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Lien Processing |
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| If the address is | Then enter the appropriate information in the NOTADD option of ALS and |
| the last known address | note the history with 'Verified IDRS address.' on ALS. |
| not the last known address | issue a new notice. |
- Enter the appropriate information in the NOTADD option of ALS.
- Verify the IDRS address.
- Issue a new notice if a new address is found on IDRS.
- If a new address is not found, note the ALS history with " Verified IDRS address" and destroy the notice.
5.12.6.3.4 (10-01-2003)
Creating Notices for the Power of Attorney
(POA)/Taxpayer Representative and Co-obligors
- ALS can be used to create CDP notices for the taxpayer's representative, POA and Co-obligors.
- Employees responsible for making lien filing determinations are responsible for ensuring that the appropriate persons receive a copy of the CDP notice and all attachments.
- Employees, other than those in ACS, must fax the name and address to the Lien Processing Unit. Use the faxed information to prepare the CDP notice for co-obligors, i.e., ex-spouse, spouse living at a different address, and partners in a partnership, power of attorney and taxpayer's representatives.
- Upon receipt, the information will be added to ALS. Notices received in the Lien Processing prior to the taxpayer's CDP notice being mailed, will be mailed the same day.
- ACS POA information is manually added to ALS from information downloaded from ACS Support. If this method is not used, the information must be faxed.
- In no instance will the notice be mailed later than 5 days after receipt of the POA/taxpayer's representative's or co-obligor's information.
- Note the date the notice was mailed in the ALS history. ALS systemically documents when the information is entered.
5.12.6.3.5 (10-01-2003)
Other CDP Notices
- There are three other
notices issued that relate to collection due process.
These notices explain why there is no entitlement to CDP
appeal rights.
- L3171, Notice of Additional Federal Tax Lien Filing - issued when a lien has been filed in another location and the taxpayer has already received appeal rights. ALS systemically generates this notice.
- L3177, Notice of Federal Tax Lien Filing - Nominees or Alter-Ego - issued in nominee and alter-ego situations. Employees filing the NFTL must ensure that the taxpayer receives a L3172. ALS does not generate either notice.
- L3527, Notice of Federal Tax Lien Filing - Child Support Obligation - issued when a lien is filed on a taxpayer with outstanding child support obligations. ALS does not generate this notice.
- The employee requesting the NFTL is responsible for ensuring that the appropriate notice is prepared and mailed.
- There is no requirement to send these letters certified mail.
- There is no 5 business day mail requirement. However, if the notice is prepared in the Lien Processing Unit, it will be printed and mailed the same day.
5.12.6.3.6 (10-01-2003)
Maintaining Postal Form 3877
- The CDP notice must be sent either certified or registered mail. Lien CDP notices are sent certified mail.
- ALS creates Postal Form 3877 when the L3172 is printed. The form lists the SLID, taxpayer name and address, certified mail cost, and certified mail number for each notice being mailed.
- Legible receipted (stamped by the U.S. Post Office) copies of Form 3877 are maintained in the ALS Unit.
- Retain forms in date order by year. Registers and receipts for outgoing certified mail may be destroyed at the 10 years after the end of the processing year. DO NOT ARCHIVE FILES.
- In cases where the post office certified mail label is used, retain the stamped receipted copy. File it in the same manner as Form 3877.
5.12.6.4
(10-01-2003)
Processing Certificates
- ALS generates certificates
related to the NFTL.
- Form 668Z, Certificate of Release
- Form 12474, Certificate of Revocation
- Form 12474A, Certificate of Revocation of Self-Releasing NFTL
- Form 10916(c), Certificate of Withdrawal
5.12.6.4.1 (10-01-2003)
Certificate of Release
- IRC 6325 requires that a certificate of release (Form 668-Z) be issued within 30 days of the tax liability being satisfied.
- Generally, the
certificate of release is systemically generated from
data pasted to the ALS from masterfile. In some cases,
the release can be requested manually. Examples of these
are:
- taxpayer paying with certified funds
- pending property transactions (the certificate is provided upon receipt of payment)
- liability discharged in bankruptcy
- OIC offered amount paid
- Requests for releases may be received by fax if contact has been made with the taxpayer by phone or in-person and the ALS history is documented with the date of contact and it is noted that the taxpayer wishes to send a request for release by fax.
- Provide taxpayer's with a certificate of release in cases where the liability is satisfied or the taxpayer is paying with certified funds. Do not send the taxpayer to the recording office to see if a copy is on file or to obtain a copy. See IRM 5.12.2 for detailed guidance.
- Releases should be printed and mailed daily. Normally very little time remains on the 30-day period when releases are systemically generated.
