26 U.S.C. § 6323 — Validity and priority against certain per-

Page 3562 TITLE 26—INTERNAL REVENUE CODE § 6321 2006—Subsec. (b)(1). Pub. L. 109–432, § 407(c)(1), sub- stituted ‘‘in writing under subsection (a)(3)(B) and states the grounds for the requested hearing’’ for ‘‘under subsection (a)(3)(B)’’. Subsec. (c). Pub. L. 109–432, § 407(c)(2), substituted ‘‘(e), and (g)’’ for ‘‘and (e)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109–432, div. A, title IV, § 407(f), Dec. 20, 2006, 120 Stat. 2962, provided that: ‘‘The amendments made by this section [amending this section and sections 6330, 6702, and 7122 of this title] shall apply to submis- sions made and issues raised after the date on which the Secretary first prescribes a list under section 6702(c) of the Internal Revenue Code of 1986, as amended by subsection (a) [list prescribed Mar. 16, 2007, see I.R.S. Notice 2007–30, 2007–14, I.R.B. 883].’’ EFFECTIVE DATE Pub. L. 105–206, title III, § 3401(d), July 22, 1998, 112 Stat. 750, provided that: ‘‘The amendments made by this section [enacting this section and section 6330 of this title and amending section 7443A of this title] shall apply to collection actions initiated after the date which is 180 days after the date of the enactment of this Act [July 22, 1998].’’ PART II—LIENS Sec. 6321. Lien for taxes. 6322. Period of lien. 6323. Validity and priority against certain persons. 6324. Special liens for estate and gift taxes. 6324A. Special lien for estate tax deferred under sec- tion 6166. 6324B. Special lien for additional estate tax attrib- utable to farm, etc., valuation. 6325. Release of lien or discharge of property. 6326. Administrative appeal of liens. 6327. Cross references. Editorial Notes AMENDMENTS 1998—Pub. L. 105–206, title III, § 3401(a), July 22, 1998, 112 Stat. 747, added part heading. 1988—Pub. L. 100–647, title VI, § 6238(c), Nov. 10, 1988, 102 Stat. 3743, added item 6326 and redesignated former item 6326 as 6327. 1981—Pub. L. 97–34, title IV, § 422(e)(6)(D), Aug. 13, 1981, 95 Stat. 316, struck out ‘‘or 6166A’’ after ‘‘section 6166’’ in item 6324A. 1976—Pub. L. 94–455, title XX, §§ 2003(d)(2), 2004(f)(1), Oct. 4, 1976, 90 Stat. 1862, 1871, added items 6324A and 6324B. 1966—Pub. L. 89–719, title I, §§ 101(b)(1), 103(b), Nov. 2, 1966, 80 Stat. 1131, 1135, substituted ‘‘Validity and pri- ority against certain persons’’ for ‘‘Validity against mortgagees, pledgees, purchasers, and judgment credi- tors’’ in item 6323, and struck out ‘‘partial’’ before ‘‘dis- charge’’ in item 6325. § 6321. Lien for taxes If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in ad- dition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person. (Aug. 16, 1954, ch. 736, 68A Stat. 779.) Statutory Notes and Related Subsidiaries SHORT TITLE Pub. L. 89–719, § 1(a), Nov. 2, 1966, 80 Stat. 1125, pro- vided that: ‘‘This Act [enacting sections 3505, 7425, 7426, and 7810 of this title, amending sections 545, 6322 to 6325, 6331, 6332, 6334, 6335, 6337 to 6339, 6342, 6343, 6502, 6503, 6532, 7402, 7403, 7421, 7424, 7505, 7506, and 7809 of this title, sections 1346, 1402, and 2410 of Title 28, Judiciary and Judicial Procedure, and section 270a of former Title 40, Public Buildings, Property, and Works, redes- ignating section 7425 as 7427 of this title, and enacting provisions set out as notes under sections 6323 and 7424 of this title, and under section 1346 of Title 28] may be cited as the ‘Federal Tax Lien Act of 1966’.’’ § 6322. Period of lien Unless another date is specifically fixed by law, the lien imposed by section 6321 shall arise at the time the assessment is made and shall continue until the liability for the amount so assessed (or a judgment against the taxpayer arising out of such liability) is satisfied or be- comes unenforceable by reason of lapse of time. (Aug. 16, 1954, ch. 736, 68A Stat. 779; Pub. L. 89–719, title I, § 113(a), Nov. 2, 1966, 80 Stat. 1146.) Editorial Notes AMENDMENTS 1966—Pub. L. 89–719 inserted ‘‘(or a judgment against the taxpayer arising out of such liability)’’. Statutory Notes and Related Subsidiaries 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. § 6323. Validity and priority against certain per- sons (a) Purchasers, holders of security interests, me- chanic’s lienors, and judgment lien creditors The lien imposed by section 6321 shall not be valid as against any purchaser, holder of a secu- rity interest, mechanic’s lienor, or judgment lien creditor until notice thereof which meets the requirements of subsection (f) has been filed by the Secretary. (b) Protection for certain interests even though notice filed Even though notice of a lien imposed by sec- tion 6321 has been filed, such lien shall not be valid— (1) Securities With respect to a security (as defined in sub- section (h)(4))— (A) as against a purchaser of such security who at the