26 U.S.C. § 6324 — Special liens for estate and gift taxes

Page 3569 TITLE 26—INTERNAL REVENUE CODE § 6324 final by judgment, sale, or agreement before the date of enactment of this Act; or ‘‘(2) in which such amendments would— ‘‘(A) impair a priority enjoyed by any person (other than the United States) holding a lien or in- terest prior to the date of enactment of this Act; ‘‘(B) operate to increase the liability of any such person; or ‘‘(C) shorten the time for bringing suit with re- spect to transactions occurring before the date of enactment of this Act. ‘‘(c) LIABILITY FOR WITHHELD TAXES.— ‘‘(1) The amendments made by section 105(a) (relat- ing to effect on third parties) [adding section 3505 of this title] shall apply only with respect to wages paid on or after January 1, 1967. ‘‘(2) The amendments made by section 105(b) (relat- ing to performance bonds of contractors for public buildings or works) [amending section 270a of former Title 40] shall apply to contracts entered into pursu- ant to invitations for bids issued after June 30, 1967.’’ Pub. L. 89–493, § 21, July 5, 1966, 80 Stat. 266, provided that: ‘‘This Act [amending this section] shall take ef- fect on the first day of the first month which is at least ninety days after the date of approval of this Act [July 5, 1966].’’ EFFECTIVE DATE OF 1964 AMENDMENT Pub. L. 88–272, title II, § 236(d), Feb. 26, 1964, 78 Stat. 128, provided that: ‘‘The amendments made by this sec- tion [amending this section and section 6324 of this title] shall apply only with respect to purchases made after the date of the enactment of this Act [Feb. 26, 1964.]’’ § 6324. Special liens for estate and gift taxes (a) Liens for estate tax Except as otherwise provided in subsection (c)— (1) Upon gross estate Unless the estate tax imposed by chapter 11 is sooner paid in full, or becomes unenforce- able by reason of lapse of time, it shall be a lien upon the gross estate of the decedent for 10 years from the date of death, except that such part of the gross estate as is used for the payment of charges against the estate and ex- penses of its administration, allowed by any court having jurisdiction thereof, shall be di- vested of such lien. (2) Liability of transferees and others If the estate tax imposed by chapter 11 is not paid when due, then the spouse, transferee, trustee (except the trustee of an employees’ trust which meets the requirements of section 401(a)), surviving tenant, person in possession of the property by reason of the exercise, non- exercise, or release of a power of appointment, or beneficiary, who receives, or has on the date of the decedent’s death, property included in the gross estate under sections 2034 to 2042, inclusive, to the extent of the value, at the time of the decedent’s death, of such property, shall be personally liable for such tax. Any part of such property transferred by (or trans- ferred by a transferee of) such spouse, trans- feree, trustee, surviving tenant, person in pos- session, or beneficiary, to a purchaser or hold- er of a security interest shall be divested of the lien provided in paragraph (1) and a like lien shall then attach to all the property of such spouse, transferee, trustee, surviving ten- ant, person in possession, or beneficiary, or transferee of any such person, except any part transferred to a purchaser or a holder of a se- curity interest. (3) Continuance after discharge of fiduciary The provisions of section 2204 (relating to discharge of fiduciary from personal liability) shall not operate as a release of any part of the gross estate from the lien for any defi- ciency that may thereafter be determined to be due, unless such part of the gross estate (or any interest therein) has been transferred to a purchaser or a holder of a security interest, in which case such part (or such interest) shall not be subject to a lien or to any claim or de- mand for any such deficiency, but the lien shall attach to the consideration received from such purchaser or holder of a security in- terest, by the heirs, legatees, devisees, or distributees. (b) Lien for gift tax Except as otherwise provided in subsection (c), unless the gift tax