entity, whether the name of the single member or the name of the LLC should appear on the NFTL document depends on the tax liability being collected.

For an NFTL filed with respect to collection of liabilities not addressed in (a) or (b) above, you must determine whether the LLC or the single member owner of the LLC is the liable taxpayer. See IRM 5.1.21, Collecting from Limited Liability Companies, for assistance in making that determination. If the single member is the taxpayer then only the name of the single member should be included on the NFTL.

If the NFTL is incorrectly filed in the name of the disregarded LLC and the single member is not listed on the NFTL document, then file a new NFTL in the name of the single member.

If the NFTL is incorrectly filed in the name of the disregarded LLC but the single member owner is also listed on the NFTL document, then correct the filed NFTL by removing the name of the disregarded LLC and referring back to the original NFTL.

The EIN used in the assessment should be used for the NFTL, despite the resulting mismatch between the entity name and the EIN, to ensure systemic notifications for the lien release in the Automated Lien system.

The entity type for the single member will dictate where the NFTL is filed with regard to the recording official specified in a state’s version of the Uniform Federal Lien Registration Act.

When filing an NFTL where the LLC is the liable taxpayer:

When filing an NFTL where the Single Member Owner (SMO) is the liable taxpayer

If the liable taxpayer changes, due to changes in ownership, classification or regulations, special actions may be required:

Taxpayers may change names after the NFTL has been filed. To avoid disputes over lien priority in subsequently acquired assets, amend the NFTL to reflect the name or alias.

It is important to ensure that the name on the NFTL can be identified by public records searchers. Use the ALS AMEND application to correct an NFTL of this nature thus protecting the priority of the original NFTL. See IRM 5.12.7.9.3, Amending the NFTL Using the ALS Amend Option.

The ALS AMEND application will supply the verbiage to connect the amended NFTL to the original NFTL. Use Form 13809 to request CLO amend the original NFTL.

Follow the Amend procedure when the taxpayer’s name has been misspelled. See IRM 5.17.2.3.5, Effect of Errors in Notice of Federal Tax Lien for guidelines on whether the error makes the NFTL defective.

When an SFR assessment is made against an individual as Married Filing Separate (MFS), that assessment is valid against that individual from the date of the SFR assessment until it is satisfied or expires. If the individual subsequently files a return, whether retaining or changing the filing status, the assessment is still valid against that individual from the date of the SFR.

Only the taxpayer and their spouse can elect to file a joint return. So, a taxpayer with an MFS SFR assessment may subsequently file a Married Filing Joint (MFJ) return with their spouse to replace the SFR assessment. When this occurs, the spouses become jointly liable and the joining spouse becomes liable for the tax from the date of the SFR assessment. The CSED for the joining spouse’s liability dates from the SFR assessment and, if applicable, from any additional assessment resulting from the MFJ return.

An NFTL can be filed against a taxpayer with an SFR assessment. If an MFJ return is subsequently filed to replace the SFR (MFS) assessment, no correction or amendment is needed to the NFTL that was previously filed for the SFR assessment. Instead, a new NFTL can be filed to address the MFJ assessment, as shown in the table below.

When an SFR has been assessed against one spouse and then a MFJ return is filed using the joining spouse's SSN as the primary SSN, the wording of the NFTL depends on how the return is processed. For example, was the original SFR adjusted or abated as a result of the MFJ return filed?

Consult Area Counsel as needed with questions about NFTL wording.

A consolidated group is an affiliated group of corporations filing one consolidated tax return for the affiliated corporations. The corporations are connected through stock ownership and share a parent-subsidiary relationship with the Common Parent of the affiliated group (in these situations referred to as a Consolidated Group). The Common Parent of the Consolidated Group files a consolidated income tax return to offset profits and losses of the affiliates.

Treasury Regulation 1.1502-6(a) imposes "several" liability for the consolidated tax liability of the group as a whole on the common parent and on each subsidiary which was a member of the consolidated group during any part of the consolidated return year. As a result, the IRS may collect from the common parent or from any such subsidiary for the unpaid tax liabilities of the consolidated group for the consolidated return year.

ALS has limited name line space so care must be taken when filing an NFTL for a Consolidated Group. Consult with Area Counsel, if there are questions. When an NFTL needs to be filed and the subsidiaries are too numerous to fit on the name line for ALS, a manual NFTL must be utilized. The manual NFTL can attach a second page listing the names which did not fit on the face of the NFTL. See IRM 5.12.7.4, Manual NFTL Preparation.

Estate and Gift Tax Liens are discussed in IRM 5.5.9, Administrative and Judicial Actions for Estate Taxes.

Notice of the estate tax lien is filed using Form 668-J or Form 668-H, Notice of Federal Estate Tax Lien Under Internal Revenue Laws, and it must be manually prepared. See guidance in IRM 5.5.8.4.1 , Processing Lien Form 668-H.

