Federal Tax Lien Registry

07/25/2011 9:26 PM | Anonymous

Senators Carl Levin (D-MI) and Mark Begich (D-AK) have introduced legislation (S. 1390) that would require the IRS to file tax liens in a centralized electronic database instead of in the local property records office.  As the Senators envision it, the electronic registry would be accessible by the public and free to search and would index liens by "at a minimum, taxpayer name, the State of the taxpayer's address as shown on the notice of lien, the type of tax, and the tax period." The Senators argue that this bill would save $150 Million a year and help reduce the amount of time necessary to release a tax lien down from 30 days to 20 days.   More information about the bill can be found here.

Many think this would be a disaster for traditional search and examination procedures.   We have enough problems dealing with “common names” in large counties.   It would be all but impossible to sort out all of the “John Smith” entries in a national registry to focus only on those tax liens which might affect a given property. 

The practical reality is that such a law will likely lead to a further erosion of search standards to essentially ignore (and insure over) tax liens against certain common names, simply because there is no practical way to sort them out.  Ironically, this could actually reduce IRS tax collections, because the title industry would no longer have any practical ability to assist in their collection.

ALTA is already working on this issue.   If you have any thoughts on how this proposal would reduce efficiency for title processes please forward them to Kelley Williams ALTA Manager of Government Affairs at kwilliams@alta.org.

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