imposed by chapter 12 is sooner paid in full or becomes unenforceable by reason of lapse of time, such tax shall be a lien upon all gifts made during the period for which the return was filed, for 10 years from the date the gifts are made. If the tax is not paid when due, the donee of any gift shall be personally lia- ble for such tax to the extent of the value of such gift. Any part of the property comprised in the gift transferred by the donee (or by a trans- feree of the donee) to a purchaser or holder of a security interest shall be divested of the lien im- posed by this subsection and such lien, to the ex- tent of the value of such gift, shall attach to all the property (including after-acquired property) of the donee (or the transferee) except any part transferred to a purchaser or holder of a secu- rity interest. (c) Exceptions (1) The lien imposed by subsection (a) or (b) shall not be valid as against a mechanic’s lienor and, subject to the conditions provided by sec- tion 6323(b) (relating to protection for certain interests even though notice filed), shall not be valid with respect to any lien or interest de- scribed in section 6323(b). (2) If a lien imposed by subsection (a) or (b) is not valid as against a lien or security interest, the priority of such lien or security interest shall extend to any item described in section 6323(e) (relating to priority of interest and ex- penses) to the extent that, under local law, such item has the same priority as the lien or secu- rity interest to which it relates. (Aug. 16, 1954, ch. 736, 68A Stat. 780; Pub. L. 88–272, title II, § 236(b), (c)(2), Feb. 26, 1964, 78 Stat. 127, 128; Pub. L. 89–719, title I, § 102, Nov. 2, 1966, 80 Stat. 1132; Pub. L. 91–614, title I, §§ 101(d)(2), 102(d)(7), Dec. 31, 1970, 84 Stat. 1837, 1842.) Editorial Notes AMENDMENTS 1970—Subsec. (a)(3). Pub. L. 91–614, § 101(d)(2), sub- stituted ‘‘fiduciary’’ for ‘‘executor’’ in heading and text. Subsec. (b). Pub. L. 91–614, § 102(d)(7), substituted ‘‘pe- riod for which the return was filed’’ for ‘‘calendar year’’. Page 3570 TITLE 26—INTERNAL REVENUE CODE § 6324A 1966—Subsec. (a)(1). Pub. L. 89–719 inserted ‘‘, or be- comes unenforceable by reason of lapse of time,’’ after ‘‘sooner paid in full’’ and substituted ‘‘10 years from the date of death’’ for ‘‘10 years upon the gross estate of the decedent’’. Subsec. (a)(2). Pub. L. 89–719 substituted ‘‘person in possession, or beneficiary, to a purchaser or holder of a security interest’’ for ‘‘person in possession of property by reason of the exercise, nonexercise, or release of a power of appointment, or beneficiary, to a bona fide purchaser, mortgagee, or pledgee, for an adequate and full consideration in money and money’s worth’’ and ‘‘except any part transferred to a purchaser or a holder of a security interest’’ for ‘‘except any part transferred to a bona fide purchaser, mortgagee, or pledgee for an adequate and full consideration in money or money’s worth’’. Subsec. (a)(3). Pub. L. 89–719 substituted ‘‘purchaser or a holder of a security interest’’ for ‘‘bona fide pur- chaser, mortgagee, or pledgee for an adequate and full consideration in money or money’s worth’’ and ‘‘pur- chaser or holder of a security interest’’ for ‘‘purchaser, mortgagee, or pledgee’’. Subsec. (b). Pub. L. 89–719 substituted reference to ex- ception provided in subsec. (c) for reference to excep- tions provided in subsecs. (c) and (d), inserted reference to tax becoming unenforceable by reason of lapse of time, and substituted ‘‘purchaser or holder of a secu- rity interest’’ for ‘‘bona-fide purchaser, mortgagee, or pledgee, for an adequate and full consideration in money or money’s worth’’. Subsec. (c). Pub. L. 89–719 redesignated as par. (1) pro- visions formerly constituting subsec. (c), substituted ‘‘valid as against a mechanic’s lienor and, subject to the conditions provided by section 6323(b) (relating to protection for certain interests even though noticed filed), shall not be valid with respect to any lien or in- terest described in section 6323(b)’’ for ‘‘valid with re- spect to a security, as defined in section 6323(c)(2), as against any mortgagee, pledgee, or purchaser of any such security, for an adequate and full consideration in money or money’s worth, if at the time of such mort- gage, pledge, or purchase such mortgagee, pledgee, or purchaser is without notice or knowledge of the exist- ence of such lien’’, and added par. (2). Subsec. (d). Pub. L. 89–719 struck out subsec. (d) deal- ing with exceptions in the case of motor vehicles. See subsec. (c) above and reference therein to section 6323(b). 