time of purchase did not have ac- tual notice or knowledge of the existence of such lien; and (B) as against a holder of a security inter- est in such security who, at the time such interest came into existence, did not have actual notice or knowledge of the existence of such lien. Page 3563 TITLE 26—INTERNAL REVENUE CODE § 6323 (2) Motor vehicles With respect to a motor vehicle (as defined in subsection (h)(3)), as against a purchaser of such motor vehicle, if— (A) at the time of the purchase such pur- chaser did not have actual notice or knowl- edge of the existence of such lien, and (B) before the purchaser obtains such no- tice or knowledge, he has acquired posses- sion of such motor vehicle and has not there- after relinquished possession of such motor vehicle to the seller or his agent. (3) Personal property purchased at retail With respect to tangible personal property purchased at retail, as against a purchaser in the ordinary course of the seller’s trade or business, unless at the time of such purchase such purchaser intends such purchase to (or knows such purchase will) hinder, evade, or defeat the collection of any tax under this title. (4) Personal property purchased in casual sale With respect to household goods, personal effects, or other tangible personal property de- scribed in section 6334(a) purchased (not for re- sale) in a casual sale for less than $1,000, as against the purchaser, but only if such pur- chaser does not have actual notice or knowl- edge (A) of the existence of such lien, or (B) that this sale is one of a series of sales. (5) Personal property subject to possessory lien With respect to tangible personal property subject to a lien under local law securing the reasonable price of the repair or improvement of such property, as against a holder of such a lien, if such holder is, and has been, continu- ously in possession of such property from the time such lien arose. (6) Real property tax and special assessment liens With respect to real property, as against a holder of a lien upon such property, if such lien is entitled under local law to priority over security interests in such property which are prior in time, and such lien secures payment of— (A) a tax of general application levied by any taxing authority based upon the value of such property; (B) a special assessment imposed directly upon such property by any taxing authority, if such assessment is imposed for the pur- pose of defraying the cost of any public im- provement; or (C) charges for utilities or public services furnished to such property by the United States, a State or political subdivision thereof, or an instrumentality of any one or more of the foregoing. (7) Residential property subject to a mechan- ic’s lien for certain repairs and improve- ments With respect to real property subject to a lien for repair or improvement of a personal residence (containing not more than four dwelling units) occupied by the owner of such residence, as against a mechanic’s lienor, but only if the contract price on the contract with the owner is not more than $5,000. (8) Attorneys’ liens With respect to a judgment or other amount in settlement of a claim or of a cause of ac- tion, as against an attorney who, under local law, holds a lien upon or a contract enforcible against such judgment or amount, to the ex- tent of his reasonable compensation for ob- taining such judgment or procuring such set- tlement, except that this paragraph shall not apply to any judgment or amount in settle- ment of a claim or of a cause of action against the United States to the extent that the United States offsets such judgment or amount against any liability of the taxpayer to the United States. (9) Certain insurance contracts With respect to a life insurance, endowment, or annuity contract, as against the organiza- tion which is the insurer under such contract, at any time— (A) before such organization had actual notice or knowledge of the existence of such lien; (B) after such organization had such notice or knowledge, with respect to advances re- quired to be made automatically to main- tain such contract in force under an agree- ment entered into before such organization had such notice or knowledge; or (C) after satisfaction of a levy pursuant to section 6332(b), unless and until the Sec- retary delivers to such organization a no- tice, executed after the date of such satisfac- tion, of the existence of such lien. (10) Deposit-secured loans With respect to a savings deposit, share, or other account with an institution described in section 581 or 591, to the extent of any loan made by such institution without actual no- tice or knowledge of the existence of such lien, as against such institution, if such loan is se- cured by such account. (c) Protection for certain commercial trans- actions financing