Risk Management Blog

UCC & Corporate Due Diligence

Resource Guide for Legal and Financial Professionals

Tax Lien Searching Blog Series Part Three: Reviewing Tax Lien Search Results

UCC, Due Diligence

In this, our final installment of the Tax Lien Searching blog series, we offer up some tips for making sense of your tax lien search results. What follows is a brief discussion of three important considerations when reviewing tax lien search results.

Lien Amount
Tax liens are filed for a specific dollar amount, representing the past-due tax balance and any interest or penalty charges assessed at the time of the lien’s preparation.  The actual fees due at the time you run your search could be more than are listed on the notice of tax lien. If the lien has not been satisfied at the time you run your search, interest and penalties are still accumulating.

If you do not request copies with your tax lien search, remember to ask your searcher to abstract the dollar amount onto your search report for your review. Note however, that in many jurisdictions the dollar amount is not reflected on the index. In these cases, the only means to obtain the dollar amount is to purchase the document images.

Taxpayer Name
Tax liens can be filed on a business, an individual or it may list both a business and its owner. Amid privacy concerns, filing offices are now removing most identifying pieces of information from tax lien records including tax ID numbers, social security numbers and in some cases, a taxpayer’s zip code. Filing offices have even redacted these numbers retroactively from existing records. Without these identifiers, it can be difficult to determine if the taxpayer named on a tax lien is your party. If you suspect a tax lien affects your debtor or applicant, you will need to work closely with them to determine if the lien debt is, in fact, theirs.

Tax Lien Releases
When a tax lien debt has been paid, the filing agency will file a release of tax lien. The release alerts a searcher that the debt has been satisfied. A released tax lien no longer holds a claim to the taxpayer’s property, so it is up to you if you want released tax liens included on your search report. Keep in mind though that a standard tax lien search does not include released tax liens and additional fees may apply to have them listed on your report.

When reviewing tax lien search results you will want to watch for partial tax lien releases. As mentioned in the Taxpayer Name section above, a tax lien can list more than one taxpayer. Sometimes one taxpayer will resolve their portion of the debt and the agency will file a partial release to remove this taxpayer’s name from the lien record. A partial release only removes the identified party; the lien remains active for any other parties listed on the tax lien. Take care not to mistake a partial release for a full release when reviewing your tax lien search results.




Leave a Reply