As Floyd Mayweather prepares for his fight with Conor McGregor, he can count one victory even before he enters the ring against the UFC star. The IRS has released the WBA (Super), WBC, The Ring, and lineal welterweight champ’s $3.3 million dollar tax lien.
What makes the release unusual is that “Money” still owes money. Close to $30 million still due to the IRS, according to some estimates.
Mayweather paid off the full amount, regardless of any money he still owes or will owe after his match with McGregor. His story reveals the complexities and challenges that taxpayers, regardless of their largesse, face when the IRS comes calling with a tax lien.
A Notice of Federal Tax Lien covers all property to ensure that the IRS is paid. The agency issues one after sending a Notice and Demand for Payment and not receiving payment in full in 10 days. Courts use the order to establish priority in bankruptcy proceedings and real estate sales. After 10 years, the lien is automatically released if the IRS has not refiled.
While issuing a lien is second nature to the agency, it does not automatically mean they will seize or sell anything. The documents are made public to anyone, including creditors. The aggressive collection tactic ruins credit and can even prevent real estate closings.
A recently added lien-related penalty allows the IRS to revoke passports via the State Department. Travelers with tax debts at $50,000 or higher cannot secure a new passport or have one removed. They can also rescind existing documents.
Like Mayweather cutting a check, getting a lien released is as simply as making full payment (including interest and penalties) or posting a bond guaranteeing payment. However, getting them removed from the public record is anything but simple.
The IRS does not make things easy. A government report revealed that lien notices often go awry with multiple mishandlings and gaffes. The initial mailing of notices fail to clearly explain taxpayers’ rights to appeal or, in boxing parlance, how they can get up off the mat.