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Resource Library :: IRS Federal Tax Liens

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Section 6. Procedures for Lien Processing

5.12.6  Procedures for Lien Processing

5.12.6.1  (12-01-2005)
Management and Responsibility

  • Collection Policy has overall responsibility for the lien program and the Automated Lien System (ALS).
    • Requests for "Omni" (universal) access to the ALS database will be forwarded to Collection Policy, Technical and Insolvency, for approval.
    • The request will contain the reason Omni access is required and when access is needed.
    • Collection Policy will respond to requests within five business days.
    • Authorization to add Omni users will be provided to the ALS programmers.
  • Based on policies established by Collection Policy, Centralized Case Processing is responsible for:
    • Processing requests for and maintaining Notices of Federal Tax Lien (NFTL) generated by the Automated Lien System (ALS).
    • Processing requests submitted by Insolvency and Technical Services Advisory for partial withdrawals, partial releases, and estate tax liens (See IRM 5.5.8 for estate tax lien processing procedures).
    • Issuing lien certificates related to NFTLs , such as releases and withdrawals, generated by the system.
    • Facilitating payment of recording fees to the appropriate recording official.
    • Administration of the ALS database, including but not limited to, adding and removing users, resolving exception reports, providing assistance to other functional users.
    • Responding to written and telephone requests for lien payoffs and releases.
    • Mailing all documents timely.
    • Liaison with internal and external stakeholders

5.12.6.1.1  (03-15-2005)
Managing the Lien Process

  • Managing the lien process encompasses many aspects.
  • Reviewing lien documents for completeness, for example, ensuring that name, address and tax period information is present.
  • Ensuring that lien documents are timely processed, including:
    • Form 668(Y)(c), Notice of Federal Tax Lien,
    • Form 668Z, Certificate of Release of Federal Tax Lien,
    • Form 10916(c), Certificate of Withdrawal of Notice of Federal Tax Lien,
    • Form 12474, Revocation of Certificate of Release of Notice of Federal Tax Lien,
    • Form 12474A, Revocation of Certificate of Release of Notice of Federal Tax Lien (Self-Releasing),
    • NMF lien releases,
    • Form 668H, Estate Tax Lien,
    • Form 668J, Estate Tax Lien.
  • Timely inputting court recording data.
  • Responding to requests for information on lien documents.
  • Providing copies of lien documents generated by the ALS system.
  • Ensuring timely resolution of ALS generated reports.
    • MF SATMOD Reject Report
    • NMF SATMOD Reject Entity Report
    • TC 360 Reject Report
    • NMF TC 360 Report
    • Lost Lien Report
    • Potential Refile Report (LPU does not resolve this report, but will provide copies for other functions.)
    • Missing POD Listing
    • ACS/ICS Reject Report
    • Nullified Distribution Report (Unpostables)

Note:

This report is not generated by ALS. LPU employees use EONS or Control D to locate unpostable TC 582s for resolution.

  • Establishing positive lines of communication with internal and external customers. For example,:
    • establishing a liaison between the Automated Call Site (ACS) and the Lien Team to enable effective and efficient resolution of problems.
    • contacting Area Counsel and Area Governmental Liaison staff.
    • practitioners
    • enrolled agents
    • compliance officers, i.e., revenue officers, insolvency technicians, OIC specialists, tax examiners, etc.

.

  • Establishing a lien quality review process for the creation of liens.
    • Is the taxpayer's name (first and last) correct?
    • Is the city, state and zip code correct?
    • Is the recording information, i.e., county and state, correct?
    • Has the tax period information been added?
    • Is there a total balance due at the bottom of Form 668(Y)(c)?
    • If a low dollar lien, was the amount verified on IDRS.

Note:

See the Lien Creation Review Checksheet, Exhibit 5.12.6-1.

  • Establishing quality review procedures for processing lien documents prior to mailing, to determine if the following actions were taken:
    • Were office support vouchers attached?
    • Were documents signed?
    • Were document signatures legible and within the signature space?
    • Were all documents accounted for?
    • Had any documents been removed?
    • Was appropriate documentation attached?
    • Was the billing voucher annotated and documentation attached?
    • Did all releases have recording information listed?
    • Were two copies sent to those recording offices that require it?
    • Were return envelopes attached when required?
    • Were envelopes prepared for the correct county?
    • Were all documents aligned with the correct billing support voucher?
  • Quality review processes should also be established for payoff and telephone assistances. The review process and methodology will be developed Case Processing Management.
  • Assigning work to employees.
  • Certifying payment of recording fees.

Note:

See the Batched Lien/Release Review Checksheet, Exhibit 5.12.6-2.

5.12.6.1.2  (03-15-2005)
Managing Work Processed During Dead Cycles

  • Master file updates its systems during the middle of December through the first week of January, each year. This period is known as the " dead cycles" . During this time, master file does not provide Status 12 extracts or DIAL downloads to ALS.
  • Systemic releases do not occur until the Dead Cycles are complete.
  • Lien releases can be manually input to ALS during this time.
  • Document processing will continue in accordance with established time frames.
  • Certificates of release must be processed within the established 30 day time frame. Therefore, when master file is back on line, immediate processing must occur, including printing and mailing of certificates of release.
  • Transaction codes 582 and 360 for work processed during this time period will be posted when master file resumes processing.

5.12.6.2  (03-15-2005)
Functional Coordinator Responsibilities

  • Collection Policy has determined that some of the responsibilities of the ALS Functional Coordinator include, but are not limited to:
    • Establishing permissions and menu groups for users.
    • Generating and providing reports to the appropriate management official.
    • Updating local files and/or permissions.
    • Serving as a resource person for users experiencing problems, responding to questions, etc.
    • Periodically reviewing all ALS permissions to ensure accuracy.
    • Offering suggestions and solutions in operational and procedural areas.

NOTE: REFER TO THE ALS USER GUIDE FOR SPECIFIC INSTRUCTIONS.

5.12.6.2.1  (12-01-2005)
ALS Permissions

  • While Collection Policy governs most aspects of the ALS system, the ALS Functional Coordinator ensures permissions are accurate and current. NOTE: See IRM 5.12.6.1(1) for employees requesting Omni access.
  • An On-line (OL) 5081 (in rare instances - paper Form 5081) must be approved by the appropriate manager. This is used to request user additions, name changes, or deletions. If a paper Form 5081 is submitted, ensure all required signatures have been obtained prior to forwarding the form to the system administrator and maintain a copy of the paper form.
  • The OL5081 for new users should indicate the types of permissions or capabilities the employee should be granted; i.e., research, create, approval, temporary vs. permanent access, etc. Subsequent changes affecting the user's account, with the exception of a name change or deletion, may be accomplished via e-mail, memorandum, or OL5081 forwarded by the manager or his designee.
  • Updates to user profiles and issuance of passwords must be made within three (3) days after receipt of request.
  • The Coordinator works with the employees manager and/or the Policy Lien Program Analyst, when necessary, to assure proper permissions are given.
  • Employees who have resigned or retired will be removed from the database immediately upon notification.

