If you are planning on moving your business to a new address, make sure to file the appropriate paperwork with the Internal Revenue Service. In one recent case, a taxpayer’s failure to properly notify the IRS of an address change barred it from challenging a tax lien.

A taxpayer moved from his primary residence and he rented a post office box temporarily. He stopped using the P.O. box in 2005 and directed the post office to forward his mail to his new address until January 1, 2007.

In May 2006, the IRS sent a letter to the taxpayer’s P.O. box, which it had on file has his last known address, notifying him of a tax assessment. The post office forwarded the letter to the taxpayer at his new address, but the taxpayer never provided his new address to the IRS. After the taxpayer failed to pay the assessment, the IRS sought a tax lien on his property. The taxpayer argued, however, that he had never been properly notified of the lien because the IRS sent the notices to his P.O. box. 

At trial, the court agreed with the IRS that the lien was proper. So long as notice had been sent to the taxpayer’s last known address, it is not necessary for the taxpayer to actually receive it for the lien to be proper.

The lesson from this case is that it is not enough to simply notify the local post office that you are moving. Make sure to notify the IRS, too.

Source: Business Management Daily, “Moving? Remember to tell IRS,” July 18, 2013