- The Lien Processing Unit will retain a dated copy of the billing voucher that lists any releases. The billing voucher will be date stamped by either the IRS mailroom or the post office when these documents leave your immediate control.
- Retain the vouchers in date order by year for 2 years.
5.12.6.4.1.1 (10-01-2003)
Partial Release
- There is no provision in the Code or Regulations for the issuance of a partial release. However, circumstances sometimes dictate that a partial release of the NFTL is necessary. Some partial releases will be systemically generated.
- When you receive a request for a partial release, the requester must provide you with the appropriate entity, TIN (make sure this is the TIN of the person no longer liable for the tax liability), tax type, tax period, unpaid balance of assessment, filing location, etc., to complete the certificate of release.
- Obtain the reason the partial release is being requested. For example, there is a joint account and only one of the taxpayer's requested an offer in compromise and the offer was accepted. The agreed amount has been paid and the tax examiner is requesting release of the NFTL.
- A partial release may be generated when there are multiple tax periods and the taxpayer requests a release for a specific tax period.
- The partial lien release should be prepared using ALS. The ALS allows the user to select a paragraph, clearly identifying the non-liable taxpayer, to be printed on the face of Form 668(Z).
- Do not post TC 583 to the still liable taxpayer's masterfile account.
5.12.6.4.2 (10-01-2003)
Certificate of Revocation
- The certificate of
revocation is issued when a lien has been released in
error. There are two versions of the certificate of
revocation.
- Form 12474 - issued to revoke a release that was requested in error.
- Form 12474A - issued when a NFTL was not refiled timely and the collection statute expiration date expired.
- Revocations are usually requested by Revenue Officers or Technical Services Advisor/Reviewers. In some instances, you may receive these requests from Bankruptcy Specialists.
- Generate the certificate of revocation when it appears in the manager's queue.
- Instruct the recorder to record the revocation prior to recording the NFTL.
- A new NFTL must be filed to reestablish the government's priority.
5.12.6.4.3 (10-01-2003)
Certificate of Withdrawal
- The Form 10916(c),
Certificate of Withdrawal is issued when:
- an administrative error has occurred.
- the taxpayer entered into an installment agreement and the agreement does not provide for the lien filing.
- withdrawal will facilitate collection of the tax liability, and
- withdrawal is in the best interest of the government and the taxpayer.
- See Delegation Order 5.4 to determine who has the authority to approve withdrawal of the NFTL.
- The certificate of withdrawal is normally signed by a Technical Services or Insolvency manager, however, documents generated by ALS may be signed by the Lien Processing Unit, Case Processing Manager.
5.12.6.4.3.1 (10-01-2003)
Partial Withdrawal
- The Internal Revenue Code nor the Internal Revenue Regulations have provisions for the issuance of a partial withdrawal. However, circumstances sometimes dictate that a partial withdrawal is necessary.
- When you receive a request for a partial withdrawal, the requestor must provide you with the appropriate entity, TIN (make sure this is the TIN of the person no longer liable for the tax liability), tax type, tax period, unpaid balance of assessment, filing location, etc., to complete the certificate of certificate of withdrawal.
- The Service will bear the cost of the filing fee.
- Use the information provided by the employee making the withdrawal determination to complete the form.
- Clearly identify on the face of the document which taxpayer (if a joint account) still responsible for the liability.
5.12.6.5
(10-01-2003)
Authority to Sign and Generate ALS Documents
- Lien Processing Unit Managers in Case Processing are authorized to sign, generate and print certificates generated by ALS for employees authorized under Delegation Order 5.4.
- Lien Processing Unit Managers or their designees are authorized to make lien release determinations and to issue certificates of release resulting from lien payoffs initiated by their employees.
5.12.6.6
(10-01-2003)
Recording Fees
- ALS Units are encouraged to arrange with local officials for the periodic billing of recording fees, preferably, on a monthly basis. However, the Service cannot dictate their method of payment.
- Encourage recording offices to submit a cover invoice and to assign an invoice number.
- Within 5 days of receipt of
the voucher:
- Date stamp the voucher when it is received in your office.
- Verify the accuracy of the statement (correct number of documents listed, amount on statement matches our records, etc.)
- Approve for payment.
- Forward the voucher to the Finance Center in Beckley, WV for payment.
5.12.6.6.1 (10-01-2003)
Billing Methods
- Three methods of payment have been established for paying fees.
- Direct Billing - the direct billing estimate must be annotated on the statement (e.g., ALS printout, vendor invoice, etc.). Bulk estimates have been established, no RTS entry is needed.
