Finding out that a tax lien has been filed against your property is never something you want to hear. According to the IRS, a tax lien is automatically put into place if you do not pay your tax debt after receiving your first bill from the IRS. A Notice of Federal Tax Lien basically notifies other creditors that the IRS is at the front of the line to recoup your debt.
But what if you never received any notification from the IRS that you had a tax debt because the notification was sent to the wrong address? No person or organization is perfect, after all. In fact, in 2015, actor Robert De Niro has assessed a tax lien for $6.4 million after the actor did not respond to any late notices. However, the IRS apparently sent them to an incorrect address.
Does the IRS have to notify you before taking action?
Yes. However, they are not specifically required to provide proof that you received the notification. For example, if a notice is sent via certified mail, this is typically considered sufficient notice on behalf of the IRS. Even if you do not accept delivery, the IRS has shown that they fulfilled their duty to notify you of your tax debt.
Are you still responsible if the IRS sent the notification to the incorrect address?
Yes, provided the tax debt itself is valid. The original tax debt is not negated, even if the IRS made an error.
Can you appeal a tax lien due to an IRS error?
Yes. If the tax debt is valid, you are still responsible for that. However, if the IRS made an error and you never received any notification due to this error, you can appeal a tax lien.
It is important to keep in mind, though, that the IRS and the courts put a high value on personal responsibility. Yes, you may not have received any notification of tax debt, but you are still responsible for ensuring your taxes are filed correctly, even if you have an accountant do it for you. In De Niro’s case, he ended up having to pay the $6.4 million debt to the IRS.