5.12.6.3  (03-15-2005)
Creating the Notice of Federal Tax Lien Using ALS, Form 668(Y)(c)

  • All Notices of Federal Tax Lien (except estate tax liens) should be filed through the Automated Lien System (ALS).
  • Follow instructions in the ALS User Guide to create the lien when using the ALS system. The following information is required:
    • Entity information: taxpayer identification number, name and address, as well as the name control.
    • Tax assessment information: MFT, tax period, assessment date, taxpayer identification number, last date for refiling, and the unpaid balance of assessment.
    • Recording Office information: place of filing and the recording office address.
    • Administrative information: employee name, assignment number, phone number and location.
  • Requests for filing and refiling NFTLs, should be submitted in writing to the Lien Processing Unit, if the user does not have permission to use the ALS Refile option. See Exhibit 5.12.6-3, Request for Filing or Refiling a Notice of Federal Tax Lien.

Note:

Amended and nominee/alter ego/transferee liens may require special handling. Sufficient information will be input to ALS to ensure the appropriate CDP notice is generated.

5.12.6.3.1  (12-01-2005)
Creating NFTLs From Form 4844 or Referral Form

  • Generally liens are systemically created on ALS from ICS or ACS data. Employees in the walk-in, correspondence, and toll free areas do not have access to ALS.
  • It is expected that lien documents will be created within five days of receipt of the request.
  • Appropriate forms, such as, Form 4844 or the Referral Form (see Exhibit 5.12.6-6) will be forwarded to the lien unit for preparation of NFTLs by these employees. The information outlined in 5.12.6.3(2) will be provided in all requests.
    • Prior to submission, review Form 4844 and/or the referral form to determine if all the information required to prepare the NFTL has been provided.
    • Verify that the name and telephone number of the contact person for generation of the CDP notice, is provided.
    • The lien unit will contact the requestor for additional information, if necessary.
  • The employee requesting the NFTL will provide the appropriate employee identification number and contact telephone number for their particular location. This information is not available in Lien Processing Units.
  • Provide entity information regarding the spouse, POA, partners, etc.
  • All follow up CDP actions, except undeliverable mail processing, will be ACS Support's responsibility.

5.12.6.3.2  (12-01-2005)
Manually Created and Hand Carried NFTLs

  • As a general rule there are two conditions that require manual preparation of the NFTL.
    • Requests by revenue officers who are personally carrying the NFTL to the recorders.
    • Requests by employees without access to the ALS.
  • Manually prepared NFTLs should be kept to a minimum. The information described in IRM 5.12.6.3 should be used to prepare the NFTL.
    • Employees will obtain the serial lien identification (SLID) number from the Lien Processing Team.
    • Lien Processing employees will complete the Form 668(Y) on the system prior to providing the SLID to the requesting employee. Completing the form ensures that the TC 582 and TC 360 are generated for input to master file. This also ensures generation of the Collection Due Process (CDP) notice, when appropriate.
    • If hand carried to the recording office, recording fees will be added to the employees travel voucher for reimbursement.
    • Employees who have hand carried documents to the recording office will provide recording information to the lien unit within 10 days. After 10 days, the lien unit may contact the employee who requested the NFTL filing.

5.12.6.3.3  (03-15-2005)
Recording Information

  • The priority of the federal tax lien over other creditors is determined by the recording date and time. The recording office provides this data. The recording office also supplies the location and the filing number. It is crucial to accurately input correct court data in a timely fashion. Some recording offices use just 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.
  • Court recording data must be input within 5 days of receipt.
  • If the user has appropriate ALS permissions, input the court recording data by taking the following steps:
    • Select "Input Court Recording Data" from the "ALS Lien Application Menu" or type the literal " court" at the prompt.
    • Select a specific lien by using the standard options displayed at the bottom of the screen.
    • Select #7 Record, after accessing the correct lien.

Note:

If researching by TIN or NAME, select #5 and choose the correct SLID for update. Then select #7 Record.

    • Enter all recording information provided by the recording office by following the prompts. The cursor will be at the date field. (a) Date – date notice was filed, mmddyyyy. (b) Time – records time and day recorded, hhmm (after 12:00 PM you must enter the hour using military time, for example, 1:00 PM is 1300, 2:00 PM is 1400, etc.). (c) Book – number of the book where the lien is recorded. (d) Page – page number of the recording book. (e) UCC – Uniform Commercial Code number assigned to the lien. (f) NO – serial number assigned to lien as a recorder’s reference.
    • Press "N" or type "OK" at the prompt, if you need to edit the record. This will allow you to re-input entries.
    • Press "Y" to return to the lien record.
    • Press "E" to return to the lien menu or CTRL "U" to exit.
  • When inputting court data, review the lien to verify that the county on the lien matches the county where the lien was filed. This is very important since it establishes our lien priority.
  • If the counties don't match, contact the functional coordinator for assistance with the correction. The functional coordinator may assist with any other corrective action they deem appropriate. The lien may not be properly released in the correct county if the appropriate information is not found on ALS once the tax liability is satisfied.
  • Request that a ALS history notation be input explaining the error.
  • Lien Processing employees should use Exhibit 5.12.6-4, Recording Information Review, to ensure the accuracy of information input to ALS.

5.12.6.3.4  (03-15-2005)
Correcting the NFTL

  • The ALS database should always contain NFTL records that mirror information filed at the recording offices. Exceptions are documents not created by ALS or changed after generation. If changes were made after generation, sufficient history will be added to ALS explain the change.
  • If an error was made prior to the NFTL being mailed for recordation, contact the appropriate lien team to request a correction to the NFTL.
  • Changes will not be made to any part of the document after it has been mailed for recordation without managerial approval. The NFTL must be amended.
  • Document the ALS history with the reason the change was made.

5.12.6.3.5  (10-01-2003)
Amending the NFTL

  • Recorded NFTLs can be amended to correct erroneous information contained on the filed NFTL.
  • NFTLs will be amended within five days of receipt of request by the appropriate lien team.
  • Request an amended NFTL if:
    • The name is incorrect (does not clearly identify the taxpayer to other creditors, i.e., Y. Corn should be Yale Cornell.
    • The assessment date is incorrect.
    • The tax period is incorrect.
    • The unpaid balance of assessment at the time of filing is significantly different from what is listed on the NFTL for example, the NFTL shows $3,000,000,000 and the actual assessment is $30,000.
  • ALS will generate a new CDP notice for amendments to the name, tax period or assessment date.
  • The appropriate lien team should issue IDRS Correspondex Letter 3645CS (explains the amendment to the NFTL and notifies the taxpayer of the issuance of the CDP notice explaining their appeal rights) to the taxpayer.
  • If for any reason the correspondex letter cannot be issued, the CDP notice will be suppressed, and appropriate actions taken by the lien team. See IRM 5.12.6.4.2.1 for these procedures.

5.12.6.3.6  (03-15-2005)
Mutual Collection Assistance Requests (MCAR)

  • Certain tax treaties have clauses where our treaty partners can request assistance from the Service to collect taxes owed them by individuals residing in the United States. The mutual collection treaty partners are France, Sweden, Denmark, Canada and the Netherlands.
  • All MCARs from treaty partners are received by the Director, International (LMSB).
  • The Office of the Director, International (LMSB) forwards the MCARs to the Chief, International Operations (SB/SE) (International).
  • For general procedures in processing MCARs, see IRM 5.1.8.

5.12.6.3.6.1  (03-15-2005)
Preparing Form 668(Y)(c) from MCARs

  • When the filing of a lien is required, International will make a request by means of a courtesy investigation to the revenue officer group responsible for the zip code where the taxpayer resides.

Note:

Do not use ALS to prepare MCAR liens.

Note:

CDP notices should not be generated for MCAR liens.

