Moving can be a hectic time. In addition to the physical act of relocating, people need to remember to do a variety of little chores such as changing over utilities, cancelling cable or internet services, changing their addresses on identification and letting relatives, friends and associates know their new contact information. Moving can be even more complicated for business owners, as they need to plan things so that their moves disrupt their business operations as little as possible. 

One thing that business owners may forget to do during a move is let the IRS know about the relocation. A case before the tax court involving a challenge to a tax lien demonstrated the importance of keeping a business' address current with the IRS.

The business owner in the case tried to challenge a tax lien the IRS filed because of unpaid business taxes. The man relocated his business in 2004 and rented a P.O. box. In 2005, the man let the P.O. box go, instructing the Post Office to forward his mail to his residence until Jan. 1, 2007. The P.O. box was the last known address the IRS had on file for the business, so when it filed a tax line against the business in May 2006 it sent notice to the P.O. box.

The Post Office forwarded the notice to the man's residence, but the man never formally informed the IRS of the address change. The man tried to say that he did not have adequate notice of the lien because it went to the P.O. box. However, the court disagreed, holding that the notice was sufficient if the IRS sent it to the last address on file - even if the taxpayer never receives it.

Taxpayers have a duty to update the IRS when they move. Business owners should take steps to avoid tax complications by filing a formal notice of address change with the IRS through a Form 8822-B. 


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