The IRS is permitted to file a Notice of Federal Tax Lien (“NFTL”) to perfect a tax lien that arises by operation of law under the Internal Revenue Code for unpaid federal tax. It may become necessary to obtain copies of the filed NFTL if the taxpayer, who should have been mailed a copy, does not have the NFTL in his or her possession, or to confirm that the IRS filed the NFTL in the correct place to encumber property against the interests of third parties.
The location for the filing of a NFTL is determined by a combination of federal and state law. IRC § 6232(f) permits states to designate the place for filing the NFTL.
Filing of a NFTL for real property. A NFTL is filed where designated “by the laws of such State, in which the property subject to the lien is situated.” To file a NFTL on real property located in North Dakota, one must look to North Dakota law for the location of filing. Under North Dakota statute, the NFTL is filed in the central indexing system of the North Dakota Secretary of State:
Notices of liens upon real property for obligations payable to the United States and certificates and notices affecting the liens must be filed in the central indexing system and associated to the county in which the real property subject to the liens is situated.
Filing of a NFTL for personal property. A NFTL is filed where the personal property is situated. Personal Property is “situated” for an individual taxpayer “at the residence of the taxpayer at the time the notice of lien is filed.” For a corporation or partnership, residence is “the place at which the principal executive office of the business is located. For “a corporation, limited liability company, or a partnership whose principal executive office is in” North Dakota, the NFTL is filed with the North Dakota Secretary of State. For individuals, the NFTL is filed in “the recorder of the county where the person against whose interest the lien applies resides at the time of filing of the notice of lien.”
Practice Point. I have seen a time where the IRS filed the NFTL in the wrong location and thereby the tax lien did not encumber the property regarding a sale to a third party or bank refinancing. In other cases, I have had to obtain copies of the NFTL for review and it is helpful to know where to obtain a copy of the NFTL.
About the Author. Jared M. Le Fevre is a Partner in the Tax, Trusts and Estates Practice Group of Crowley Fleck PLLP. Mr. Le Fevre represents taxpayers before the IRS, IRS Independent Office of Appeals, U.S. Tax Court, Federal District Court and state tax agencies throughout Montana, Wyoming, North Dakota, Idaho, and Utah. Mr. Le Fevre is involved in federal, state and local tax audits, appeals, and tax resolution throughout these western states. Mr. Le Fevre also advises clients on the tax effects of business and real estate transactions.
Date of information: May 30, 2022.
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 IRC § 6232(f)(1)(a).
 § 35-29-02, North Dakota Century Code.
 IRC § 6323(f).
 IRC § 6323(f)(1)(A)(iii).
 IRC § 6323(f)(3).
 35-29-02(3)(d), North Dakota Century Code.