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Chief Counsel Advice 1326015 Released June 28, 2013 Advice

CCA 1326015: A surety agreement may qualify as an obligatory disbursement agreement under section 6323

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This page covers one taxpayer's ruling from 2013, 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 2013
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 resolved one taxpayer's situation on its specific facts, 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

The Chief Counsel's Office considered whether an agreement involving a surety could receive protection under section 6323(c)(4). It said the agreement appeared to be an obligatory disbursement agreement for that provision's purposes. The memorandum did not identify any special rule for the referenced jurisdiction and stated that protection under local law generally turns on the applicable state UCC requirements for perfecting a security interest, such as filing a financing statement. It did not reach a definitive conclusion about the particular state-law requirements.

Ruling snapshot

  • Question: What local-law steps are required to protect a surety agreement against a later judgment lien under section 6323(c)(4)?
  • Outcome: Advice given
  • Key authorities: IRC § 6323(c)(4); applicable state UCC perfection rules

Full text (IRS public release)

ID: CCA-417132-13
Office: --------------
UILC: 6323.00-00
Number: 201326015
Release Date: 6/28/2013
From: ----------------------
Sent: Wednesday, April 17, 2013 2:14 PM
To: ----------------
Cc: -----------------
Subject: 6323 Question

Sorry again about the delays in this one. My reviewer concurs in my response below. We also note that,
as you are likely aware, there is an --------- local law guide addressing PR law and requirements for
perfection of security interests under the UCC. We didn't find anything unusual about PR law.

This agreement does appear to be an obligatory dispursement agreement, with respect to a surety, for
purposes of section 6323(c)(4). See the chapter in the GL School text on lien superpriorities for future
advances/commercial financing agreements and the LRG at 5.17.2.6.6.4 for a general summary
description.

I have asked around the practice group and done my own research and found nothing addressing this
provision, or any other provision of 6323, regarding what is required under PR law for protection under
local law against a subsequent judgment lien.

Regarding section 6323(c)(4) in general, there is not much out there. I didn't find any CCAs or old GL
Bulletin digest entries. Nothing. -----------directed me to some cases he turned up during a LEXIS search,
fwiw: 162 B.R. 922; 2012 U.S. Distr. LEXIS 166637; 949 F.2d 1042; AOD 1971-288. I think ---------------
has done a lot of her own research and has found her own cases. Again, nothing particular to PR law.
Regarding what is required under a particular state law, I think it is just a matter of looking to what the
state UCC requires to perfect a security interest, e.g., filing a financing statement.

Let me know if you want to discuss.

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