- Imprest Fund - has been established in several offices to provide for pre-payment when required by local officials.
- Payment Purchase Card - annotate the statement with the bulk estimate document number. Bulk estimates have been established, no RTS entry is needed.
- Annotate the appropriate finance identification number for method of payment. These numbers change each fiscal year and can be obtained from each local SB/SE budget office. Refer to the Management and Finance guidelines on the SB/SE website for local budget information contacts.
5.12.6.7
(10-01-2003)
Disclosure of Lien Information
- Delegation Order 5.4 lists the employees authorized to disclose lien payoff information.
- Any person other than the taxpayer or their designee must submit a written request stating the reason the information is needed and must identify the NFTL in question.
5.12.6.7.1 (10-01-2003)
Disclosure to Escrow and Title Companies
- When Form 8821, Tax Information Authorization, is provided authorized employees may disclose the amount of the outstanding amount secured by the NFTL to escrow companies, title companies, and financial institutions.
- Form 8821 must be completed before the taxpayer signs and must specify the specific piece of property for sale.
- Taxpayers may authorize disclosure telephonically. Verify the taxpayer's identity. See IRM 5.12.2 for additional guidance.
- Do not disclose tax periods not subject to the NFTL without obtaining the taxpayer's authorization.
5.12.6.7.2 (10-01-2003)
Lien Payoffs
- Obtain a copy of the taxpayer's authorization. If authorization is verbal annotate the file.
- If a requester can establish a need to know and the taxpayer is not available to sign the authorization form, seek guidance from Area Counsel.
- If the requestor is not the taxpayer or a party who will be obtaining an interest in the property in question, follow the procedures below but also refer to IRM 5.12.2, for additional guidance.
- Compute the lien payoff amount using established procedures. Based on the expected closing date (if a property sale or proposed contract date) provided in the request, include any statutory additions using COMPA and INTST for periods on the NFTL.
- Do not project amounts beyond the date entered on the payoff request.
- Complete Letter 3640 (Exhibit 5.12.6-1) to provide lien information to the taxpayer or Letter 3641 (Exhibit 5.12.6-2) to provide information to authorized third parties.
5.12.6.7.2.1 (10-01-2003)
Case Files
- Create a case file when you receive a request for a lien payoff.
- Case files must
contain copies of the following information.
- Taxpayer's authorization (either Form 8821 or copy of annotation from case file).
- The NFTL that pertains to the request.
- Computations
- All work papers.
- Forward the case file to the manager for review and signature.
5.12.6.7.2.2 (10-01-2003)
Reviewing the Case File
- Managers or their
designee will review the case file prior to issuing
the payoff letter to:
- Verify that a request was made.
- Verify the accuracy of the computation.
- Ensure that the standardized letter is completed.
- Ensure tax periods on the NFTL and standardized letter are identical.
- Ensure copies of the taxpayer's authorization, payoff request, NFTLs, computations and work papers are in the file.
- Prior to issuing the payoff letter, managers will also ensure that the Service has complied with the taxpayer's authorization or the documentation required under IRC 6103(k)(2).
5.12.6.7.2.3 (10-01-2003)
Retaining Case Files
- Case files will be retained for every lien payoff request received.
- Retain case files for two years.
- Files will be retained in alphabetical order by taxpayer name by year.
5.12.6.8
(10-01-2003)
Designated Payment Code
- A designated payment code (DPC) is mandatory on all collection initiated posting vouchers for transaction codes 640, 670, 680, 690, 693, and 700.
- Use DPC 07 when applying payments secured for the release of a NFTL.
5.12.6.9
(10-01-2003)
Reports
- A number of reports are
created by ALS that directly relate to protecting the
government's interest, protecting taxpayer rights,
maintaining the Service's priority.
- Satisfied Module Reject Report - this report provides the SLID of any lien that did not match a lien found in the ALS database, had restricted interest or penalty, or had a bad check indicator on ALS. This report must be worked weekly to ensure that certificates of release are issued for tax liabilities that have been paid.
- ACS/ICS Reject Report - provides a list of names that rejected because incorrect information was provided. This report should be worked daily to ensure the government's interest is protected.
- Lost Lien Report - provides a list of liens created in ALS with no recording data. This report should be generated and worked (at least quarterly) based on the time it takes recording offices to provide information.
- Potential Refile Report - provides a list of all liens within the refile period. This report should be run and worked quarterly. Working this report timely ensures that the government's priority is maintained.
- NMF 360 Report - provides a list of NMF modules that require manual input of TC 360. This report should be worked weekly.