    • Use the format shown in Exhibit 5.12.3-5 as a guide to prepare Form 668(Y)(c), Notice of Federal Tax Lien.
    • Use only the serial number provided by International.
    • Use the Taxpayer Control Number (TCN) assigned to the MCAR assessment by International as the identifying number if the taxpayer identification number is not known.
    • Use the Last day for Refiling collection statute date provided by the treaty partner as provided to you by International.
  • The NFTL will be filed in the appropriate recording office.
  • A reasonable time after filing of the notice of the MCAR lien, the revenue officer group responsible for the zip code where the taxpayer resides will send a letter notifying the taxpayer of the lien filing, along with Publication 1660, Collection Appeal Rights, and referencing the Article in the tax convention authorizing the MCAR claim. Collection Due Process rights are not available for MCARs. However, if the revenue officer and the taxpayer disagree on the application of the MCAR provisions in the relevant tax convention or the terms of an installment agreement, a Collection Appeals Program hearing may be requested by the taxpayer (see IRM 8.7.2.2).
  • When LPU receives the recorded copy of the NFTL, it will be forwarded to the requesting revenue officer.
  • The revenue officer will return a copy of the NFTL to International. Once the lien is recorded, provide the appropriate recording information.
  • Do not request input of TC 582.
  • Do not request input of TC 360, filing fees are not assessed against MCAR taxpayers.

5.12.6.3.6.2  (03-15-2005)
Refiling and Release of MCARs

  • International will be responsible for determining whether to refile or release the NFTL.
  • NFTLs for refiling and certificates of release will be:
    • prepared by International and
    • forwarded to the appropriate revenue officer group responsible for the zip code where the taxpayer resides,
    • the revenue officer group will forward the request to the Lien Processing Team to complete the recording process, if appropriate.
  • Do not input TC 582 for the refile or TC 583 if the NFTL is released.
  • Do not input TC 360 for filing fees.

5.12.6.3.7  (12-01-2005)
Printing the NFTL

  • Employees requesting NFTLs can expect their will be printed within 5 calendar days of input to ALS.
  • Liens are printed on Tuesdays and Thursday ONLY.
  • Documents are normally sent to the recording offices by close of business the next business day, for recording offices that do not require payment at time of filing. For recorders requiring payment at time of filing refer to 5.12.6.7.2(b).
  • Part 3, the taxpayer's copy, is generated and printed with the CDP notice.

5.12.6.3.8  (12-01-2005)
Mailing the NFTL

  • Arrangements have been made with most local officials for acceptance of (for filing) NFTL by mail.
  • The lien processing unit is responsible for preparing a transmittal, Form 3915, Processing Notices and Releases of Federal Tax Lien and Other Related Certificates, accompany Parts 1 and 2, if necessary.
  • Part 2 of the NFTL should always be mailed to the recording office and should be returned with court recording data.
  • The Service will bear the cost of obtaining the court recording data by including a self-addressed postage paid envelope, E-25C, for the return of Part 2, when required.
  • If the NFTL is not accepted by mail or circumstances dictate immediate action, the NFTL will be delivered personally to the proper recording official.

5.12.6.3.9  (03-15-2005)
Refiling the NFTL

  • Refiling the NFTL maintains the Service's priority established by the original lien filing when the collection statute is extended.
  • Requests for refiles will be input through ALS.
  • Employees who do not have ALS permissions to refile liens will request the NFTL be refiled by submitting a requesting to the appropriate lien team.
  • Include all information that must be updated, i.e., dollar amount, address, CSED.
  • If employees have ALS refile permissions, refer to the ALS User Guide for information on how to create these documents.
  • All refiled documents will be printed and mailed by the appropriate lien team.

5.12.6.3.10  (03-15-2005)
Out-of-Area Lien Filing

  • A NFTL filing request received for a recording office outside your lien team area is described as an out-of-area lien.
  • These liens can be input by your team, but will be printed by the lien team that is assigned the area where the recording office is located.
  • Upon receipt, but not later than 5 business days after receipt, the NFTL will be input to ALS, printed and mailed.
  • Employees will enter the zip code (in Create) where the property is located. ALS will display the corresponding filing jurisdiction.
  • The appropriate CDP notice will be generated and printed at the centralized print site.

5.12.6.3.11  (03-15-2005)
Not To Be Filed Liens

  • Not to be filed liens (NTBFL) are created when the TIN and/or MFT were incorrect on a recorded lien and are input only by the lien unit. The information sharing between IDRS and ALS relies on the correct TIN, MFT and name control. In order for IDRS to pass information such as updated CSED or full payment to ALS, a lien must be created with the matching information from the original lien but with the corrected TIN and/or MFT.
  • Requests should be submitted using a referral form.
  • The ALS name control can be corrected without creating a NTBFL.
  • The lien team will document the history screen listing the original lien's SLID number and the NTBFL SLID number.
  • NTBFLs will not be mailed to recording offices. These liens are for internal use only.
  • When the lien modules are satisfied on IDRS the notification will come down to ALS updating the NTBFL. Once all the modules are satisfied the NTBFL will generate a release to the print queue.
  • When the release is printed the lien clerk will be alerted to the NTBFL status of the release and will take steps to immediately release the corresponding original lien.
  • If a NTBFL is sent to the recording office in error, the lien team will immediately contact the recording official via telephone to retrieve the lien.

If a not to be filed lien

and there is

then

is recorded

a balance due.

contact Technical Services to request and receive approval of a withdrawal.

is recorded.

no balance due (full paid).

contact Technical Services for approval of a certificate of release.

is not recorded

 

prepare a memo to the recording official requesting the not to be filed lien be returned without being recorded. If the recording office does not return the NFTL, CCP will add a ALS history item including the date, name of contact and resolution.

  • Request Technical Services Advisory approval by sending a secure email to the advisory group manager based on the location of the taxpayer. Use SERP to identify the group location. Provide the taxpayers identifying information, the reason for requesting withdrawal or release, and reference this manual section for guidance.
  • The Technical Services Advisory Group Manager will respond within five business days with approval or denial of the request.

5.12.6.3.12  (12-01-2005)
Stopping/Pulling the NFTL

  • When a NFTL has been requested in error, the requesting employee may request that the NFTL be stopped and pulled from documents being mailed to the recording office .
  • Employees who request lien filings will contact the lien team to have the lien pulled after a request for lien filing has been made.
  • Requests must be received and LPU actions completed by 9:00 PM on the day after the lien is printed (Wednesday or Friday). Timely requests eliminate the generation of the CDP notice.
  • Document the reason the lien is being pulled and keep the documentation with the billing support voucher.
  • Correct the billing support voucher to reflect the correct recording fee.
  • Provide the documentation to the lien unit manager for approval.
  • Suppress the CDP notice, if necessary. See IRM 5.12.5.4.2.1 for procedures.

5.12.6.4  (10-01-2003)
Collection Due Process (RRA) Notices

  • IRC 6320 requires that the Service provide taxpayers with lien collection due process appeal rights within 5 business days of the NFTL being filed.
  • The CDP notice (L3172, Notice of Federal Tax Lien Filing and Your Rights to a Hearing), is created in the ALS database when the NFTL is printed.

5.12.6.4.1  (10-01-2003)
Mailing the CDP Notice

  1. Within 5 business days of printing the NFTL, the CDP notice must be mailed.
  2. The day after the lien is printed, the CDP notice is generated and forwarded to the National Print Site for printing and mailing.
  3. All enclosures (Publications 1, 1450, 1660, Form 668Y(c), Form 12153) must be included.

