Did California need a nominee lien after a taxpayer quitclaimed already-liened property for no consideration?
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This page answers the general question as of 1995. Ask about yours and see what current California tax law says, with citations.
Plain-English summary
California legal staff concluded that a separate nominee lien was unnecessary after a taxpayer quitclaimed real property for no consideration because the Board's existing tax lien had already attached to it.
The Board issued a $11,957.22 determination in April 1994, the determination became final in May, and a state tax lien was recorded on August 30. The taxpayer then quitclaimed property she had owned since 1989 to a third party on September 23.
Under Government Code section 7170, staff said the recorded lien had attached to the taxpayer's county property before the transfer. The transferee therefore took the property subject to the lien even though the taxpayer no longer held record title.
Common questions
Did the quitclaim remove the Board's lien?
No.
Why was a nominee lien unnecessary?
Because the existing lien already attached to and remained on the property.
Was consideration paid for the quitclaim?
No, according to the memorandum.
Citations and references
- California Government Code section 7170 — scope of the state tax lien cited
- Notice of State Tax Lien recorded August 30, 1994 — lien the memorandum said attached before transfer
Source
- Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
- Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/170-0000-all.html
- Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/170-0066.pdf
Original ruling text
State of California
Memorandum
To:
Mr. Rick A. Slater
Supervisor of Collections
From:
Thomas J. Cooke
Staff Counsel
Subject:
REDACTED TEXT
Account No. REDACTED TEXT
Board of Equalization
Legal Division-MIC: 82
170.0066
Date: November 20, 1995
Gary Jugum has requested that I respond to your memorandum to him dated November 8, 1995, concerning the Industry District Office’s request for approval of a nominee lien. The above taxpayer became indebted to the Board for unpaid taxes on the basis of an audit. A determination for the liability was issued on April 15, 1994, for the total sum of $11,957.22. The determination became final on May 16, 1994, and on August 30, 1994, a Notice of State Tax Lien for the liability was recorded in REDACTED TEXT County. On September 23, 1994, the taxpayer quitclaimed property owned by her since 1989 to REDACTED TEXT for no consideration. The district office seeks approval of a nominee lien for this property contending that the taxpayer fraudulently transferred the property. When the Board recorded the Notice of State Tax Lien in the REDACTED TEXT County Recorder’s Office, the Board’s lien attached to all property and to all rights to property belonging to the taxpayer and located in the county. (See Government Code §7170.) The Board’s lien therefore attached to the property located at REDACTED TEXT, California, which the taxpayer had owned since 1989. When the taxpayer quitclaimed this property to REDACTED TEXT on September 23, 1994, REDACTED TEXT took the property subject to the Board’s lien. The Board’s lien presently attaches to the property even though the taxpayer no longer has record title to the property. A nominee lien is therefore not necessary. TJC/cmm
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