1964—Subsecs. (a), (b). Pub. L. 88–272, § 236(c)(2), in- serted ‘‘and subsection (d) (relating to purchases of motor vehicles)’’. Subsec. (d). Pub. L. 88–272, § 236(b), added subsec. (d). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1970 AMENDMENT Amendment by section 101(d)(2) of Pub. L. 91–614 ap- plicable with respect to decedents dying after Dec. 31, 1970, see section 101(j) of Pub. L. 91–614, set out as a note under section 2032 of this title. Amendment by section 102(d)(7) of Pub. L. 91–614 ap- plicable with respect to gifts made after Dec. 31, 1970, see section 102(e) of Pub. L. 91–614, set out as a note under section 2501 of this title. EFFECTIVE DATE OF 1966 AMENDMENT Amendment by Pub. L. 89–719 applicable after Nov. 2, 1966, regardless of when title or lien of United States arose or when lien or interest of another person was ac- quired, with certain exceptions, see section 114(a)–(c) of Pub. L. 89–719, set out as a note under section 6323 of this title. EFFECTIVE DATE OF 1964 AMENDMENT Amendment by Pub. L. 88–272 applicable to purchases made after Feb. 26, 1964, see section 236(d) of Pub. L. 88–272, set out as a note under section 6323 of this title. § 6324A. Special lien for estate tax deferred under section 6166 (a) General rule In the case of any estate with respect to which an election has been made under section 6166, if the executor makes an election under this sec- tion (at such time and in such manner as the Secretary shall by regulations prescribe) and files the agreement referred to in subsection (c), the deferred amount (plus any interest, addi- tional amount, addition to tax, assessable pen- alty, and costs attributable to the deferred amount) shall be a lien in favor of the United States on the section 6166 lien property. (b) Section 6166 lien property (1) In general For purposes of this section, the term ‘‘sec- tion 6166 lien property’’ means interests in real and other property to the extent such in- terests— (A) can be expected to survive the deferral period, and (B) are designated in the agreement re- ferred to in subsection (c). (2) Maximum value of required property The maximum value of the property which the Secretary may require as section 6166 lien property with respect to any estate shall be a value which is not greater than the sum of— (A) the deferred amount, and (B) the required interest amount. For purposes of the preceding sentence, the value of any property shall be determined as of the date prescribed by section 6151(a) for payment of the tax imposed by chapter 11 and shall be determined by taking into account any encumbrance such as a lien under section 6324B. (3) Partial substitution of bond for lien If the value required as section 6166 lien property pursuant to paragraph (2) exceeds the value of the interests in property covered by the agreement referred to in subsection (c), the Secretary may accept bond in an amount equal to such excess conditioned on the pay- ment of the amount extended in accordance with the terms of such extension. (c) Agreement The agreement referred to in this subsection is a written agreement signed by each person in being who has an interest (whether or not in possession) in any property designated in such agreement— (1) consenting to the creation of the lien under this section with respect to such prop- erty, and (2) designating a responsible person who shall be the agent for the beneficiaries of the estate and for the persons who have consented to the creation of the lien in dealings with the Secretary on matters arising under section 6166 or this section. (d) Special rules (1) Requirement that lien be filed The lien imposed by this section shall not be valid as against any purchaser, holder of a se-