8.9 Purchase Money Security Interests

• Library: Enforcement of Liens and Judgments in Virginia (Virginia CLE) (2019 Ed.)

8.9 PURCHASE MONEY SECURITY INTERESTS

Section 6323 does not describe or refer to purchase money security interests. However, the IRS has consistently acknowledged that purchase money mortgages and other purchase money security interests come ahead of the federal tax lien even where the federal tax lien not only exists but has been recorded before the purchase. ⁷⁷ This position is a matter of policy and is found in Revenue Ruling 68-57. ⁷⁸ The traditional view that the tax lien attaches to after-acquired property defers to the practical view that, because the purchase money lender has allowed the taxpayer to acquire a new asset to which the federal tax lien may attach, the lender...