Estate tax liens have other unique processing issues, including the following:

See IRM 5.5, Decedent Estates and Estate Taxes, for detailed guidance on working estate tax cases.

For federal taxing purposes, a franchise agreement represents a sharing of access to assets or a use of processes and trademarks rather than a business type. There is no federal registry of franchises.

The franchisor (owner) is different from someone who obtains a license, permit, or permissions (the franchisee) regarding use of assets belonging to the franchisor.

Use of a name on a storefront, as part of a franchise agreement, is not the same situation as a corporation owning its own trading name. The NFTL name line should list the taxpayer name for federal purposes.

Do not add "trading as" to a taxpayer entity based solely on a visual impression during a field visit. Using "trading as" in the NFTL name line must be legally accurate.

A research reference for a franchise would be its Federal Trade Commission required Franchise Disclosure Document.

Questions to research regarding the proper name line for a franchisee NFTL:

A nominee is someone designated to act for another. In the context of the federal tax lien, a nominee is generally a third party who holds legal title to property of a taxpayer while the taxpayer enjoys full use and benefit of that property. The statutory lien attaches to all property and rights to property of the taxpayer even if a third party holds legal title. The third party can be any person listed in IRC § 7701 (a) (1).

A nominee situation normally involves a fraudulent conveyance or transfer of a taxpayer’s property to avoid legal obligations. To establish attachment of the statutory lien in a nominee situation, it must be shown that while a third party may have legal title to the property, it is the taxpayer that enjoys the full use and benefit.

Consider the following circumstances when developing your case:

The taxpayer may record fraudulent transfer documents that make it appear as if the transfer of the property was to a valid purchaser prior to the filing of the NFTL. For example, the taxpayer may record a warranty deed showing the alleged purchaser paid fair market value for the property instead of a quit-claim deed for love and affection.

Examples of nominee situations include:

A nominee NFTL may not be filed without the written approval of Area Counsel.

The "‘alter ego’" (second self) doctrine has been summarized as follows: The obligations of a corporation will be recognized as those of another person, and vice versa, where it appears that the corporation is not only influenced and governed by that person, but there is such a unity of interest and ownership that the individuality or separateness, of the person and the corporation has ceased. Also the facts are such that adherence to the fiction of the separate existence of the corporation would, under the particular circumstances, sanction a fraud or promote an injustice. The alter ego question does not concern property rights and should not focus on whether the taxpayer had a state-law enforceable property right in property. Rather, a proper alter ego analysis focuses on which entities are liable for the debt and whether two entities that are formally separate should be regarded as one.

There are two elements to the alter ego doctrine:

Some factors pertinent to a determination to disregard the corporate entity are whether the individual:

Some facts establishing the factors in (3) above are:

Explore the possibility of using the processes of jeopardy, transferee assessment, nominee NFTL, emergency lien foreclosure action, or emergency transferee or fraudulent conveyance suit before filing an NFTL in the name of an alter ego.

Do not file an NFTL in the name of an alter ego without legal review, advice, and written direction from Area Counsel as to:

Refer to the Legal Reference Guide for Revenue Officers, IRM 5.17.2, Federal Tax Liens, for additional information.

The term transferee can be a confusing concept because the term is used in different ways. In the context of this IRM section, transferee refers specifically to when a statutory lien attaches to property and the property has been transferred by the taxpayer through a gift, bequest, devise, or inheritance before an NFTL could be filed. There is no requirement that the taxpayer retain use of or a beneficial interest in the property. With the approval of Area Counsel, a special condition NFTL naming the transferee and the property transferred may be filed. Substantiation for a transferee NFTL filing includes tracing the statutory lien for the assessment through the transfer. Document by confirming that the dates the statutory lien(s) arose occurred prior to the date(s) of transfer. This is also referred to as lien-tracing.

Contact Area Counsel as soon as practicable to discuss making a suit referral to the Department of Justice if there are fraud indicators associated with a property transfer prior to the assessment (i.e. statutory lien arising) and little evidence that the taxpayer controls or enjoys full use and benefit of the property.

Other uses for transferee include:

For more information about transferee situations, see the following references:

Dependent on state law, it may be possible to administratively collect the primary liability of the taxpayer corporation from the successor corporation. Where it is possible to administratively collect the primary liability from the successor, after obtaining the concurrence of Area Counsel, a special condition successor-in-interest NFTL, naming the successor corporation (corporation X, as successor to taxpayer A), should be filed to preserve the government’s priority over other creditors.

For more information about successor-in-interest situations, see the following references:

A successor-in-interest named on a special condition NFTL may be entitled to CDP rights for the filing. Follow the IF THEN chart below to determine if the successor-in-interest (SII) is entitled to CDP rights and always request confirmation from Counsel as to whether the successor-in-interest qualifies for CDP rights.

