Summary of S.1124, the Levin-Coleman Tax Lien Simplification Act

The Levin-Coleman Tax Lien Simplification Act [PDF] 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 centralized, electronic registry would not only be more efficient and less burdensome, it would also provide estimated taxpayer savings of $570 million over ten years.

Specifically, the bill would:

• require the IRS to establish an electronic national tax lien registry that is accessible and searchable by the public on the Internet at no cost;
• substitute the national registry for the current decentralized lien filing system;
• make filings of tax lien notices and related documents effective from the date and time of recording in the national registry, just as they are now from the date and time of local filing;
• reduce from 30 days to 10 days the time allotted for the IRS to release a tax lien after the tax liability has been resolved;
• require Treasury to secure the registry and prevent data tampering;
• require Treasury to review the information currently included in public tax lien filings to determine whether any information should be excluded or protected from disclosure in the national registry;
• make the new system available for filing certificates of release, discharge, subordination, and nonattachment and re-filed liens;
• authorize Treasury to issue the necessary regulations and forms; and
• require Treasury to establish the registry by January 1, 2009, but also 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 $570 million over ten years;
• make it easier for the IRS to file timely tax liens;
• reduce the incidence of lost and misfiled tax liens;
• simplify the filing rules for federal tax liens by eliminating the many different sets of rules that apply in the 50 states;
• make it easier for taxpayers to review their liens and fix errors;
• make it easier for the public to find existing tax liens;
• require faster removal of tax liens that have been resolved;
• protect appropriate information from disclosure on the Internet.