5.12.6.4.2  (03-15-2005)
Amended NFTL Generates New L3172

  1. IRC 6320 requires that taxpayers be provided with one appeal opportunity per tax period, per assessment.
  2. A new CDP notice (L3172) is required when the taxpayer's name, assessment date or tax period is corrected. This notice will have a new 30 day response due date.
  3. A decision whether to suppress the CDP notice must be made when the lien is amended. Refer to IRM 5.12.6.3.4
  4. The notice must be mailed within five business days.
  5. The notice must be sent by certified mail.

5.12.6.4.2.1  (03-15-2005)
Suppressing CDP Notices for Amended Liens

  1. Amended lien requests are forwarded to the lien processing unit for input to ALS using the referral form.
  2. Upon receipt of the request, the amended lien information will be input into ALS, using the Create option. A lien is amended to correct information, such as, the taxpayers' name, the tax period, MFT, etc. The system will ask if the notice should be suppressed and prompt you for a response.
  3. The employee requesting the amended lien must determine prior to making the request, whether the CDP notice should be suppressed.
  4. Include in the referral form the reason for suppressing the notice. The reason will be systemically saved as a history item.
  5. The history on both the original lien and the amended lien will be documented. Include the following information in the history:
    1. requestor's name
    2. reason for amendment
    3. SLID number of the amended lien
  6. The amended NFTL should be printed during the normal printing process (Tuesday and Thursday ONLY).
  7. The amending language will be typed on the body of the NFTL and a copy provided to the taxpayer.
  8. The lien team will submit the amended lien for recording using normal processing procedures.
  9. A manually prepared CDP notice will be issued, if necessary.
  10. The CDP notice (if not suppressed) and the taxpayer's copy of the amended lien will be sent certified mail, using Postal Form 3800, Certified Mail Label.
  11. The lien processing team will retain and file the certified mail receipt (PS Form 3800) in the same manner as PS Form 3877.

5.12.6.4.3  (12-01-2005)
Undelivered CDP Notices

  1. All undelivered mail will be returned to the centralized lien processing unit for address verification. It is expected that all returned mail will be worked within 5 days of receipt.
  2. The lien team will check IDRS to make sure the address is correct.

If the address

Then

is correct or is the last known address

no action is required

if the address is not the last known address and was effective prior to the issuance of the original CDP notice

issue a new notice to the new address.

Note:

  1. If a different address is found on IDRS but was effective after the issuance of the CDP notice, do not issue a new notice.
  2. In cases where a new address is found, the lien processing unit will use the ALS NOTADD option to document the undelivered mail and to ensure that the new L3172 is created.
  3. CDP notices will not be returned. Normal processing procedures should include:
    1. Researching IDRS to verify the notice address.
    2. Issuing a new notice if a new address is found on IDRS AND the current address was on IDRS prior to the lien being filed.
    3. Destroying the CDP notice.
  4. If the reissued CDP notice is returned, there is no need for additional research because the reissued notice was mailed to the last known address at the time the NFTLbased on prior research.
  5. Notices returned by the Centralized Print Site (CPS) due to incorrect address issues will be resolved by the lien processing unit within 5 business days.
  6. If the address is incomplete, the correct address will be input and reissued with a new 30 day response due date. ALS will systemically generate new response due date for notices corrected through the system.
  7. If the address is complete, and the employee requesting the lien has no other address, the notice must be issued. A new response due date is required.
  8. If the address is complete, and the employee requesting the NFTL has a recent address change, a substitute notice will be reissued.

5.12.6.4.4  (03-15-2005)
Creating Notices for the Power of Attorney (POA)/Taxpayer Representative and Co-obligors

  1. Employees with the appropriate ALS permissions, can use ALS to create CDP notices for the taxpayer's representative, POA and co-obligors. Employees without ALS permissions must submit a request to the lien processing unit.

Note:

CDP notices issued to co-obligors (ex-spouses, spouses living at a different address) and business partners must be issued within five business days and sent certified mail.

Note:

Create cover letter, L3262, POA Lien Notification Letter, for letters being provided to the taxpayer's representative.

  1. Requests forwarded to the lien processing unit for the issuance of CDP notices to the POA must be requested by fax and include the name and address of the representative as well as the taxpayers name, TIN, and tax period.
  2. Employees responsible for making lien filing determinations are responsible for ensuring that the appropriate persons receive a copy of the CDP notice and all enclosures (Publications 1, 1450, 1660, Form 668(Y)(c), Form 12153).
  3. Employees, other than those in ACS, must fax the name and address to the Lien Processing Team. LPU will use the faxed information to prepare the CDP notice for co-obligors. Examples of co-obligors are: ex-spouse, spouse living at a different address, and partners in a partnership, power of attorney and taxpayers' representatives.
  4. Upon receipt, the information will be added to ALS. Information received by the Lien Processing Team prior to the taxpayers' CDP notice being generated, will be mailed the same day as the taxpayer's notice.
  5. 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. Notices created for co-obligors will be printed and mailed the next business day.
  6. In no instance will the notice be mailed later than 5 days after receipt of the POA/taxpayer's representative's information.

5.12.6.4.5  (03-15-2005)
Other CDP Notices

  1. There are four other notices issued that relate to collection due process. These notices explain whether there is entitlement to CDP appeal rights.
    1. 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. (LPU prints and mails this notice.)
    2. L3177, Notice of Federal Tax Lien Filing - Nominees or Alter-Ego - issued in nominee and alter-ego situations. ALS does not systemically generate this notice.
    3. L3886, Notice to Taxpayer of Nominee/Alter Ego Federal Tax Lien Filing - issued to taxpayers who are identified as having property in the name of a nominee or alter-ego. ALS does not systemically generate this notice.
    4. 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 systemically generate this notice.
  2. The employee requesting the NFTL is responsible for ensuring that the appropriate notice is prepared and mailed.
  3. There is no requirement to send these letters certified mail.
  4. There is no 5 business day mail requirement EXCEPT L3886 .
  5. Notices prepared in the Lien Processing Unit will be printed and mailed the next business day.

5.12.6.4.6  (10-01-2003)
Maintaining Postal Form 3877

  1. Lien CDP notices will be sent certified mail unless the taxpayer has a foreign address. If the taxpayer has a foreign address, send the notice registered mail.
  2. ALS creates Postal Service (PS) 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.
  3. Legible receipted (stamped by the U.S. Post Office) copies of Postal Service Form 3877 are maintained by the Lien Team.
  4. In cases where the post office (PS Form 3800) certified mail label is used, the lien unit will retain the stamped receipted copy. File it in the same manner as PS Form 3877.
  5. Forms are retained in date order by year. Registers and receipts for outgoing certified mail may be destroyed 10 years after the end of the processing year.