The request and approval of a special condition NFTL involves a request from a revenue officer, approval by their manager, review by Advisory, and approval by Area Counsel.

Given the geographic diversity of the workforce, all review and approval work will be conducted, whenever possible, through electronic transmissions (generally via secure email).

The Revenue Officer's pre-approval request actions are the first step.

The revenue officer's manager is the second step in the approval process. If the special condition NFTL is a protective action only, consideration must be given to economic factors, and the resources of Field Collection and Area Counsel. Consideration of these factors will be reflected in the request package.

The third step is the review process in Advisory. See IRM 5.12.7.6.5.4, Advisory Review Actions.

The final step is the responsibility of Area Counsel. They must approve all special condition NFTLs and any associated enforcement action, court action, or protective action recommended by the originating revenue officer.

If Area Counsel approves a special condition NFTL and associated enforcement action, generally they return the request package to Advisory (IRM 5.12.7.6.5.4, Advisory Review Actions) with any document perfections needed. There may be occasions because of time and/or inventory considerations where the revenue officer perfects the approved special condition NFTL. In either situation, perfecting the draft NFTL involves following Area Counsel's directions as to the name line, property description, and any other special identifying language.

Generally where a suit is anticipated and even though they have reviewed the draft suit package along with the special condition NFTL request, Area Counsel will need to have the suit package re-presented to them once the special condition NFTL has been filed.

Parties entitled to CDP rights and issuance of Letter 3172, Notice of Federal Tax Lien and your Rights to a Hearing Under IRC 6320:

Parties ONLY entitled to CAP rights:

Manually issue Letter 3177, Special Condition Notice of Federal Tax Lien (NFTL) Filing-Third Party, and related publications after the NFTL has been filed.

The taxpayer and certain qualifying successors-in-interest letters to be issued are:

Letter issued to the third party:

For exigent circumstances or a manually created NFTL, see also:

In determining what additional enforcement action should be taken after filing the special condition NFTL, consideration must be given to the confusion in the chain of title and redemption rights of the taxpayer. These conditions may depress the marketability of any property.

A judicial lien foreclosure or seizure followed by suit to foreclose the lien will generally bring a greater sale price particularly for real property.

The administrative seizure and sale process may be used if prompt action is needed to protect the government's interest. Include any concerns and relevant facts in the request for opinion from Area Counsel.

Special condition NFTL documents and case files are unique in nature and have a need to be kept longer than the normal retention period. This allows for subsequent inquiries, collection actions, and eventual lien releases to be resolved timely.

Advisory will maintain the special condition NFTL, the Area Counsel authorization memorandum, and associated case histories for one year after the underlying tax liability has been satisfied or one year after the statutory period for collection has expired. See item 43 of Document 12990, Records and Information Management Records Control Schedules. Maintenance of the file may include transferring it to the appropriate Records Control Center as long as precautions are in place to ensure that the special condition NFTL may be timely released. Generally there will be other cases related to the special condition NFTL file such as a seizure file or suit to foreclose the lien. It may be appropriate to associate the special condition NFTL file with these other Advisory files.

The revenue officer file would be disposed of following normal procedures.

Releases of special condition NFTL are generally processed in the same manner as regular NFTL. The releases are systemically generated through ALS after ALS is notified by Master File of a satisfied module or ALS notes that the collection period has expired. But the release generated by ALS will have a different appearance from the manually prepared and filed special condition NFTL because ALS has certain limitations associated with name line and property descriptions. A recording office may choose to reject the document as too different from the original filing. If the recording office rejects an ALS generated release:

A request for withdrawal of a special condition NFTL may be considered where all actions related to all the property associated with the special condition NFTL have been concluded but the underlying statutory lien is still open because the taxpayer's liability has not been satisfied. See IRM 5.12.9Withdrawal of Notice of Federal Tax Lien.

Sometimes it is necessary to file an NFTL less than ten (10) calendar days after an assessment is made or before an assessment has posted to IDRS. An NFTL calling for this type of action may be the result of a jeopardy, prompt, termination, or similar type assessment. (See IRM 5.1.4, Jeopardy, Termination, Quick and Prompt Assessments) These NFTLs require special attention in their creation, filing, and follow-up.

It is important that the information on the filed NFTL, ALS, ICS, and IDRS is reflected correctly and consistently. These systems operate on different processing schedules which impacts when and how NFTL filing information posts to IDRS.

Creation of an NFTL with an assessment date less than 10 days old is a multi-part process.

Non-ICS users needing to file an NFTL where the assessment date is less than 10 days old, must work directly with CLO to create the NFTL.

The TC 582 lien indicator and TC 360 filing fee must be manually input to IDRS after the assessment posts. This is the primary responsibility of the NFTL initiator.

