NAPA — Napa County Assessor-Recorder-County Clerk John Tuteur said Thursday he is objecting to the Internal Revenue Service's announcement that as of this past Tuesday, the IRS will pay only the actual costs to record notices of federal tax liens and releases of federal tax liens in California counties.
Tuteur said Napa County on Sept. 24 received an undated letter from the IRS in which the IRS said it will pay $10 instead of the current $15 to record a federal tax lien in Napa County. The IRS also said it will pay $5 instead of the current $7 fee to file a release of federal lien in Napa County.
"Any amount of the recording fee not specifically to recover the costs of a document does not apply to IRS filings. Requiring the IRS to pay these additional amounts would be imposing a tax on the federal government," Dean Curry, operations manager of the IRS's Centralized Lien Operation, said in the letter.
Curry also said under the Supremacy Clause of the U.S. Constitution, a state may not impose a tax on the federal government.
Tuteur responded by stating Napa County will refuse to record the lien documents until "until the correct fees are paid."
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"Our recording fees are established under state statute and county policy, and we apply them fairly to everyone," Tuteur said.
"The people who really suffer from this arbitrary action by the IRS are taxpayers who have paid off their federal tax liens and need the release recorded to clear their credit history," Tuteur said.
An additional impact of the IRS's decision is that title companies, lenders and other real estate industry participants will not know if a prospective borrower has outstanding federal tax obligations until the liens are recorded, Tuteur said.
Tuteur said he has asked U.S. Rep. Mike Thompson, D-Napa, to ask the House of Representatives' oversight committee in Washington, D.C., to investigate and convince the IRS to pay the "correct fees."
Napa County recorded 496 of the federal lien documents between July 1, 2018 and June 30, Tuteur said.