agreements, etc. (1) In general To the extent provided in this subsection, even though notice of a lien imposed by sec- tion 6321 has been filed, such lien shall not be valid with respect to a security interest which came into existence after tax lien filing but which— (A) is in qualified property covered by the terms of a written agreement entered into before tax lien filing and constituting— (i) a commercial transactions financing agreement, (ii) a real property construction or im- provement financing agreement, or (iii) an obligatory disbursement agree- ment, and (B) is protected under local law against a judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation. (2) Commercial transactions financing agree- ment For purposes of this subsection— Page 3564 TITLE 26—INTERNAL REVENUE CODE § 6323 (A) Definition The term ‘‘commercial transactions fi- nancing agreement’’ means an agreement (entered into by a person in the course of his trade or business)— (i) to make loans to the taxpayer to be secured by commercial financing security acquired by the taxpayer in the ordinary course of his trade or business, or (ii) to purchase commercial financing se- curity (other than inventory) acquired by the taxpayer in the ordinary course of his trade or business; but such an agreement shall be treated as coming within the term only to the extent that such loan or purchase is made before the 46th day after the date of tax lien filing or (if earlier) before the lender or purchaser had actual notice or knowledge of such tax lien filing. (B) Limitation on qualified property The term ‘‘qualified property’’, when used with respect to a commercial transactions financing agreement, includes only commer- cial financing security acquired by the tax- payer before the 46th day after the date of tax lien filing. (C) Commercial financing security defined The term ‘‘commercial financing security’’ means (i) paper of a kind ordinarily arising in commercial transactions, (ii) accounts re- ceivable, (iii) mortgages on real property, and (iv) inventory. (D) Purchaser treated as acquiring security interest A person who satisfies subparagraph (A) by reason of clause (ii) thereof shall be treated as having acquired a security interest in commercial financing security (3) Real property construction or improvement financing agreement For purposes of this subsection— (A) Definition The term ‘‘real property construction or improvement financing agreement’’ means an agreement to make cash disbursements to finance— (i) the construction or improvement of real property, (ii) a contract to construct or improve real property, or (iii) the raising or harvesting of a farm crop or the raising of livestock or other animals. For purposes of clause (iii), the furnishing of goods and services shall be treated as the disbursement of cash. (B) Limitation on qualified property The term ‘‘qualified property’’, when used with respect to a real property construction or improvement financing agreement, in- cludes only— (i) in the case of subparagraph (A)(i), the real property with respect to which the construction or improvement has been or is to be made, (ii) in the case of subparagraph (A)(ii), the proceeds of the contract described therein, and (iii) in the case of subparagraph (A)(iii), property subject to the lien imposed by section 6321 at the time of tax lien filing and the crop or the livestock or other ani- mals referred to in subparagraph (A)(iii). (4) Obligatory disbursement agreement For purposes of this subsection— (A) Definition The term ‘‘obligatory disbursement agree- ment’’ means an agreement (entered into by a person in the course of his trade or busi- ness) to make disbursements, but such an agreement shall be treated as coming within the term only to the extent of disbursements which are required to be made by reason of the intervention of the rights of a person other than the taxpayer. (B) Limitation on qualified property The term ‘‘qualified property’’, when used with respect to an obligatory disbursement agreement, means property subject to the lien imposed by section 6321 at the time of tax lien filing and (to the extent that the ac- quisition is directly traceable to the dis- bursements referred to in subparagraph (A)) property acquired by the taxpayer after tax lien filing. (C) Special rules for surety agreements Where the obligatory disbursement agree- ment is an agreement ensuring the perform- ance of a contract between the taxpayer and another person— (i) the term ‘‘qualified property’’ shall be treated as also including the proceeds of the contract the performance of which was ensured, and (ii) if the contract the performance of which was ensured was a contract to con- struct or improve real property, to produce goods, or to furnish services, the term ‘‘qualified property’’ shall be treated as also including