An inadvertent lien release is a risk with this type of NFTL because it takes time for the various systems to align their information with one another. The NFTL originator must monitor the status of the module frequently and work with CLO to physically pull any inadvertent releases before they can be mailed to the recording office. Monitor until the assessment is in collection status.

Continue to monitor master file until the TC 360 (filing fee) posts and is the correct amount.

An NFTL may be filed when the CSED of a balance due assessment has been extended. When a new NFTL is filed more than ten (10) years and 30 days after the assessment, special care is needed to ensure a proper filing. These filings, previously known as a "Portland lien," are called an "NFTL After Original CSED" (NAOC).

When requesting a NAOC using Form 12636, it is essential to show the updated CSED for each assessment. If the CSED is in suspense, the CSED field of Form 12636 should show all asterisks (**/**/****) or a future date (e.g., original CSED plus 20 years). The CSED will update on ALS once the suspense status is resolved. Do not put N/A in the CSED field of Form 12636.

Regardless of how long the CSED may have been extended, the generated NFTL will show the next refile by date (column (e)) according to the rules for refiling in IRC § 6323(g). See IRM 5.12.8.3, Refiling Period. When the module is satisfied or the CSED has passed, ALS will systemically release the lien.

The OVDI penalty (also known as Offshore Voluntary Disclosure Program or OVDP) is assessed under Title 26 as an MFT 55 or MFT 13 module using Exam penalty reference numbers 594 - 598. See IRM 20.1.9.1.4, Voluntary Disclosure Special Process.

On the NFTL, the OVDI penalty is reflected in column "a" , Kind of Tax, with the acronym "OVDI" .

An NFTL for these assessments can be requested normally through ICS or by sending a Form 12636 to CLO.

Following the conviction of a defendant for a criminal tax violation or tax-related offense, the court may order the defendant to pay restitution to the IRS. Restitution is discussed in IRM 5.1.5.15, Restitution.

A restitution module posts as a MFT 31 and can be identified by TC 971 with action code (AC) 102. The following codes also appear on the module:

Generally, restitution is ordered against an individual taxpayer and is assessed on the MFT 31 restitution module under the SSN of the defendant taxpayer. While it is possible for a business entity to be both convicted of a tax crime and ordered to pay restitution, it is a rare occurrence. Assessable restitution could arise in any criminal case where restitution is ordered for failure to pay any tax imposed under the IRC. For example, an individual could be ordered to pay restitution for an employment or income tax violation of his or her business. Regardless of the underlying source of the tax loss, the SSN of the individual taxpayer ordered to pay restitution will be used for the MFT 31 account.

The same NFTL determination pre-filing considerations and filing criteria apply for these assessments as apply with other balance due accounts. See IRM 5.12.2, Notice of Lien Determinations.

To differentiate an NFTL filed for restitution-based MFT 31 assessments from those filed for MFT 31 income tax assessments, special wording is used on the NFTL.

When requesting a Restitution NFTL, Do NOT use ICS. Instead complete Form 12636.

In rare situations, circumstances may necessitate that the Restitution NFTL is manually prepared and hand-carried for filing.

The taxpayer must be notified of their Collection Due Process (CDP) rights by the issuance of Letter 3172. The taxpayer is entitled to CDP rights even though the statute allowing the IRS to civilly assess restitution restricts a taxpayer’s ability to challenge the underlying tax liability (IRC § 6201(a)(4)(C)).

If an error is made while preparing the Restitution NFTL (e.g., incorrect type of tax shown, special statement omitted), determine if an amended NFTL is needed. ( IRM 5.12.7.9, NFTL Corrections) Alternatively, consideration may be given to withdrawing the original Restitution NFTL and filing a new one.

The IRC § 6321 statutory lien arises with neglect or refusal to pay, after demand for payment, on both the:

An IRC § 6323 Notice of Federal Tax Lien filing is:

An NFTL may be filed for assessments made in relation to Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, and Form 5500, Annual Return/Report of Employee Benefit Plan; however, the process to create this NFTL differs slightly from normal procedures.

Assessments made for Form 5330 appear on IDRS under MFT 76 and for Form 5500 under MFT 74. Whenever an assessment is made under either of these MFTs, a corresponding plan number is embedded in the assessment.

The same NFTL determination pre-filing considerations and criteria used for other balance due accounts apply for these assessments. See IRM 5.12.2, Notice of Lien Determinations.

To request an NFTL for a MFT 74/76 assessment, complete Form 12636. Do NOT use ICS to request the NFTL. Show the taxpayer’s full, unredacted TIN on the Form 12636 and follow other standard guidance for completing the request, with the exceptions noted below.

Forward the Form 12636 via secure email to the CLO (*SBSE CLO Liens Team 301). In your email, state that the NFTL is for a employee benefit plan.

