According to a recent report by Tax Analysts, in March, the Internal Revenue Service (IRS) plans to roll out an alternative pilot program that will affect when Notices of Federal Tax Lien (NFTL) are filed. Currently, NFTL are generally only filed in cases where more than $25,000 is owed to the IRS. Following a recommendation of the Taxpayer Advocate Service, the IRS will deviate from this policy in order to test taxpayer behavior in an attempt to increase the effectiveness of its collection efforts.

The pilot program will create a number of different test groups and measure the results of collection measures associated with these groups. For some, this means that the IRS will likely send a series of collection letters instead of filing an NFTL, even if the balance due to the IRS exceeds $25,000. For others, the IRS may issue an NFTL where the liabilities owed are only between $10,000 and $25,000. Based on the results of this pilot program, there could ultimately be a change in internal IRS policy regarding when an NFTL is issued; however, it is not yet clear how many cases will be selected for the pilot program, how long the pilot program will last, or how long it will take for results to be processed and applied to future policy decisions of the IRS.

For taxpayers with liabilities owed to the Internal Revenue Service, a Notice of Federal Tax Lien is only one tool of many used to enhance collection efforts of the IRS. An NFTL is a public filing that puts potential creditors on notice of liabilities owed to the Internal Revenue Service and can affect a number of financial decisions, such as a taxpayer’s ability to obtain a personal loan or credit card, re-finance a mortgage, purchase a business, gain employment, or even travel abroad. Even if the IRS is currently garnishing wages, social security, levying other assets, or permits an installment agreement to pay liabilities, an NFTL may still be filed against a taxpayer.

If a Notice of Federal Tax Lien has already been filed against you or your business or if you owe a significant amount to the IRS, you should contact a tax attorney to evaluate your options. For a free consultation, please contact Brandon N. Mourges at or 410.951.1149.