Category Archives:Lien

The IRS Abused Its Discretion in Requiring that a Federal Tax Lien Should be Filed

Notice of Tax LienIn a recent US Tax Court decision, Budish v. IRS, T.C. Memo. 2014-239, the Court held that a settlement officer erroneously concluded that the Internal Revenue Manual (“IRM”), an IRS employee handbook, required the filing of a notice of federal tax lien as a condition to execute an IRS installment agreement.  This is an important taxpayer victory because of the difficulty involved in avoiding an IRS tax lien.  It further emphasizes the importance of timely filing an appeals hearing when the IRS threatens to levy.

The IRS Collections Unit Threatens a Tax Levy

In Budish, the taxpayer owed $205,000 in back taxes.  In an effort to collect the back taxes owed, the IRS collection unit threatened to levy the taxpayer’s property or right to future property.  The taxpayer filed for a Collection Due Process Hearing (“CDP”) which afforded the taxpayer the right to appeal the tax levy and provide US Tax Court review if the taxpayer and appeals could not negotiate a tax resolution.

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IRS Tax Liens and Foreclosure and Sale

On February 12, 2014, the United States District Court granted the United States’ motion for summary judgment which entitled the US to foreclose upon a taxpayer’s properties for back payroll and income taxes. 

aIn US v. DeSerio, a couple owned two properties in Cornville, Arizona.  The couple owed outstanding federal employment, unemployment, and income tax liabilities covering multiple tax years from the early 1990s through 2007.  In the aggregate the couple owed the IRS over 1 million in back taxes.  The IRS utilized the powers authorized in IRC §6321 and §6322 and filed a notice of federal tax lien in favor of the United States.  The notice of federal tax lien attached to all of the taxpayers property rights including two Arizona properties owned solely by the taxpayer.

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Manny Pacquiao vs. the IRS


While Manny Pacquiao has won the boxing world championship in eight distinct classes, his fight with the Philippine and United States tax men is sure to be his most challenging yet. The Philippine Bureau of Internal Revenue (BIR) has slapped Pacquiao with a $50 million tax bill; at the same time, the IRS claims that Pacquiao owes $18 million in back taxes and placed a lien on his U.S.-based assets.

Filing a Notice of Federal Tax Lien is the IRS’s protocol when a taxpayer owes the IRS more than $10,000.00 (raised from $5,000.00 as part of the IRS Fresh Start Initiative). An IRS tax lien is a claim against a taxpayer’s property for the payment of back taxes including any interest, penalties, and costs thereon. The purpose of filing a lien is to protect the Government’s interest in a taxpayer’s property against the claims of other creditors. Therefore, despite his wealth and boxing prowess, I would not lend Pac-Man any money at this time.

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Charlie Sheen Helps Lindsay Lohan with her Tax Problem

The rich, the poor, the famous and the infamous can all have tax problems, since it seems that no group is immune from this issue.

Lindsay Lohan and Charlie SheenTMZ is reporting that during the production of “Scary Movie 5,” Lindsay Lohan explained her tax woes to Charlie Sheen. As you may recall from our February 17, 2012 blog, the IRS filed a Notice of Federal Tax Lien reporting an IRS tax liability of almost $250,000 that dates back to 2009 and 2010.  Apparently Lohan and Sheen became friends during the filming of the movie, and Sheen sent Lohan a check for $100,000 to help with the tax debt.

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Mean Girls Ain’t Got Nothing on the IRS

Lindsay LohanThe IRS filed a Notice of Federal Tax lien against Lindsay Lohan in an amount of $140,203.40 for a 2010 back income tax liability.  This is nothing new for Lohan as the IRS had filed a Notice of Federal Tax Lien for the 2009 tax year in an amount of $93,000.00.

According to TMZ, Lohan’s personal representative told Page Six that “Lindsay’s personal finances are her business and no one else’s.” Unfortunately, her personal representative is dead wrong:  It’s now everyone’s business.

By filing a Notice of Federal Tax Lien, a taxpayer’s creditors are publicly notified that the IRS has a claim against a taxpayer’s property, including property acquired after the lien is filed. The tax lien is used by courts to establish priority in certain situations, such as bankruptcy proceedings or sales of real estate.

A tax lien can have devastating consequences such as tarnishing a taxpayer’s credit, making it difficult to refinance and borrow against property, impairing title, and in some cases, the loss of a job.

If you have been notified by the IRS that it has or is about to file a tax lien against you, the Law Offices of Todd S. Unger, Esq., LLC may be able to help. Call us today at (877) 544-4743, or fill out a contact form and request a consultation.

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Internal Revenue Service Helps Taxpayers By Raising The Notice of Federal Tax Lien Threshold

A Notice of Federal Tax Lien (NFTL) can tarnish a taxpayer’s credit score and place an encumbrance on their property.  Fortunately, the IRS has provided relief for those owing less than $10,000.00.

In March 28 2011, the IRS issued interim guidance regarding an increase to the threshold for filing Notices of Federal Tax Lien (NFTL).

A federal tax lien attaches to “all property and rights to property, whether real or personal, belonging” to the taxpayer. 26 U.S.C. §6321.  The lien imposed by §6321 arises when an assessment is made and continues until either the taxpayer’s liability is satisfied or the statute of limitations on collection expires.  26 U.S.C. §6322.  The lien attaches to the taxpayer’s property and rights to property as of the moment the assessment, and once filed, attaches to any property acquires thereafter.

The lien created by §6321 is referred to as a “secret” lien since it arises as a matter of law without the necessity of filing public notice.  The “secret” lien is not effective against any purchaser, holder of a security interest, mechanic’s lienor, or judgment lien creditor until an NFTL has been filed.

When the NFTL is filed, the Form 668 (Y)(c) is filed at the county courthouse where the taxpayer resides.  The NTFL notifies the public of the type and year of the tax, the date of assessment, and the amount of unpaid back taxes that a taxpayer owes.   The NFTL will be reported on a taxpayer’s credit report which will adversely impact the taxpayer’s credit score.

The March 28, 2011 guidance is significant because it raises the threshold for a NFTL from $5,000 to $10,000 by amending the internal revenue manual  Consequently, more planning strategies are available to protect the taxpayer from a NFTL.  The increased threshold expires on March 28, 2012.

If you are facing the filing of an IRS tax lien and need help contact tax attorney, Todd S. Unger, Esq.  The tax law firm of Todd S. Unger, Esq., LLC is a boutique tax law firm dedicated to resolving IRS and state tax problems.

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