Summary of the Tax Lien Simplification Act

Wednesday, July 20, 2011

SUMMARY OF 
TAX LIEN SIMPLIFICATION ACT
July 2011
The Tax Lien Simplification Act would create an electronic federal tax lien registry on the Internet, available to the public at no cost, replacing the current antiquated system requiring federal tax liens to be filed on paper in more than 4,000 locations across the country.  This electronic registry would not only be more efficient and less burdensome, it would also provide estimated taxpayer savings of $150 million over ten years.
The bill would: 
require the establishment an electronic, searchable, and Internet accessible  national tax lien registry available to the public at no cost;
substitute the national registry for the current paper lien filing system;
allow the filing on the registry of tax lien notices and related documents, and enable the system to provide certified documents for use in court proceedings;
make filings of tax lien notices and related documents effective from the date and time of recording in the national registry, in the same way they are for paper filings;
require Treasury to issue regulations or guidance to ensure system reliability and accessibility, protect personal data, prevent data tampering, and develop effective search criteria;
reduce from 30 days to 20 days the time allotted for the IRS to release a tax lien after the tax liability has been resolved;
require one or more pilot projects to be carried out within two years of enactment of the bill, and require a successful nationwide test of the tax lien registry before it can be made operational;
give Treasury the authority to determine the date on which the registry becomes operational and legally effective;
allow continued use of the old system in parallel with the new system for an appropriate time period to ensure a smooth transition.  
Among other benefits, the new tax lien registry would:
save federal taxpayers $150 million in administrative costs over ten years;
make it easier for the public to get prompt notice of tax liens;
reduce the incidence of lost and misfiled tax liens;
simplify the filing rules by eliminating the many different sets of rules that apply in the 50 states;
make it easier for taxpayers to review their liens and identify errors;
make it easier for the public to find existing tax liens; 

require faster release of tax liens that have been res

olved; and

relieve state and localities of the

cost of maintaining tax lien records.

A press release about the bill is available here. The text of the bill as introduced is available here. Read Sen. Levin's floor statement on the bill introduction here.

The Tax Lien Simplification Act would create an electronic federal tax lien registry on the Internet, available to the public at no cost, replacing the current antiquated system requiring federal tax liens to be filed on paper in more than 4,000 locations across the country.  This electronic registry would not only be more efficient and less burdensome, it would also provide estimated taxpayer savings of $150 million over ten years.

The bill would: 

  • require the establishment an electronic, searchable, and Internet accessible  national tax lien registry available to the public at no cost;
  • substitute the national registry for the current paper lien filing system;
  • allow the filing on the registry of tax lien notices and related documents, and enable the system to provide certified documents for use in court proceedings;
  • make filings of tax lien notices and related documents effective from the date and time of recording in the national registry, in the same way they are for paper filings;
  • require Treasury to issue regulations or guidance to ensure system reliability and accessibility, protect personal data, prevent data tampering, and develop effective search criteria;
  • reduce from 30 days to 20 days the time allotted for the IRS to release a tax lien after the tax liability has been resolved;
  • require one or more pilot projects to be carried out within two years of enactment of the bill, and require a successful nationwide test of the tax lien registry before it can be made operational;
  • give Treasury the authority to determine the date on which the registry becomes operational and legally effective;
  • allow continued use of the old system in parallel with the new system for an appropriate time period to ensure a smooth transition.

Among other benefits, the new tax lien registry would:

  • save federal taxpayers $150 million in administrative costs over ten years;
  • make it easier for the public to get prompt notice of tax liens;
  • reduce the incidence of lost and misfiled tax liens;
  • simplify the filing rules by eliminating the many different sets of rules that apply in the 50 states;
  • make it easier for taxpayers to review their liens and identify errors;
  • make it easier for the public to find existing tax liens; 
  • require faster release of tax liens that have been resolved; and
  • relieve state and localities of the cost of maintaining tax lien records.