Section 2.20 Federal Tax Liens

• Library: Creditors' Remedies (2009 Ed. + 2014 Supp)

3. (§2.20) Federal Tax Liens

Under I.R.C. § 6323(a), the federal tax lien created by I.R.C. § 6321 "shall not be valid as against any purchaser, holder of a security interest, mechanic's lienor, or judgment lien creditor" until notice of the lien has been properly filed. Dugan v. Mo. Neon & Plastic Adver. Co., 472 F.2d 944, 948 (8^th Cir. 1973). The ultimate question as to whether a claimant takes before a federal tax lien is primarily a question of federal law. But to answer that question, it is necessary to ascertain whether a lien is created under state law. Both federal and state courts must look to state law in determining the nature of the legal interest the taxpayer had in the property and in determining whether the judgment creditor's lien attached to the property before the filing of the federal tax lien. Id. at 949.

The judgment creditor must perfect the lien against the judgment debtor's personal property by levy of execution that contemplates actual seizure of the property before a lien capable of priority over that of the United...