5.12.6.5  (12-01-2005)
Processing Lien Related Certificates

  1. The ALS approval queue is the mechanism used by the Lien Processing Unit to generate documents where employees, with the delegated authority, have determined that the issuance of a lien related certificate is appropriate.
  2. Functional managers may authorize certificate input by lower graded employees who have ALS experience or training. These managers are responsible for the accuracy of the information input. Functional managers should have sufficient internal controls to approve the input of the certificate prior to the actual input. An ICS or AIS history entry by the manager meets this requirement.
  3. ALS generates the following certificates related to the NFTL.
    1. Form 668Z, Certificate of Release of Notice of Federal Tax Lien,
    2. Form 12474, Certificate of Revocation of Notice of Federal Tax Lien,
    3. Form 12474A, Certificate of Revocation of Notice of Federal Tax Lien (Self-Releasing)
    4. Form 10916(c), Certificate of Withdrawal of Filed Notice of Federal Tax Lien.
  4. Certificate issuance has been approved prior to ALS input. Therefore, documents will be generated and mailed without contacting the functional managers.
  5. Functions requesting the preparation of the above referenced certificates by LPU must complete a referral form. See Exhibit 5.12.6-6, Referral Form.
  6. Lien certificate recording data will be added to the ALS history, within 5 days of receipt, but not later than 10 days of receipt.
  7. These procedures also apply to the issuance of partial release and withdrawal certificates. Functions are responsible for the preparation of any partial withdrawal or release certificates and referral to LPU as an attachment to the referral form.

5.12.6.5.1  (12-01-2005)
Certificate of Release

  1. IRC 6325 requires that a certificate of release (Form 668-Z) be issued within 30 days of a determination by the Service when the tax liability is satisfied.
  2. Generally, the certificate of release is systemically generated from data downloaded to the ALS from master file. In some cases, the release can be requested manually. Examples of appropriate times to manually release liens are:
    1. taxpayer paying with certified funds;
    2. pending property transactions (the certificate is provided upon receipt of payment);
    3. liability discharged in bankruptcy;

Note:

It is not appropriate to release a NFTL on a discharged liability if the pre-petition NFTL attached to exempt, abandoned, or excluded property against which the Service might enforce its in remproperty interest. Also, a NFTL for discharged tax should not be released until after the Service receives its distribution in the bankruptcy case.

    1. OIC offered amount is full paid.
  1. In the above referenced examples, issue an immediate release, if requested. Such requests may be faxed or secure emailed to the lien processing unit. Highlight "immediate release" at the top of the request.
  2. When full payment is made by personal check, the statutory 30 day requirement to release the NFTL does not begin until the funds are received. The Secretary has determined that 15 business days may lapse after receipt before the 30 day release requirement begins.
  3. If a credit line check is received, the 30 day release period will begin 15 business days after receipt. However, if the credit line check is converted into certified funds, issue an immediate release.
  4. Provide taxpayers with a certificate of release in cases where the liability is satisfied or the taxpayer is paying with certified funds.
  5. Issue a certificate of release if the collection statute has expired, and the taxpayer requests a release.
  6. Releases should be printed and mailed daily. Minimally, releases will be printed and mailed twice weekly.

Note:

Normally very few days remain on the 30-day period when releases are systemically generated. Prompt processing by the lien unit is required.

5.12.6.5.1.1  (12-01-2005)
Department of Justice or Court Ordered Requests for Issuance of Certificates of Release

  1. Occasionally, it is necessary for the IRS to issue certificates of release based on court decisions or at the request of the Department of Justice.
  2. These requests will be acknowledged and the release will be prepared and issued immediately upon receipt.
  3. The requesting employee will provide all pertinent information for preparation of the release, including the taxpayer's current address.
  4. Follow instructions provided by the requesting employee for recording the release. It may be necessary for the employee to hand carry the document to the recording office. The employee will pay the recording fee and be reimbursed through the travel voucher system.
  5. A history must be added to ALS by the lien processing unit that the certificate of release was hand carried, include the date the certificate was provided to the employee, and the requesting employee's name.
  6. When the release is hand carried to the recording official, the requesting employee will forward a copy of the certificate of release with the recording data to the Lien Processing Unit for input.

5.12.6.5.1.2  (12-01-2005)
Issuing a Certificate of Release When Receiving Electronic and Credit Card Payments

  1. DO NOT issue an immediate release when credit or debit cards are used to full pay the tax liability. Credit and debit cards are barred for satisfaction of liabilities because of the possibility of chargeback of such payments over a period of months. Certificates of release will be issued systemically when the account is fully satisfied (Status12).
  2. Issue an immediate certificate of release when full payment of the liability is made by electronic funds transfer (EFT). These payments become irrevocable in a short period of time.

5.12.6.5.1.3  (03-15-2005)
Partial Release

  1. Circumstances sometimes dictate that a partial release of the NFTL is necessary. Some partial releases will be systemically generated.
  2. Forward requests for partial releases to the lien processing unit if ALS permissions have not been provided. Request input within five days of LPU receipt of the request.
  3. The requesting employee must provide 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.
  4. Provide the reason the partial release is being requested. For example, there is a joint account and only one of the taxpayers 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.
  5. A partial release may be generated when there are multiple tax periods and the taxpayer requests a release for a specific tax period.
  6. A partial lien release should be prepared using ALS. The ALS Release Module allows the user to select a paragraph identifying the non-liable taxpayer to be printed on the face of Form 668(Z).

5.12.6.5.1.4  (12-01-2005)
Taxpayer Request for Release

  1. Normally, requests for a certificate of release must be in writing and signed by the taxpayers.
  2. Requests received by fax may be accepted if contact has been made by phone, or in person and the taxpayer history file is documented with the date of contact and a notation is made that the taxpayer wishes to send the request by fax.
  3. Complete requests within 5 days of receipt, except when taxpayers are waiting on the certificate. In those cases, prepare the certificate of release immediately upon receipt of certified funds.
  4. Occasionally, taxpayers request a certificate of release (Form 668Z) when the NFTL has self-released. Check IDRS for the account status.

If the account

and

then,

is full paid

there is a credit balance or the balance is zero

issue a certificate of release.

Note:

Notify your manager of credit balances that exist and the taxpayer has no other liability.

is not full paid

there is a balance

inform the taxpayer that there is a balance due on the account and that a certificate of release will not be issued (normally the NFTL has been refiled and the statute for collection has been extended).

 

 

 

Note:

  1. Refer the request to the appropriate function based on the status of the account. Accounts that are not in status 22, 26, 71, or 72 will be resolved by referring the taxpayer to the nearest Taxpayer Advocate Office or referring them to the toll free number for assistance.
  2. Provide taxpayer's with a copy of the certificate of release at their request when the tax period is full paid. This procedure also applies to requests received by the lien processing unit.
  3. Inform the taxpayer that the IRS does not retain recorded copies of the certificate of release. Recorded copies can only be obtained from the recording official.
  4. When the taxpayer makes us aware that a copy of the lien cannot be found in the recording office, request that the taxpayer contact the credit reporting service to obtain information regarding the lien filing.
  5. Upon receipt, enter the lien information into the database (creating a "not to be filed lien" , if necessary) using SCreate, then generate the release.
  6. Provide the taxpayer with a copy of the certificate of release and a copy of Notice 48, Release of Federal Tax Lien.
  7. Document the ALS history.

5.12.6.5.1.5  (12-01-2005)
Lien Release Tracking System

  1. As a means of verifying the date certificates of release leave the IRS, a copy of the billing support voucher that lists any release will be date stamped by the IRS mail room or U. S. Post Office and retained.
  2. Retention of these documents will be the responsibility of the Centralized Lien Processing Unit.
  3. Billing support vouchers will be retained in such a manner as to be easily retrievable, i.e., in date order by year.
  4. The retention period is six (6) years, three (3) months.
  5. Billing support vouchers retained to support the recording office invoices meet the requirement in (4) above, if the voucher is appropriately date stamped.

