[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1390 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                S. 1390

To amend the Internal Revenue Code of 1986 to simplify, modernize, and 
    improve public notice of and access to tax lien information by 
   providing for a national, Internet accessible, filing system for 
               Federal tax liens, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 20 (legislative day, July 19), 2011

 Mr. Levin (for himself and Mr. Begich) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to simplify, modernize, and 
    improve public notice of and access to tax lien information by 
   providing for a national, Internet accessible, filing system for 
               Federal tax liens, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This title may be cited as the ``Tax Lien Simplification Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) The present decentralized system for filing Federal tax 
        liens in local property offices, which was established before 
        the advent of modern computers, the Internet, and e-government 
        programs, is inefficient, burdensome, and expensive.
            (2) Current technology permits the creation of a 
        centralized Federal tax lien filing system which can provide 
        for enhanced public notice of and access to accurate tax lien 
        information in a manner that is more efficient, more timely, 
        and less burdensome than the existing tax lien filing system; 
        which would expedite the release of liens; and which would be 
        less expensive for both taxpayers and users.
    (b) Purpose.--The purpose of this Act is to simplify and modernize 
the process for filing notices of Federal tax liens, to improve public 
access to tax lien information, and to save taxpayer dollars by 
establishing a nationwide, Internet accessible, and fully searchable 
filing system for Federal tax liens which would replace the current 
system of local tax lien filings.

SEC. 3. NATIONAL TAX LIEN FILING SYSTEM.

    (a) Filing of Notice of Lien.--Subsection (f) of section 6323 of 
the Internal Revenue Code of 1986 is amended to read as follows:
    ``(f) Filing of Notice; Form.--
            ``(1) Filing of notice.--The notice referred to in 
        subsection (a) shall be filed in the Federal tax lien registry 
        operated under subsection (k). The filing of a notice of lien, 
        or a certificate of release, discharge, subordination, or 
        nonattachment of lien, or a notice of withdrawal of a notice of 
        lien, in the Federal tax lien registry shall be effective for 
        purposes of determining lien priority regardless of the nature 
        or location of the property interest to which the lien 
        attaches.
            ``(2) Form.--The form and content of the notice referred to 
        in subsection (a) shall be prescribed by the Secretary. Such 
        notice shall be valid notwithstanding any other provision of 
        law regarding the form or content of a notice of lien.
            ``(3) Other national filing systems.--Once the Federal tax 
        lien registry is operational under subsection (k), the filing 
        of a notice of lien shall be governed by this title and shall 
        not be subject to any other Federal law establishing a place or 
        places for the filing of liens or encumbrances under a national 
        filing system.''.
    (b) Refiling of Notice.--Paragraph (2) of section 6323(g) of the 
Internal Revenue Code of 1986 is amended to read as follows:
            ``(2) Refiling.--A notice of lien may be refiled in the 
        Federal tax lien registry operated under subsection (k).''.
    (c) Release of Tax Liens or Discharge of Property.--
            (1) In general.--Section 6325(a) of the Internal Revenue 
        Code of 1986 is amended by inserting ``, and shall cause the 
        certificate of release to be filed in the Federal tax lien 
        registry operated under section 6323(k),'' after ``internal 
        revenue tax''.
            (2) Release of tax liens expedited from 30 to 20 days.--
        Section 6325(a) of such Code is amended by striking ``not later 
        than 30 days'' and inserting ``not later than 20 days''.
            (3) Discharge of property from lien.--Section 6325(b) of 
        such Code is amended--
                    (A) by inserting ``, and shall cause the 
                certificate of discharge to be filed in the Federal tax 
                lien registry operated under section 6323(k),'' after 
                ``under this chapter'' in paragraph (1),
                    (B) by inserting ``, and shall cause the 
                certificate of discharge to be filed in such Federal 
                tax lien registry,'' after ``property subject to the 
                lien'' in paragraph (2),
                    (C) by inserting ``, and shall cause the 
                certificate of discharge to be filed in such Federal 
                tax lien registry,'' after ``property subject to the 
                lien'' in paragraph (3), and
                    (D) by inserting ``, and shall cause the 
                certificate of discharge of property to be filed in 
                such Federal tax lien registry,'' after ``certificate 
                of discharge of such property'' in paragraph (4).