In rare situations, circumstances may necessitate that the NFTL is manually prepared and hand-carried for filing. Use the ICS Form 668(Y)(c) template to manually prepare the Restitution NFTL. Follow standard guidance for the manual NFTL preparation, giving particular attention to the following items.

Before filing the NFTL, secure a SLID from ALS by forwarding a copy of the NFTL to CLO. DO NOT use ICS to generate a SLID. In your request to CLO, state that the NFTL is for a employee benefit plan assessment and that it is being hand-carried for filing. Also, provide the following details:

When the SLID is provided by CLO, place it on the NFTL and print the NFTL. After filing the document with the appropriate recording office, provide the recording information to CLO.

The taxpayer must be notified of their CDP rights by the issuance of Letter 3172.

It is the responsibility of the employee requesting the NFTL to ensure the transaction codes 582, 360, and 971 AC 252 are input to the respective tax module(s) on IDRS whenever an NFTL is filed.

When a taxpayer has a foreign address OR lives outside the United States and its territories while maintaining a domestic address (e.g., uses their representative's address or a P.O. Box address for social security drop box purposes), file an NFTL with the Washington D.C. Register of Deeds.

If the international taxpayer uses a foreign address as their "last known address" , select international as the filing location in ICS. This will ensure an NFTL is filed in Washington D.C. It will also ensure, when appropriate, that a CDP notice is sent by registered mail to the taxpayer.

If the international taxpayer maintains a domestic address as their "last known address" , select "Washington D.C." as the filing location in ICS. This will ensure an NFTL is filed in Washington D.C. Since the address is clearly domestic, the CDP notice will be sent by certified mail to the taxpayer's domestic address.

For an NFTL requested using Form 12636 rather than ICS, specify "Washington D.C." as the filing location. Also indicate any POAs associated with the case.

The taxpayer's representative should receive a copy of the CDP notice issued. See IRM 5.12.6, Appeals Processes Involving Liens, for other information regarding CDP notices for NFTLs.

The U.S. treaties with Canada, Denmark, France, Netherlands, and Sweden provide for collection assistance. A treaty partner may send a Mutual Collection Assistance Request (MCAR) to the United States Competent Authority, the Office of the Deputy Commissioner (International), LB&I.

The U.S. Competent Authority forwards the MCAR to the MCAR Coordinator, SB/SE International.

If the treaty allows on a case by case basis, the Service may consider taking distraint action against assets located in the U.S. to collect foreign taxes for a treaty partner with the treaty partner's permission. This permission is required because the treaty partner may be responsible for the distraint action costs. Collection may require filing a Notice of Federal Tax Lien but the NFTL filing fees are absorbed by the Service.

For general procedures processing MCAR, see IRM 5.21.7.4, Mutual Collection Assistance Requests (MCAR).

An error may be corrected prior to the NFTL being mailed for filing. Normally this is within two (2) business days of the ICS or ACS request. Contact CLO by secure email to request the correction.

After the document has been mailed for filing, changes generally will not be made to the document. Though sometimes, if necessary, an NFTL that has been mailed might be intercepted at the recording office before it is filed. Contact CLO for assistance in this situation.

If a change is needed after the NFTL has been filed, the NFTL may need to be amended or possibly the change will only need to be a cross reference within ALS. These cross references allow ALS to receive a satisfied status from Master File and correctly associate it with the NFTL filed. This is to ensure that the lien is properly and timely released. .

If changes are made to the NFTL after generation for filing, an ALS history item must be added explaining the change.

Some inaccuracies, such as an incorrect name, will make the NFTL invalid while other inaccuracies such as TIN, MFT and tax period will prevent the module satisfaction notification from posting.

An incorrect NFTL must be linked to the corrected NFTL and/or corrected information.

Module satisfaction notification must be associated with correct TIN/name control and MFT/period and tied back to the incorrect NFTL. This allows a Certificate of Release to be generated for BOTH the correct and incorrect notice upon satisfaction or expiration.

When inaccuracies do not affect the validity of the NFTL, CLO corrects the information using a "not to be filed lien" linking the correct and incorrect information together in ALS. This prevents miscommunication in systemic operations. See IRM 5.12.7.9.2.3, Not to Be Filed NFTL.

Guidance is provided in IRM 5.17.2.3.5, Effect of Errors in Notice of Federal Tax Lien, regarding inaccuracies in the taxpayer’s name as it appears on the notice.

An NFTL that has been filed and where the recording data is available in ALS may be amended using the ALS Amend option. The ALS amend option may not be used if the recording data (i.e., date, book, page, or other recorder information) is not available in ALS.

DO NOT AMEND a filed NFTL to ADD a person or entity. If an additional name is needed, a new NFTL must be filed to add the name (e.g. a separate to joint situation). An amendment is not a legal option.

ALS amendments are restricted to:

Unless special circumstances exist, an NFTL is not amended for an incorrect address only. The address can be changed in conjunction with another correction to the NFTL.

