CCA 201008039: IRS lien priority follows the recorded chain of title

Plain-English summary

Chief Counsel advised that the IRS would have priority where it filed a notice of federal tax lien against a husband before he transferred his interest in property to his wife. On those facts, the wife took the husband’s interest subject to the notice, and the IRS did not need a nominee or transferee analysis to show that the lien reached the property. A transferee lien would have been necessary only if the transfer occurred before the notice was filed.

Ruling snapshot

• Question: Does a notice of federal tax lien reach property transferred after the notice was filed?
• Outcome: Advice given
• Key authorities: IRC § 6321

Full text (IRS public release)

ID: CCA_2010012215464847 Number: 201008039
Release Date: 2/26/2010
Office: ----------------
UILC: 6321.00-00

From: ----------------------
Sent: Friday, January 22, 2010 3:47:01 PM
To: ---------------------
Cc:
Subject: FW: Lien priority question

Hi ----------sorry to take a while to get back to you on this.

If I am understanding your facts correctly, the IRS would have priority because we filed the NFTL against the husband in -------, prior to the ------- transfer of his interest to his wife. Thus, the wife took the husband's interest in the property subject to the NFTL. A transferee lien would only have been necessary if the transfer had occurred before the NFTL was filed. A transferee lien is only necessary, in other words, where a NFTL does not appear to attach to property under the normal chain of title.

Here, the NFTL would turn up through the normal chain of title because it was on file, and attached to the property, before it was transferred to the wife. Under those facts, you don't need a nominee or transferee analysis to show the NFTL reaches the property.

Hope this helps. Let me know if you would like to discuss further or if I am miscontruing your facts below.

Have a good weekend.