            (4) Discharge of property from estate or gift tax lien.--
        Section 6325(c) of such Code is amended by inserting ``, and 
        shall cause the certificate of discharge to be filed in the 
        Federal tax lien registry operated under section 6323(k),'' 
        after ``imposed by section 6324''.
            (5) Subordination of lien.--Section 6325(d) of such Code is 
        amended by inserting ``, and shall cause the certificate of 
        subordination to be filed in the Federal tax lien registry 
        operated under section 6323(k),'' after ``subject to such 
        lien''.
            (6) Nonattachment of lien.--Section 6325(e) of such Code is 
        amended by inserting ``, and shall cause the certificate of 
        nonattachment to be filed in the Federal tax lien registry 
        operated under section 6323(k),'' after ``property of such 
        person''.
            (7) Effect of certificate.--Paragraphs (1) and (2)(B) of 
        section 6325(f) of such Code are each amended by striking ``in 
        the same office as the notice of lien to which it relates is 
        filed (if such notice of lien has been filed)'' and inserting 
        ``in the Federal tax lien registry operated under section 
        6323(k)''.
            (8) Release following administrative appeal.--Section 
        6326(b) of such Code is amended--
                    (A) by striking ``and shall include'' and insert 
                ``, shall include'', and
                    (B) by inserting ``, and shall cause the 
                certificate of release to be filed in the Federal tax 
                lien registry operated under section 6323(k),'' after 
                ``erroneous''.
            (9) Withdrawal of notice.--Section 6323(j)(1) of such Code 
        is amended by striking ``at the same office as the withdrawn 
        notice'' and inserting ``in the Federal tax lien registry 
        operated under section 6323(k)''.
            (10) Conforming amendments.--Section 6325 of such Code is 
        amended by striking subsection (g) and by redesignating 
        subsection (h) as subsection (g).
    (d) Federal Tax Lien Registry.--Section 6323 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(k) Federal Tax Lien Registry.--
            ``(1) In general.--The Federal tax lien registry operated 
        under this subsection shall be established and maintained by 
        the Secretary and shall be accessible to and searchable by the 
        public through the Internet at no cost to access or search. The 
        registry shall identify the taxpayer to whom the Federal tax 
        lien applies and reflect the date and time the notice of lien 
        was filed, and shall be made searchable 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 
        registry shall also provide for the filing of certificates of 
        release, discharge, subordination, and nonattachment of Federal 
        tax liens, as authorized in sections 6325 and 6326, and may 
        provide for publishing such other documents or information with 
        respect to Federal tax liens as the Secretary may by regulation 
        provide under paragraph (2)(C).
            ``(2) Administrative action.--
                    ``(A) In general.--The Secretary shall issue 
                regulations or other guidance providing for the 
                maintenance, reliability, accessibility, and use of the 
                Federal tax lien registry established under paragraph 
                (1). Such regulations or guidance shall address, among 
                other matters, issues related to periods during which 
                the registry may be unavailable for use due to routine 
                maintenance or other activities.
                    ``(B) Fees.--The Secretary may charge a taxpayer's 
                account with a reasonable filing fee for each notice of 
                lien and each related certificate, notice, or other 
                filing recorded in the Federal tax lien registry with 
                respect to such taxpayer, in an amount determined by 
                the Secretary to be sufficient to defray the costs of 
                operating the registry. The Secretary may also charge a 
                reasonable fee to any person who requests and receives 
                under section 6323(d)(1) information or a certified 
                copy of a filing in the Federal tax lien registry to 
                defray the costs of providing such information or 
                copies.
                    ``(C) Filing of other items on registry.--The 
                Secretary may, by regulation, provide for the filing of 
                items on the registry other than Federal tax liens, 
                including criminal fine judgments under section 3613 of 
                title 18, United States Code, and civil judgments under 
                section 3201 of such title, if the Secretary determines 
                that it would be useful and appropriate to do so.''.