With ALS Permissions to amend the NFTL, follow the instructions in the ALS User Guide Chapter 5, Resolving Lien Errors.

Without ALS Permissions to amend the NFTL, send Form 13809 via secure email to CLO (*SBSE CLO Liens Team 301) including:

An NFTL should be amended within five (5) business days of receipt of request by the appropriate CLO team. Contact the appropriate CLO team if the amended NFTL is not on ALS within that time.

ALS will generate a new CDP notice for amendments to the tax period.

For an NFTL not generated by ALS (nominee, alter ego, transferee NFTL), the requesting employee prepares the amended NFTL document. Secure email scanned documents to the appropriate CLO team for processing.

If the NFTL is related to an abusive tax avoidance (ATAT) situation, notify the ATAT Collection Policy Analyst.

CLO procedures are found in IRM 5.19.12, Centralized Lien Operation.

The Texas Uniform Federal Lien Registration Act, Section 14.004, "Duties of the Filing Officer" specifies in paragraph (a)(2) that county clerks will file federal liens alphabetically in the real property records. If requested by the party submitting the document, it may be entered alphabetically in the personal property index, as appropriate. These additional entries include the same filing and certification information that was entered into the real property records.

Employees requesting an NFTL for Texas should ensure the NFTL is properly filed in real property records.

A revenue officer should use ICS to file an NFTL in any location where their taxpayer owns property.

Before requesting the NFTL determine the proper place of filing and ensure that you are in the correct state where you want the NFTL filed.

Determine whether the NFTL is to reach real or personal property or both. This is necessary as the recording official and/or office may be different in certain states.

A TC 582 will be automatically generated for any NFTL processed through ALS.

An NFTL may be physically removed from the documents being mailed to a recording office. However, an NFTL can only be deleted from ALS if it has not yet appeared on the Billing Support Voucher (BSV).

When an NFTL has been requested in error, the requesting employee may request that the NFTL be removed from documents being mailed to the recording office.

The employee who requested the NFTL can call or secure email CLO asking that the NFTL be removed from the documents being mailed to the recording office.

Requests must be received and CLO actions completed by 5 PM EST on the day the NFTL is printed (Tuesday or Thursday). Timely requests eliminate the generation of the CDP notice.

Request that CLO document ALS with the reason the NFTL is being removed and keep the documentation.

CLO procedures are found in IRM 5.19.12.7.1.1, Request to Stop a Lien Document.

A duplicate NFTL is one filed on a taxpayer with entity, tax period information, and filing location identical to that of a previously filed NFTL. A duplicate may result from the same NFTL being manually and systemically filed in the same recording office due to requester/CLO miscommunication. All employees should research IDRS or ALS before inputting an NFTL request to ensure a duplicate is not requested. Contact CLO immediately if a duplicate situation is identified.

ALS will only prevent the generation of a duplicate NFTL if the duplicate NFTLs are requested the same day. If the NFTL is requested on a subsequent day, ALS will warn of the duplication, but does not prevent the duplication from being processed.

A duplicate NFTL can occur either with the same SLID as the original but have different recording office data or the duplicate could have both a different SLID and different recording office data.

If research indicates a previously recorded NFTL exists, do not request a new NFTL.

If an NFTL is reflected on ALS but there is no recording office data entered, check with CLO to determine whether this NFTL is on the "Lost Lien Report" and is already being addressed by CLO. If it is not on the report, have CLO follow-up with the recording office.

For a duplicate NFTL where the SLIDs are the same (original and duplicate):

For a duplicate NFTL where the SLIDs are different (original and duplicate) take the following actions.

For refiling where a duplicate NFTL has been filed but not withdrawn, provide Area Counsel with the particular situation and ask whether both the original and duplicate will need to be refiled. A duplicate can cause confusion if the duplicate self-releases or appears to self-release.

Both the ALS history and the case history must be documented.

All NFTLs, whether systemically or manually prepared, should be filed through the CLO. If exigent circumstances exist, it may be necessary to immediately file an NFTL. In these rare situations, the NFTL can be hand-carried to the recording office.

Prior to hand-carrying the NFTL for filing, determine the cost charged by the recording office to file the NFTL. ALS contains information regarding the fees charged by each office for routine filings. For an NFTL with multiple pages or special wording, it may be necessary to contact the recording office for cost information.

The employee presenting the document to the recording office for filing is responsible for ensuring the filing fee is paid. Subject to the limitations described below, payment may be accomplished by:

When personal funds or a travel card are used to pay the filing fee, reimbursement may be claimed through submitting a travel voucher or an SF1034,Public Voucher for Purchases and Services Other Than Personal.