any tangible personal prop- erty used by the taxpayer in the perform- ance of such ensured contract. (d) 45-day period for making disbursements Even though notice of a lien imposed by sec- tion 6321 has been filed, such lien shall not be valid with respect to a security interest which came into existence after tax lien filing by rea- son of disbursements made before the 46th day after the date of tax lien filing, or (if earlier) be- fore the person making such disbursements had actual notice or knowledge of tax lien filing, but only if such security interest— (1) is in property (A) subject, at the time of tax lien filing, to the lien imposed by section 6321, and (B) covered by the terms of a written agreement entered into before tax lien filing, and (2) is protected under local law against a judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation. (e) Priority of interest and expenses If the lien imposed by section 6321 is not valid as against a lien or security interest, the pri- Page 3565 TITLE 26—INTERNAL REVENUE CODE § 6323 ority of such lien or security interest shall ex- tend to— (1) any interest or carrying charges upon the obligation secured, (2) the reasonable charges and expenses of an indenture trustee or agent holding the secu- rity interest for the benefit of the holder of the security interest, (3) the reasonable expenses, including rea- sonable compensation for attorneys, actually incurred in collecting or enforcing the obliga- tion secured, (4) the reasonable costs of insuring, pre- serving, or repairing the property to which the lien or security interest relates, (5) the reasonable costs of insuring payment of the obligation secured, and (6) amounts paid to satisfy any lien on the property to which the lien or security interest relates, but only if the lien so satisfied is enti- tled to priority over the lien imposed by sec- tion 6321, to the extent that, under local law, any such item has the same priority as the lien or secu- rity interest to which it relates. (f) Place for filing notice; form (1) Place for filing The notice referred to in subsection (a) shall be filed— (A) Under State laws (i) Real property In the case of real property, in one office within the State (or the county, or other governmental subdivision), as designated by the laws of such State, in which the property subject to the lien is situated; and (ii) Personal property In the case of personal property, whether tangible or intangible, in one office within the State (or the county, or other govern- mental subdivision), as designated by the laws of such State, in which the property subject to the lien is situated, except that State law merely conforming to or re- enacting Federal law establishing a na- tional filing system does not constitute a second office for filing as designated by the laws of such State; or (B) With clerk of district court In the office of the clerk of the United States district court for the judicial district in which the property subject to the lien is situated, whenever the State has not by law designated one office which meets the re- quirements of subparagraph (A); or (C) With Recorder of Deeds of the District of Columbia In the office of the Recorder of Deeds of the District of Columbia, if the property subject to the lien is situated in the District of Columbia. (2) Situs of property subject to lien For purposes of paragraphs (1) and (4), prop- erty shall be deemed to be situated— (A) Real property In the case of real property, at its physical location; or (B) Personal property In the case of personal property, whether tangible or intangible, at the residence of the taxpayer at the time the notice of lien is filed. For purposes of paragraph (2)(B), the residence of a corporation or partnership shall be deemed to be the place at which the principal executive office of the business is located, and the residence of a taxpayer whose residence is without the United States shall be deemed to be in the District of Columbia. (3) Form The form and content of the notice referred to in subsection (a) shall be prescribed by the Secretary. Such notice shall be valid notwith- standing any other provision of law regarding the form or content of a notice of lien. (4) Indexing required with respect to certain real property In the case of real property, if— (A) under the laws of the State in which the real property is located, a deed is not valid as against a purchaser of the property who (at the time of purchase) does not have actual notice or knowledge of the existence of such deed unless the fact of filing of such deed has been entered and recorded in a pub- lic index at the place of filing in such a man- ner that a reasonable inspection of the index will reveal the existence of the deed, and (B) there is maintained (at the applicable office under paragraph (1)) an adequate