    (e) Certified Copies of Information From Registry.--Section 6323 of 
the Internal Revenue Code of 1986, as amended by subsection (d), is 
amended by adding at the end the following new subsection:
    ``(l) Certified Copies of Information From Federal Registry.--The 
Secretary shall make available in a certificate that can be admitted 
into evidence in the courts of the United States without extrinsic 
evidence of its authenticity the following information to any person 
that submits a request in a form specified by the Secretary:
            ``(1) Whether there is on file in the Federal tax lien 
        registry operated under subsection (k) at a date and time 
        specified by the Secretary, but not a date earlier than 3 days 
        before the creation of the certificate, any notice of a lien 
        that--
                    ``(A) designates a particular taxpayer,
                    ``(B) has not been fully satisfied, become legally 
                unenforceable, or been released or withdrawn, and
                    ``(C) if the request so states, has been fully 
                satisfied, become legally unenforceable, or been 
                released or withdrawn, and a record of which is 
                maintained on the registry at the time of filing of the 
                request,
            ``(2) the date and time of filing of and the information 
        provided in each notice of lien, and
            ``(3) if the request so states, the date and time of filing 
        of and the information provided in each certificate of release, 
        discharge, subordination, or non-attachment and each notice of 
        withdrawal recorded in the registry with respect to each notice 
        of lien.''.
    (f) Effective Date; Implementation of Registry.--
            (1) Effective date.--The amendments made by this section 
        shall take effect on the date determined by the Secretary of 
        the Treasury under paragraph (2)(E) and, except as provided in 
        paragraph (2)(F), shall apply to notices of liens filed after 
        such date.
            (2) Implementation of federal tax lien registry.--
                    (A) Pilot project.--Prior to the implementation of 
                the Federal tax lien registry under section 6323(k)(1) 
                of the Internal Revenue Code of 1986 (as added by this 
                section), the Secretary of the Treasury, or the 
                Secretary's delegate, shall conduct and shall complete 
                by not later than 2 years after the date of the 
                enactment of this Act 1 or more pilot projects to test 
                the accessibility, reliability, and effectiveness of 
                the electronic systems designed to operate the 
                registry.
                    (B) GAO review.--Within 3 months after the 
                completion of such a pilot project, the Government 
                Accountability Office shall provide a written 
                evaluation of the project results and provide such 
                evaluation to the Secretary of the Treasury, the 
                Commissioner of Internal Revenue, and appropriate 
                committees in Congress. The Secretary and Commissioner 
                shall cooperate with, and provide information requested 
                by, the Government Accountability Office to enable the 
                evaluation to be completed by the date specified.
                    (C) Nationwide test.--Upon the completion of 1 or 
                more such pilot projects and after making a 
                determination that the electronic systems designed to 
                operate the Federal tax lien registry are sufficiently 
                accessible, reliable, and effective, the Secretary of 
                the Treasury, or the Secretary's delegate, shall 
                conduct a nationwide test of the Federal tax lien 
                registry to evaluate its capabilities and 
                functionality.
                    (D) Data protection.--Prior to the implementation 
                of such registry, the Secretary of the Treasury, or the 
                Secretary's delegate, shall take appropriate steps to--
                            (i) secure and prevent tampering with the 
                        data recorded in the registry,
                            (ii) review the information currently 
                        provided in public lien filings and determine 
                        whether any such information should be excluded 
                        or protected from public viewing in such 
                        registry, and
                            (iii) develop a system, after consultation 
                        with the States, industry, and other interested 
                        parties, and after consideration of search 
                        criteria developed for other public filing 
                        systems including Article 9 of the Uniform 
                        Commercial Code, that will enable users of the 
                        registry, when examining tax lien information 
                        for a taxpayer with a common name, to identify 
                        through reasonable efforts the specific person 
                        to whom such tax lien relates.
                    (E) Declaration of registry effective date.--Upon 
                the successful completion of a nationwide test of the 
                Federal tax lien registry system, the Secretary of the 
                Treasury shall determine and announce publicly a date 
                upon which the registry shall take effect and become 
                operational.
                    (F) Orderly transition.--In order to permit an 
                orderly transition to the Federal tax lien registry, 
                the Secretary of the Treasury may by regulation 
                prescribe for the continued filing of notices of 
                Federal tax liens in the offices of the States, 
                counties, and other governmental subdivisions after the 
                determination of an effective date under subparagraph 
                (E) under the provisions of section 6323(f) as in 
                effect before such effective date, for an appropriate 
                period not to exceed 2 years after such effective date.
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