Releasing a Federal Tax Lien

By Seth Maynard

Have you ever received a Notice of Federal Tax Lien? Did you know that you can ask to have it released because it is not enforceable by law?

First things first: what is a federal tax lien? This is a claim that the government can make against your property when you do not pay taxes that you owe. The government essentially puts itself as top priority against anyone else who may also have a claim to your assets. This is how the government protects its interests. This tax lien comes about after the Internal Revenue Service (I.R.S.) assesses what you owe, sends you a bill to inform you how much you owe, and you then fail to pay what you owe in time. The I.R.S files a Notice of Federal Tax Lien.

It was previously mentioned that this notice and hence, the lien itself, is not enforceable. Why is this so? Internal Revenue Code (I.R.C.) Section 6323(a) requires that the notice should contain: the place for filing the notice, the location of the property being subjected to the lien, the form and content of the notice, the indexing required involving real property, and the national filing system in use. Of these five, the Secretary of the I.R.S. has yet to comply with the third: the form and content of the notice.

Subparagraph (f)(3) of I.R.C. Section 6323 states that the form and content of the notice shall be prescribed by the Secretary. Currently, the Secretary has only prescribed the form of the Notice of Federal Tax Lien. Within Treasury Regulation Section 301.6323(f)-1, nothing can be found where the Secretary prescribed the content of the Notice. The content of the notice cannot be guessed at from its form. In the same way, both the content and the form cannot be inferred. Each prescription must be clearly titled and written for the Secretary to comply with the statute. As the pertinent government representatives have yet to comply, a Notice of Federal Tax Lien is not enforceable as a matter of law.

When you receive such a notice, you may then request that the lien be released as it is a legally unenforceable notice. Such a release is not automatic and taxpayers are required to request a release of lien in writing. Michael Ioane’s “Boston Tea Party” has sample letters and requests to keep you on track to a successful request.

Additionally, in Section 6323, the Secretary has not promulgated any regulation to deal with a Notice of Deficiency. These are dealt with under a separate title of the Code of Federal Regulations. This part of the Code deals with taxes for commercial activity related to alcohol, tobacco or firearms. The I.R.S. has no regulations to handle a Notice of Deficiency when you, as the Aggrieved Party, have no involvement in such commercial enterprises.

All these would require requests, letters and lots of tips to pull off. As mentioned, the third edition of “Boston Tea Party” has all the information you need, accompanied by letters and requests to suit your specific needs.