sys- tem for the public indexing of Federal tax liens, then the notice of lien referred to in sub- section (a) shall not be treated as meeting the filing requirements under paragraph (1) unless the fact of filing is entered and recorded in the index referred to in subparagraph (B) in such a manner that a reasonable inspection of the index will reveal the existence of the lien. (5) National filing systems The filing of a notice of lien shall be gov- erned solely by this title and shall not be sub- ject to any other Federal law establishing a place or places for the filing of liens or encum- brances under a national filing system. (g) Refiling of notice For purposes of this section— (1) General rule Unless notice of lien is refiled in the manner prescribed in paragraph (2) during the required refiling period, such notice of lien shall be treated as filed on the date on which it is filed (in accordance with subsection (f)) after the expiration of such refiling period. (2) Place for filing A notice of lien refiled during the required refiling period shall be effective only— (A) if— (i) such notice of lien is refiled in the of- fice in which the prior notice of lien was filed, and (ii) in the case of real property, the fact of refiling is entered and recorded in an Page 3566 TITLE 26—INTERNAL REVENUE CODE § 6323 index to the extent required by subsection (f)(4); and (B) in any case in which, 90 days or more prior to the date of a refiling of notice of lien under subparagraph (A), the Secretary received written information (in the manner prescribed in regulations issued by the Sec- retary) concerning a change in the tax- payer’s residence, if a notice of such lien is also filed in accordance with subsection (f) in the State in which such residence is lo- cated. (3) Required refiling period In the case of any notice of lien, the term ‘‘required refiling period’’ means— (A) the one-year period ending 30 days after the expiration of 10 years after the date of the assessment of the tax, and (B) the one-year period ending with the ex- piration of 10 years after the close of the preceding required refiling period for such notice of lien. (4) Transitional rule Notwithstanding paragraph (3), if the assess- ment of the tax was made before January 1, 1962, the first required refiling period shall be the calendar year 1967. (h) Definitions For purposes of this section and section 6324— (1) Security interest The term ‘‘security interest’’ means any in- terest in property acquired by contract for the purpose of securing payment or performance of an obligation or indemnifying against loss or liability. A security interest exists at any time (A) if, at such time, the property is in ex- istence and the interest has become protected under local law against a subsequent judgment lien arising out of an unsecured obligation, and (B) to the extent that, at such time, the holder has parted with money or money’s worth. (2) Mechanic’s lienor The term ‘‘mechanic’s lienor’’ means any person who under local law has a lien on real property (or on the proceeds of a contract re- lating to real property) for services, labor, or materials furnished in connection with the construction or improvement of such prop- erty. For purposes of the preceding sentence, a person has a lien on the earliest date such lien becomes valid under local law against subse- quent purchasers without actual notice, but not before he begins to furnish the services, labor, or materials. (3) Motor vehicle The term ‘‘motor vehicle’’ means a self-pro- pelled vehicle which is registered for highway use under the laws of any State or foreign country. (4) Security The term ‘‘security’’ means any bond, deben- ture, note, or certificate or other evidence of indebtedness, issued by a corporation or a gov- ernment or political subdivision thereof, with interest coupons or in registered form, share of stock, voting trust certificate, or any cer- tificate of interest or participation in, certifi- cate of deposit or receipt for, temporary or in- terim certificate for, or warrant or right to subscribe to or purchase, any of the foregoing; negotiable instrument; or money. (5) Tax lien filing The term ‘‘tax lien filing’’ means the filing of notice (referred to in subsection (a)) of the lien imposed by section 6321. (6) Purchaser The term ‘‘purchaser’’ means a person who, for adequate and full consideration in money or money’s worth, acquires an interest (other than a lien or security interest) in property which is valid under local law against subse- quent purchasers without actual notice. In ap- plying the preceding sentence for purposes of subsection (a) of this section, and for purposes of section 6324— (A) a lease of property, (B) a written executory contract to pur- chase or lease property, (C) an option to purchase or lease property or any interest