5.12.6.5.1.6  (03-15-2005)
Unlocatable Certificates of Release

  1. Occasionally the certificate of release cannot be located by the recording office even though ALS shows that the release was issued. Requests are routinely made to the lien processing unit by taxpayers or their representatives.
  2. The original copy of the certificate of release must be reprinted. These documents will be processed the same day notification is received.
  3. Forwarded to the recording office.
  4. Recording fees will not be posted to the taxpayer's account.
  5. If a taxpayer is waiting on the certificate, inform him/her that he/she can take the copy to the recording office, however, a recording fee must be paid.
  6. Provide the taxpayer with a copy of Notice 48, Release of Federal Tax Lien.
  7. Request input of an ALS history.

5.12.6.5.2  (10-01-2003)
Certificate of Revocation

  1. The certificate of revocation is issued when a lien has been released in error. There are two versions of the certificate of revocation.
    1. Form 12474 - issued to revoke a release that was requested in error.
    2. Form 12474A - issued when a NFTL was not refiled timely and the collection statute expiration date has not expired.
  2. Request input of the revocations within five days of receipt of request by LPU.
  3. Revocations are usually requested by Revenue Officers or Technical Services Advisor/Reviewers. In some instances, these requests may be received from Bankruptcy Specialists.
  4. LPU may generate certificates of revocation when they appear in the manager's queue without contacting the functional manager. Functional approval was provided prior to input of the certificate.
  5. If a new filing is being requested, instruction should be provided to the recorder to record the revocation prior to recording the NFTL.
  6. A new NFTL must be filed to reestablish the government's priority. The employee requesting the revocation is also responsible for determining that the revocation has been recorded or issuing a request to the LPU for assistance in determining the status of the revocation, when requesting issuance of a new NFTL.

Note:

Although priority may be lost to competing liens - both those in existence when the NFTL was erroneously released, and those coming into existence between the erroneous release date and the revocation/reinstatement date, it is nevertheless important to utilize the revocation and reinstatement procedures in order to correct the presumptive conclusive extinction of the lien under IRC Section 6323(f)(1)(a), and prevent additional loss of priority when future competing liens arise, especially where significant property interests exist or are reasonably anticipated to come into existence during the life of the extended collection statute.

5.12.6.5.3  (12-01-2005)
Certificate of Withdrawal

  1. The Form 10916(c), Certificate of Withdrawal is issued when:
    1. an administrative error has occurred, i.e., a lien filed on a taxpayer during a bankruptcy proceeding.
    2. the taxpayer entered into an installment agreement and the agreement does not provide for the lien filing.
    3. withdrawal will facilitate collection of the tax liability, and
    4. withdrawal is in the best interest of the government and the taxpayer.
  2. See Delegation Order 5.4 to determine who has the authority to approve withdrawal of the NFTL.
  3. Employees requesting the issuance of a certificate of withdrawal will expect issuance of the document within five days of receipt of request by LPU.
  4. 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 Team Manager.
  5. Taxpayers and field personnel will request the withdrawal through Technical Services or Insolvency.
  6. Technical Services and Insolvency managers may authorize certificate input by lower graded employees who have ALS experience or training. These managers are responsible for the accuracy of the information input. Functional managers should have sufficient internal controls to approve the input of the certificate prior to the actual input. An ICS or AIS history entry by the manager meets this requirement.
  7. The Lien Team will print the withdrawal and send it to the recording office for recordation.
  8. The Lien Team will abate the original TC 360 assessed for the recording fee for withdrawals issued because of administrative error .

5.12.6.5.3.1  (03-15-2005)
Partial Withdrawal

  1. Neither 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.
  2. Functions are responsible for the preparation of any partial withdrawal certificates and referral to LPU as an attachment to the referral document. The document must clearly identify (on the face of the document) which taxpayer remains responsible for the liability.
  3. The Service will bear the cost of the filing fee when withdrawal is due to administrative error. Do not post TC 360 to the taxpayer's account.

5.12.6.6  (03-15-2005)
Authority to Sign and Generate ALS Documents

  1. Lien Processing Team Managers are authorized to generate and print certificates generated by ALS for employees authorized under Delegation Order 5.4.
  2. Lien Processing Team Managers or lead tax examiners are authorized to make lien release determinations and to issue certificates of release resulting from lien payoffs initiated by their employees.

5.12.6.7  (03-15-2005)
Posting Recording Fees to the Taxpayer's Account

    • Recording fees (fees paid for recording lien documents) are systemically posted to the taxpayers' account. Transaction code (TC) 360 is used to identify the lien fee and is normally accompanied by a TC 582 input in the same or next posting cycle.
    • Occasionally, these transaction codes may not post until after the account has been full paid, thus returning the account to a balance due status.
    • Reverse the transaction codes (using TC 361 and TC 583), in these cases, even though the lien request may have been made prior to the account being full paid.

     

    5.12.6.7.1  (12-01-2005)
    Paying Recording Fees and Certifying Payment

    • Managing documents generated by the ALS includes paying and certifying recording fees. The Centralized Lien Processing Unit is encouraged to arrange with local officials for the periodic billing of recording fees, preferably, on a monthly basis. However, the IRS cannot dictate their method of payment.
    • Recording offices should be encouraged to submit a cover billing invoice and assign an invoice number.
    • If the vendor does not provide an invoice, the Campus may create a numbered invoice detailing the amount due, recording office, number of documents paid, and any identifying information provided by the recording office.
    • Finance requests that within 5 days of receipt of the invoice or request for payment the following actions occur:
      • Date stamp the invoice when it is received.
      • Verify the accuracy of the invoice or request for payment, i.e., correct number of documents listed, amount on statement matches our records, etc.).
      • Approve the invoice for payment.
      • Verification of the accuracy of the assembled package.
    • The verified package will be forwarded with the invoice to the Finance Center in Beckley, WV for payment.
    • Copies of both the vendor invoice and the associated billing support voucher will be retained for six (6) years, three (3) months.

    Note:

    This voucher may be used to meet IRM 5.12.6.5.1.5(4) requirements, if appropriately date stamped.

    5.12.6.7.1.1  (03-15-2005)
    Payments Made to Recording Officials

    • It is expected that the Lien Processing Unit will follow up on documents paid by purchase cards or convenience checks.
    • When the recording information is received from recording offices paid by purchase cards or convenience check, an immediate contact will be made with the recording official to determine why recording information was not returned for all documents.
    • The IRS will identify the document with the missing information.
    • If necessary, provide a fax of the document to the recorder if they do not have a copy and obtain the recording information.
    • If recording information is not obtained, a referral to an advisor may be necessary.

    Note:

    Review the lost lien procedures for additional information.

    5.12.6.7.2  (12-01-2005)
    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., billing support voucher, vendor invoice, etc.). Bulk estimates have been established, no RTS entry is needed
      • Convenience Checks - used to provide pre-payment when required by local officials. The request for payment should be processed one day after receipt.
      • 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 the SB/SE budget office. Refer to the SBSE website, Financial Policies and Guidelines - FY-0X (X=fiscal year).

    5.12.6.7.3  (03-15-2005)
    Processing Duplicate Billing Invoices

    • Recording offices will occasionally send a duplicate billing invoice because payment has not been received.
    • When a duplicate billing invoice is received, the lien processing unit will check their records to verify that the original voucher was received and forwarded for payment.
    • If it is determined that the original invoice was forwarded for payment obtain the payment date and check number. This information will be provided to the recording office.
    • If the payment was offset (used to pay another government debt owed by the county/state), that information will be provided to the recording official along with a contact number for Financial Management Services . Further, the recording official should be informed that no other payment for that billing invoice will be made.
    • If it is determined that the invoice was altered because their records did not match the billing support voucher or documents were not recorded that were included on the invoice, an explanation of the discrepancy should be provided. Also, provide copies of the corrected invoice, billing support voucher and unrecorded documents, if requested.
    • If it is determined that the invoice was not forwarded for payment, procedures are outlined above in IRM 5.12.6.7.1.