- GUF - Nullified Distribution Report - provides a list of TC 582 and TC 583 that did not post to master file. This report should be worked within 5 days so that the lien filed indicator can be set on master file.
- Instructions are provided in the ALS User Guide for resolving these reports.
5.12.6.9.1 (10-01-2003)
Satisfied Module (SAT MOD) Reject Report
- The SAT MOD Reject
Report will display one of the following reason codes:
- Restricted Interest - open lien on ALS and restricted interest indicator exists on master file.
- Restricted Penalty - open lien on ALS and restricted failure to pay indicator exists on master file.
- Bad Check on Entity - open lien on ALS with an ALS bad check indicator.
- No Ent/Per-Stat 12 - master file open lien indicator (TC 582) with no match to ALS with MF TIN, MFT and period.
- No Ent/Per-TC 971 - master file open lien indicator (TC 582) with no match to ALS with MF TIN, MFT and period and open TC 971 action codes 100, 101 and 104.
- Follow up actions are required on all items. Items appearing on the report will continue to appear until the reject is resolved.
- Use the ALS Rsat
utility to input resolved rejects. Input one of the
following values so that the item can drop from the
report.
- O = open module is not satisfied and lien cannot be released.
- S= satisfied - module is satisfied.
- N = no action - module is in STAT 12 but the lien cannot be released due to unassessed restricted interest or failure to pay penalty is due.
- Research master file to determine the taxpayer's location.
- Refer to the reports chapter of the ALS User Guide for detailed instructions.
5.12.6.9.2 (10-01-2003)
ACS/ICS Reject Report
- The ACS/ICS contains
four types of information.
- acs_poa - lists lien records from ACS that contains POA data.
- acs_rejects - lists lien records that contain invalid data.
- acs_dups - lists duplicate liens not loaded.
- acs_status - contains log of liens by SLID that successfully loaded and liens that were rejected.
- missing_POD - Lists ROs who are not in the ALS RO table or ROs who are in the RO table and the PODKEY = 1.
- Generate a copy of the L3172 for any POA found in the list. There is no need to redact information.
- Rejects are usually caused because the ROs number is not found in the table; filing local is not found in the appropriate table, or the zip code is unknown. Correct the appropriate field to resolve the error.
- Create a new lien once the correct information is added to ALS.
- For additional guidance refer to the ALS User Guide.
5.12.6.9.3 (10-01-2003)
Lost Lien Report
- This report contains a list of liens where there is no recording information.
- Work this report at least quarterly.
- Technicians should input any lien recordation information already received prior to running the report.
- Locate the recording
information using of the options below:
- telephone call to the courthouse;
- mail-in request;
- ChoicePoint; or,
- revenue officer visit to the courthouse.
- Input the recordation information, if obtained.
- If the lien was not received by the recording official determine if the liability is outstanding and if applicable generate another copy of the lien and forward to the appropriate recording office.
5.12.6.9.4 (10-01-2003)
Potential Refile Report
- The Potential Refile Report produces a list of all liens where the collection expiration date has been extended or suspended. The report displays lien periods that are within the one year period ending 30 days after the collection statute expires. All liens that are within that period should be refiled at the same time.
- Periods that will expire within 90 days are flagged.
- Check the status of the account. If the case is in status 26 send to the field function, status 72 send to Insolvency, status 71 send to OIC, status 22 send to the Area ACS Liaison. All other statuses send to Technical Services for refile determination.
- Contact the assigned employee if the account is in status 26.
- Using ALS, refile the liens as requested.
5.12.6.9.5 (10-01-2003)
NMF 360 Unpostable Report
- This report identifies the reason the TC 360 did not post.
- Input the correct information.
- Forward a request to the appropriate Campus for reinput of the TC 360.
5.12.6.9.6 (10-01-2003)
GUF - Nullified Distribution Report
- This report identifies TC 582 and TC 583 that did not post to the master file.
- Most unpostables are the result of TIN/name control mismatch.
- Check ALS to determine if the information on the unpostable record matches the ALS lien record.
- If the record does not
match the ALS record, correct the appropriate field and
reinput.
Note:
In some cases you will be required to create a "Not to be Filed NFTL" to link the correct information to the incorrect information.
- If the record matches, check IDRS and/or master file to determine what the correct information is. Correct the ALS information accordingly and reinput the lien.
- Close the IDRS control base.
5.12.6.10 (10-01-2003)
Maintaining ALS
- Case Processing is
responsible for:
- administration of the ALS database.
- maintaining a file of recorded NFTLs and other related documents.
- providing access to the database for designated employees based on the employee's manager's approval of Form 5081. Any permission concerns should be discussed with the manager.
- Inputting court recording data.