If an assigned Enforcement Authority Purchase Card is used, follow standard procurement procedures to create an Integrated Procurement System (IPS) request and present the card to the recording office to pay the filing fee. For information on securing and using a purchase card, follow the guidance in Document 9185, Purchase Card Guide, and consult management for any local restrictions.

If the fee charged by the recording office to file the NFTL(s) exceeds normal limits and the other methods of payment are not available, follow local procedures to request the assistance of the Field Collection Territory Secretary, who has Enforcement purchase authority using a small purchase card,

The territory secretary or the employee filing the NFTL provides the purchase card information to the recording office. Because recording offices generally receive payment for lien document filings through electronic fund transfer, some offices may be hesitant to accept the purchase card information verbally. Explain the purchase card program to the recording office and work with the office, within reason, to address their concerns.

Regardless of the method of payment, within four (4) calendar days of filing the NFTL, input the recording information to ALS or secure email the recording information (including the taxpayer's name and TIN or the SLID) to CLO for input (*SBSE CLO Liens Team 301).

Within five (5) business days, issue the appropriate notice of NFTL filing to the taxpayer (e.g., Letter 3172, Letter 3171).

Request input of the TC 582, TC 360, and TC 971 AC 252, if applicable, following standard input procedures.

NFTLs are printed within five (5) business days of input to ALS.

An NFTL generated by ALS on Sunday, Monday, or Tuesday will print out on Thursday. An NFTL generated by ALS on Wednesday, Thursday, Friday, or Saturday will print out on Tuesday.

NFTLs generally are printed by ALS on Tuesdays and Thursdays ONLY. However, when deemed necessary by CLO management, NFTLs may be printed other days. CLO will ensure that CDP notices are issued timely in these instances. This printing schedule allows ALS to send a data file electronically to the Correspondence Production Services (CPS) so they can timely issue the CDP notices and other copies. The schedule also allows ALS to process timely TC 582 lien indicators and correct TC 360 amounts.

CLO is allotted three (3) business days (including the print day) for administrative processing. Documents are normally sent to recording offices by close of business the next business day.

The taxpayer and representative's NFTL copies are printed with the CDP notice and mailed from the CPS.

CLO procedures are found in IRM 5.19.12.3.5, Printing and Mailing Documents for Recordation.

CLO generally mails NFTLs to the recording offices within two (2) business days of the day the NFTL is printed. So, an NFTL printed on Tuesday will be put in the mail by CLO on Wednesday. An NFTL printed on Thursday will be put in the CLO mail on Friday.

Generally, CLO mails paper documents to the recording offices for filing. There are a few recording offices where the delivery is done electronically, but even with these recording offices, some documents must be sent by paper. Check with CLO if there is a question about how a specific NFTL or other lien document is delivered to a particular recording office.

For an NFTL not needing to be indexed: Because it is difficult to ascertain the date a recording office receives the NFTL in the mail, the Service makes certain assumptions in order to identify the last date by which the taxpayer can request a CDP hearing. The Service presumes the NFTL is "deemed filed" on the third business day after the mailing date.

For an NFTL needing to be indexed: Some states require deeds affecting real property be indexed. In those states, pursuant to IRC § 6323(f)(4), filing is not complete until the NFTL is indexed by the local recording official and recorded in the index at a place of public filing in such a manner that a reasonable inspection of the index will reveal its existence.

The taxpayer and POA copy of the NFTL and any associated letters, such as notification of CDP rights or the Letter 3171, are sent from CPS after ALS provides the information systemically. For more information about CDP notices, see IRM 5.1.9.3.1, Notice of Collection Due Process (CDP) Hearing Rights, or IRM 5.12.6.3, Collection Due Process for NFTL Filing.

CLO procedures related to printing and mailing lien documents and letters are found in IRM 5.19.12.3.5, Printing and Mailing Documents for Recordation.

Employees who need certified copies of filed documents from the recording office are responsible for ensuring the fees charged by the recording office are paid. Payment may be accomplished by:

CLO does not secure certified copies of lien documents from recording offices. If CLO receives an invoice from a recording office for revenue officer copy expenses, the invoice is forwarded to the applicable revenue officer group manager for resolution. CLO does not process this type of payment request with their Billing Support Voucher.

To address further payment requests from recording officials, CLO may annotate the location of the invoice and retain a copy in their files.

The priority of the federal tax lien amongst certain creditors is determined by the filing date and time of the notice. In regard to a lien that attaches real property, priority may be determined by state law requiring that the NFTL be not only filed but also indexed in such manner that a reasonable inspection of the index will reveal the existence of the NFTL filing. Most recording offices provide recording or indexing data which includes the date, book number, page number, and time of the filing or indexing. It is important to accurately and timely enter correct filing data from the recording office. Filing and index data (book number, page, etc.) differ amongst recording offices (i.e., some use the recording number, some use the book and page, some use the serial numbers, some use a combination of the above). The court input data screen is set by the ALS functional coordinator.