    5.12.6.8  (03-15-2005)
    Disclosure of Lien Information

    • Delegation Order 5.4 lists the employees authorized to disclose lien payoff information.
    • Any person other than the taxpayer or authorized representative must submit a written request stating the reason the information is needed and must identify the NFTL in question.
    • A prospective purchaser should attach a copy of the sales contract. A lender should attach a copy of a loan application.

    5.12.6.8.1  (12-01-2005)
    Disclosure to Escrow and Title Companies

    • When Form 8821, Tax Information Authorization, is provided, authorized employees may disclose the amount of the outstanding liability secured by the NFTL to escrow companies, title companies, and financial institutions.
    • Form 8821 must be signed by either the taxpayer or the persons identified in 5.12.6.8(2) above and must specify the specific piece of property for sale, tax period, tax year or lien(s) authorized for disclosure.
    • The authorization must be date stamped when received.

    Note:

    This is important since Treasury Regulation 301.6103(c)-1(b) provides that returns and return information cannot be disclosed unless a request is received within 60 days following the date the authorization was signed and dated by the taxpayer. If this time frame is not met a new authorization must be provided.

    • Taxpayers may also authorize disclosure telephonically. Verify the taxpayers' identity using approved functional procedures and document the information in writing. See IRM 11.3.
    • Do not disclose any information regarding any taxes not listed on the NFTL without obtaining the taxpayer's authorization.
    • Disclose NFTL information to fourth (4th) parties, if the third party authorization states that another company/person may be hired to obtain the information AND identifies the company/person AND identifies the taxpayer or party identified in 5.12.6.8 has signed and dated the authorization. The note referenced above applies.

    5.12.6.8.2  (12-01-2005)
    Lien Payoffs

    • Generally, lien payoff requests are received by the Centralized Lien Processing Unit. As a routine matter, employees should obtain a copy of the taxpayer's authorization. If authorization is verbal, they will annotate the ALS history and/or the taxpayer inquiry contact sheet (see Exhibit 5.12.6-11, Lien Payoff Desk - Taxpayer Inquiry). For example, "TP auth. payoff info to ZYZ Escrow for 1999, 2002."
    • 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, determine the reason why the information is being requested. If you are unsure that the payoff amount should be provided, discuss the payoff request with the lien team manager, and if necessary, contact your local disclosure staff.
    • Payoff requests for accounts in statuses 26, 71 with TC 780, 72 or estate tax liens will be forwarded to the function for computation, if received by the lien processing unit.

    5.12.6.8.2.1  (03-15-2005)
    Responding to Payoff Requests

    • Responses will correspond to the payoff request.
    • Verify TIN and x-reference TIN information.
    • In cases where a tax period payoff is requested, a verbal response may be given or a quick note issued and must be documented in the ALS history.
    • Do not provide EIN payoff information with SSN payoff information, unless specifically requested and authorized.
    • If a request is made by a taxpayer with multiple x-reference TINs and he/she is the primary SSN, the letter should be prepared using the primary taxpayer's name only.
    • If a request is received from the taxpayer and it is determined that both lien and non-lien periods exist, also provide the non-lien period information.
    • Complete Letter 3640 (Exhibit 5.12.6-7) to provide lien information to the taxpayer or Letter 3641 (Exhibit 5.12.6-8) to provide information to authorized third parties.
    • Complete lien payoff requests within 14 business days of receipt of request.
    • A case file will be created for review and approval.

    5.12.6.8.2.2  (12-01-2005)
    Computing Lien Payoff Amounts

    • There are several methods available for payoff computations. They are:
      • manual computation,
      • the ALS Payoff Utility, and the
      • correspondex letter.
    • The Lien Unit manager will determine which method will be used.
    • Lien payoff amounts will be computed using established procedures. Include any statutory additions. Use COMPA and INTST to:
      • Compute the payoff to the date provided by the requestor, or
      • if a property transaction, you may elect to do two computations since closing dates often change.

    Note:

    Include recording fees in the payoff computation.

    • By providing two computations, second requests can be minimized. Compute to the closing date and 30 days from the closing date.
    • If a credit balance exists, the appropriate form will be prepared to transfer the credit to a balance due module.
    • If there are no additional balance due modules, the document will be forwarded for approval. Contact an advisor for resolution of the credit balance.
    • If appropriate, a certificate of release will be prepared for the taxpayer.

    5.12.6.8.2.3  (10-01-2003)
    Case Files

    • Case files will be created when a lien payoff request is received.
    • 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.

    5.12.6.8.2.4  (12-01-2005)
    Reviewing the Case File

    • A review process will be created. At a minimum:
      • 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, ensure that the Service has complied with the taxpayer's authorization or the documentation required under IRC 6103(k)(2).
    • To ensure the accuracy of documents being issued, a process must be adopted to review work completed by new employees during the first 90 days of responding to payoff requests. When the immediate manager determines that the employee has an acceptable knowledge of the payoff process, review will be at the managers discretion.

    5.12.6.8.2.5  (10-01-2003)
    Retaining Case Files

    • Case files will be retained for every lien payoff request received.
    • Retain case files for six months.
    • Files will be retained in a manner that is easily retrievable.

    5.12.6.9  (03-15-2005)
    Walk-in Contacts

    • Account balances (with NFTLs) may be provided to taxpayers without contacting the centralized lien unit. However, on an as needed basis, Wage and Investment (W&I) Field Assistance employees may contact the Lien Processing Unit to obtain assistance with:
      • complicated lien payoff requests,
      • requests for certificates of release,
    • When taxpayers request a certificate of release, criteria for releasing the NFTL must be observed. The taxpayers account must be full paid, unenforceable due to lapse of time or the IRS has accepted a bond.
    • W&I will complete a W&I Field Assistance Lien Team Request. See Exhibit 5.12.6-9.

    5.12.6.9.1  (03-15-2005)
    Requests for Payoffs

    • Requests from W&I for lien payoffs are limited to computations of:
      • restricted interest,
      • restricted penalty, or
      • both.
    • The request will be faxed or secure emailed to the Lien Unit.
    • Contact the appropriate lien team and inform them that the request is being faxed. Further, inform the lien team in what form the payoff will be provided. i.e., fax, letter, phone.
    • The lien processing team will ensure that the request is worked expeditiously, including forwarding the request to the Exam Unit for calculation and obtaining an expected completion date.
    • An expected completion date will be provided to the Field Assistor.
    • Upon completion of the computation, the payoff amount will be provided to the Field Assistor and the appropriate payoff letter provided or mailed to the taxpayer.
    • The assistor will provide the payoff amount to the taxpayer.

    5.12.6.9.2  (03-15-2005)
    Requests for Certificates of Release

    • Requests for certificates of release made by W&I field assistors will be forwarded to the lien team fax.
    • When payment is made by certified funds and the local area office is unable to generate a copy of the release, the field assistor will contact the lien unit. The LPU will:
      • Provide the field assistor with an estimated time for completion.
      • Process the release request.
      • Scan the release and email to the assistor.
    • The procedures outlined above will also be used in emergency situations, if certified funds are received.
    • When payment is made by other than certified funds, the request will be processed and the field assistor informed that the release will be generated within 30 days and mailed from one of the national print sites.
    • When a copy is provided to the taxpayer by the field assistor, he/she is responsible for providing the taxpayer with instructions for having the document recorded. The taxpayer will also be informed of the recording fee requirement.

