§ 5.17 Federal Tax Liens

• Jurisdiction: Arizona

§ 5.17 - Federal Tax Liens

Pursuant to the Federal Tax Lien Act ("FTLA"), 26 U.S.C. §§ 6321 to 6327, when a taxpayer fails to pay his or her taxes, the United States is granted a lien "upon all property and rights to property, whether real or personal, belonging to such person." 26 U.S.C. § 6321. The lien attaches to causes of action, such as those based upon personal injury. See United States v. Hubbell, 323 F.2d 197, 200 (5th Cir. 1963) (concluding, in an action to quash a notice of tax levy, that a tort claim is "property" or "rights to property" subject to a federal tax lien); cf. 26 U.S.C. § 6323(b)(8) (excluding reasonable attorney's fees from a federal tax lien against a judgment or settlement of a claim).

The FTLA provides the lien arises as a matter of law "at the time the assessment is made" and...