For most NFTLs, recording data is input to ALS by CLO as part of the routine filing process. For an NFTL that is not processed through CLO (e.g., a hand-carried NFTL), action is needed to update ALS.

Recording data (aka court recording data (CRD)) should be input as soon as possible, but no later than four (4) calendar days after obtaining or receiving the data.

If entering the data to ALS, review the NFTL to verify that the filing location identified on the NFTL matches the filing location where the NFTL was filed. This is very important since it establishes our lien priority.

If the filing locations don't match, contact the appropriate CLO team for assistance. The team will assist with any corrective action needed. If there is an error, the lien may not properly release through ALS once the tax liability is satisfied. Add an ALS history with an explanation of the error.

Recording data for the NFTL is necessary for ALS to subsequently generate a certificate of release. If needed, recording data can be obtained by taking one or more of the following actions:

A [notice of] lien filed indicator (LFI) appears on Master File when the TC 582 posts.

ALS systemically generates and passes the TC 582 to Master File for all tax modules on an NFTL when that NFTL is processed through ALS. A primary purpose of the LFI is for Master File to notify ALS when a module is satisfied and ALS can generate a release.

ALS transmits the LFI to Master File weekly.

TC 582 is not generated to Non-Master File (NMF) accounts.

ICS users receive a systemic notification if the TC 582 does not post to IDRS within 30 days. Follow up action is required.

For ALL manually prepared NFTLs and estate tax liens: Revenue Officers must request input of TC 582 and TC 360 for recording fees, if applicable.

The taxpayer's account is charged up front for both the recording and release fee.

For an NFTL processed through ALS, the appropriate recording fee is transmitted systemically to Master File. The transmission occurs weekly on Friday and includes fees through close of business Wednesday. Contact CLO if an NFTL has been requested but full payment is also received before this weekly transmission and the NFTL appears on a Billing Support Voucher. This will allow CLO to delete the NFTL and fees.

For a manually processed NFTL, posting the recording fees is the responsibility of the revenue officer. The revenue officer must ensure that the correct fee amount is timely submitted for posting to Master File. The posting request for the fee should be submitted as soon as the NFTL is delivered to the recording office.

For NMF accounts, a listing will generate for TC 360 and a posting request to the Automated NMF (ANMF) must be prepared and forwarded to the servicing campus using Form 3244, Payment Posting Voucher.

Fee amounts can change over time. Contact CLO for assistance with determining the filing and release fee portions.

Reverse the TC 360 when an NFTL is filed in error (see IRM 5.12.3.9, Erroneously Filed Notice of Federal Tax Lien).

A taxpayer may have an immediate need to file documents. If the document is a release and the taxpayer is hand-carrying the release to the recording office, see IRM 5.12.3.7, Disposition of Certificate of Release, for instructions related to the release fee.

A designated payment is a voluntary payment designated by the taxpayer to be applied in a particular manner, i.e., kind of tax, specific tax period, etc.

In the absence of a designation by the taxpayer, payments will be applied in a manner consistent with the provisions of Revenue Procedure 2002-26, unless a specific statute, regulation or procedure designates otherwise.

A DPC is mandatory on all Collection initiated posting vouchers for transaction codes 640, 670, 680, 690, 693 and 700. DPCs serve three purposes.

Use the following DPC for lien related payments:

All payments must be posted to the taxpayer's account within 48 hours of receipt. Lien Units will forward payments for posting by close of business the day of receipt. When a check is received in response to a payoff letter:

ALS generates the Potential Lost Lien (PLL) Listing every 30 days. The listing shows the NFTLs that have been sent to recording offices but no filing information has been entered into the court screen on ALS.

Recording offices can take days, weeks, or at times, months to record the NFTL filed with them and return that information to the IRS.

An NFTL hand-carried to the recording office by revenue officers will show as a lost NFTL if the recording information is not input to ALS. To avoid this situation, revenue officers must enter the recording office information to ALS or provide it to CLO to enter into the ALS court screens.

Without the recording office information, subsequent lien certificate filing cannot occur as this information is used by the recording office to associate subsequent lien certificates with the original NFTL.

Revenue officers may at times be asked to assist CLO to locate missing recording office information.

A replacement NFTL may be required if the recording office information cannot be found. CLO replaces NFTLs and sends notifications to other functions for all lost NFTLs unless there is six months or less time before the CSED.

CLO issues a replacement NFTL on accounts in the following statuses:

When a replacement NFTL is generated on ALS, the CDP notice, if appropriate, is not systemically suppressed.

For an NFTL that originated in ACS or if the account is currently in status 22, the replacement NFTL is issued using an ACS assignment number.

For an NFTL on an account currently in status 60, 64, and 53 that originated in Field Collection and an account currently in status 26, the replacement NFTL is issued using the originating revenue officer's name.