Ezel / IRS Rulings / 200848046

CCA 200848046: Third-party purchaser may contest lien value, not taxpayer's assessment

Number
200848046
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Civil Actions by Persons Other Than Taxpayers; Certificate of Discharge
Topics
Procedure, penalties, and administration
Code sections
§ 6325, § 7426
Ruling dated
July 18, 2008
Publicly released
November 28, 2008
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2008, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2008
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advised that IRC § 6325(b)(4) does not let a third-party purchaser of encumbered property challenge the taxpayer's underlying liability. The IRS may reconsider other collection sources and reevaluate the federal lien's value on the property. IRC § 7426(a)(4) permits judicial review of that lien-value determination. A section 7426 suit still cannot reopen the assessments supporting the lien.

Ruling snapshot

  • Question: What may a third-party purchaser challenge when seeking discharge of property from a federal tax lien?
  • Outcome: Advice given. The purchaser may obtain review of lien value, but not the taxpayer's underlying assessments.
  • Key authorities: IRC §§ 6325(b)(4) and 7426(a)(4) and (c); Rev. Rul. 2005-30.

Full text (IRS public release)

ID: CCA_2008071811442420 Number: 200848046
Office: --------------
Release Date: 11/28/2008

UILC: 7426.00-00, 6325.03-00

From: --------------------
Sent: Friday, July 18, 2008 11:44:26 AM
To: ----------------
Cc: ---------------------
Subject: RE: Revenue Ruling 2005-30

Section 6325(b)(4) does not provide a third-party purchaser of encumbered property the opportunity to challenge the liability of the taxpayer. The Service can reconsider the availability of collection from other sources and reevaluate its determination of the value of the govt's lien on the property. See the Code sections and the regulations. In addition, in any event, section 7426(a)(4) provides judicial review of the Service's determination of the value of the lien. However, suits brought under section 7426 do not provide an opportunity for reconsideration of the assessment(s) underlying the lien. See section 7426(c).

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