    5.12.6.9.2.1  (03-15-2005)
    Requests for Other Types of Assistance

    • Requests may be received by the lien processing team that involve other lien issues and certificates.
    • Refer these requests to the appropriate advisory group or they may forward the request to their Field Office Resource Team (FORT).
    • The FORT will either resolve the issue or forward it to Technical Services for resolution. Technical Services Advisory assistance may be requested by sending a secure email to the advisory group manager based on the location of the taxpayer. Use SERP to identify the group location. Provide taxpayer information and the reason for assistance.

    5.12.6.10  (10-01-2003)
    Post Payments Using Designated Payment Code 07

    • 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.
    • A designated payment code (DPC) is mandatory on all collection initiated posting vouchers. TC 670 is used to post money received for a lien payoff.
    • Use DPC 07 when applying payments secured for the release of a NFTL.
    • When a check is received in response to a payoff letter:
      • Verify if the money received is the correct amount and the due date for payment as stated on the payoff letter has not passed.
      • Verify the payment type, cashier's check, bank/postal money order, bank check, personal check.
      • Release liens pertinent to the payment only if the tax period is full paid and the funds are certified.

    5.12.6.11  (03-15-2005)
    Reports

    • A number of reports are created by ALS that directly relate to protecting the government's interest, protecting taxpayer rights, and maintaining the Service's priority. These reports, except where identified, will be resolved by the Centralized Lien Processing Unit. Supplemental procedures may be developed by the lien unit. The reports are:
      • Satisfied Module Reject Report - this report shows modules from the weekly download, which could not be systemically processed. This report lists all modules that rejected as the result of TIN, form/period mismatch, restricted interest, restricted penalty and entity/st12 mismatches. Rejects will generate entries to the report without marking periods as satisfied. There are two versions of this report, one is from a download from Master file and the second is from Non Masterfile (ANMF). These reports must be accessed and worked weekly, follow up actions are required on all items. Restricted interest and penalty accounts will be released immediately. The ENT/ST12 portion of the report is currently not cumulative and MUST BE PRINTED WEEKLY.
      • ACS/ICS Reject Report - This report is systemically generated each time an ACS/ICS tape is loaded to ALS daily/weekly. Liens containing invalid form types and zip codes are systemically rejected. The ACS/ICS Reject Report produces a list of taxpayers and respective POA names and addresses, liens rejected due to invalid data and liens that are duplicates.
      • Missing POD Report - The Missing POD report is a list of employees (usually revenue officers) who do not have TSIGNs in the ALS database. This report is printed weekly and is worked immediately.
      • Lost Lien Report - The Lost Lien Report is a list of liens where no court recording data exists on ALS . This report should be worked monthly. This report may highlight problems with certain recording offices in processing liens.
      • Potential Refile Report - The Potential Refile Lien (PRL) Report lists all liens within the refile period where the collection statute has been extended or suspended. The refile period is a 1-year period ending 30 days after the collection statute expires. When the CSED date changes on MF, the revised CSED date field is passed on to ALS. The report highlights (*) lien periods that are within the last 90 days of the refile period. Timely refiling of liens ensures that the government's priority is maintained. This report should be run and worked quarterly.

    Note:

    Until revisions are made to this report, the LPU will, upon request, print the responsible function a copy of the report. THE UNIT IS RESPONSIBLE FOR NO OTHER ACTIONS.

      • NMF 360 Report - The NMF 360 Report provides a list of NMF modules that require manual input of TC 360 for assessment of recording fees. 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 or reversed on master file.

    5.12.6.11.1  (03-15-2005)
    Satisfied Module (SAT MOD) Reject Report

    • To access this report from the print queue, select ALS Lien Reports. Select xx.SAT_REJ_mmdd. The report must be closed by satisfying the module listed on the report or by using the RSAT function on ALS and updating with a closing indicator. The indicators are:
      • O = Open- module is not satisfied and lien cannot be released. Use when payment is reversed due to insufficient funds.
      • S = Satisfied - module is satisfied
      • N = No action - module is in STAT 12 but the lien cannot be released due to additional interest or penalty is due or lien is not found on ALS.

    .

    • Certificates of release will be issued immediately (without recomputation) on restricted interest or penalty accounts identified on the SAT MOD Reject Report.
      • No Ent/Per-Stat 12 - master file open lien indicator (TC 582) with no match on ALS with master file, TIN, MFT and period. Determine if there is an invalid TIN (check IDRS) or a different TIN in your ALS database that was corrected on MF causing it to list on the report. Research using command code INOLES. Determine if there is an open manual lien filed but not in the ALS. Research this by calling the courthouse, accurint or mailing a request to the recording office. If found, the lien needs to be loaded to ALS using SCREATE and the module satisfied with an indicator of 528 on ALS. Also update RSAT to close from the report indicating S as the closing indicator. If no lien is found, close the item from the report using RSAT and updating with N as the closing indicator. Request input of TC 583.
      • 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. Use the same closing actions outlined in (c) above. Request additional information from the appropriate function. If no other information can be obtained, request input of TC 583.
      • Use the procedures outlined above for resolving NMF accounts.

    5.12.6.11.2  (10-01-2003)
    ACS/ICS Reject Report

    • The ACS/ICS reject report can be accessed by typing the word print at the menu selection. Select Spool from the menu and then select " ACS.mmdd" . There may be up to four selections, e.g., " acs_poas; acs_rejects; acs_status; acs_dups" . Each selection contains different information. This report should be printed weekly and resolved three days after receipt. The reports are worked as follows:
      • acs_poa - When ACS liens are run and there is a POA assigned to an account, ALS will generate a report that will list the SLID number of the ACS lien, the name of the taxpayer and the POA name and address. Use the " NOTADD" screen to input these POAs.
      • acs_rejects - Liens could be rejected for a number of reasons and need to be resolved. Reason 1 "Could not determine filing location or unknown code" -- verify location or zip code where lien should be filed; check IDRS for BOD (W&I or SB/SE) --create lien using the correct filing information NOTE: If the zip code is not in ALS, contact the ALS Coordinator before creating the lien. Reason 2 "Invalid future assessment date" ---check IDRS for correct assessment date---create lien on ALS
      • acs_dups - "Duplicate lien not loaded" ---research ALS to make sure a lien was filed for tax periods as indicated on the report. If a lien has been filed (which is normally the case), no action is required. If a lien has not been filed, contact the requestor for additional guidance.
      • acs_status - contains log of liens by SLID that successfully loaded and liens that were rejected. No action is required.
    • Additional information can be found in the ALS User Guide.

    5.12.6.11.3  (12-01-2005)
    Missing POD Report

    • Missing_POD - The employee (normally a revenue officer) number was not found in the employee table. This is usually occurs when ICS does not upload the current information.
    • This occurs when an RO requests a lien via ICS and the RO is not in the ALS table or the RO’s employee number has changed.
    • Print a copy of the ALS RO POD Listing to locate the POD key. The list may provide multiple POD keys.
    • Use the RO's phone number to determine the correct POD key. If you're unsure which key is correct, contac