therein, or (D) an option to renew or extend a lease of property, which is not a lien or security interest shall be treated as an interest in property. (i) Special rules (1) Actual notice or knowledge For purposes of this subchapter, an organiza- tion shall be deemed for purposes of a par- ticular transaction to have actual notice or knowledge of any fact from the time such fact is brought to the attention of the individual conducting such transaction, and in any event from the time such fact would have been brought to such individual’s attention if the organization had exercised due diligence. An organization exercises due diligence if it main- tains reasonable routines for communicating significant information to the person con- ducting the transaction and there is reason- able compliance with the routine. Due dili- gence does not require an individual acting for the organization to communicate information unless such communication is part of his reg- ular duties or unless he has reason to know of the transaction and that the transaction would be materially affected by the informa- tion. (2) Subrogation Where, under local law, one person is sub- rogated to the rights of another with respect to a lien or interest, such person shall be sub- rogated to such rights for purposes of any lien imposed by section 6321 or 6324. (3) Forfeitures For purposes of this subchapter, a forfeiture under local law of property seized by a law en- forcement agency of a State, county, or other local governmental subdivision shall relate back to the time of seizure, except that this paragraph shall not apply to the extent that under local law the holder of an intervening claim or interest would have priority over the Page 3567 TITLE 26—INTERNAL REVENUE CODE § 6323 interest of the State, county, or other local governmental subdivision in the property. (4) Cost-of-living adjustment In the case of notices of liens imposed by section 6321 which are filed in any calendar year after 1998, each of the dollar amounts under paragraph (4) or (7) of subsection (b) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment deter- mined under section 1(f)(3) for the calendar year, determined by substituting ‘‘calendar year 1996’’ for ‘‘calendar year 2016’’ in sub- paragraph (A)(ii) thereof. If any amount as adjusted under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10. (j) Withdrawal of notice in certain circumstances (1) In general The Secretary may withdraw a notice of a lien filed under this section and this chapter shall be applied as if the withdrawn notice had not been filed, if the Secretary determines that— (A) the filing of such notice was premature or otherwise not in accordance with admin- istrative procedures of the Secretary, (B) the taxpayer has entered into an agree- ment under section 6159 to satisfy the tax li- ability for which the lien was imposed by means of installment payments, unless such agreement provides otherwise, (C) the withdrawal of such notice will fa- cilitate the collection of the tax liability, or (D) with the consent of the taxpayer or the National Taxpayer Advocate, the withdrawal of such notice would be in the best interests of the taxpayer (as determined by the Na- tional Taxpayer Advocate) and the United States. Any such withdrawal shall be made by filing notice at the same office as the withdrawn no- tice. A copy of such notice of withdrawal shall be provided to the taxpayer. (2) Notice to credit agencies, etc. Upon written request by the taxpayer with respect to whom a notice of a lien was with- drawn under paragraph (1), the Secretary shall promptly make reasonable efforts to notify credit reporting agencies, and any financial institution or creditor whose name and ad- dress is specified in such request, of the with- drawal of such notice. Any such request shall be in such form as the Secretary may pre- scribe. (Aug. 16, 1954, ch. 736, 68A Stat. 779; Pub. L. 88–272, title II, § 236(a), (c)(1), Feb. 26, 1964, 78 Stat. 127, 128; Pub. L. 89–493, § 17(a), July 5, 1966, 80 Stat. 266; Pub. L. 89–719, title I, § 101(a), Nov. 2, 1966, 80 Stat. 1125; Pub. L. 94–455, title XII, § 1202(h)(2), title XIX, § 1906(b)(13)(A), title XX, § 2008(c), Oct. 4, 1976, 90 Stat. 1688, 1834, 1892; Pub. L. 95–600, title VII, § 702(q)(1), (2), Nov. 6, 1978, 92 Stat. 2937, 2938; Pub. L. 99–514, title XV, § 1569(a), Oct. 22, 1986, 100 Stat. 2764; Pub. L. 100–647, title I, § 1015(s)(1), Nov. 10, 1988, 102 Stat. 3573; Pub. L. 101–508, title XI, §§ 11317(b), 11704(a)(26), Nov. 5, 1990, 104 Stat. 1388–458, 1388–519; Pub. L. 104–168, title V, § 501(a), July 30, 1996, 110 Stat. 1460; Pub. L. 105–206, title I, § 1102(d)(1)(A), title III, § 3435(a), (b), July 22, 1998, 112 Stat. 704, 760, 761; Pub. L. 115–97, title I, § 11002(d)(1)(HH), Dec. 22, 2017, 131 Stat. 2060.) INFLATION ADJUSTED ITEMS FOR CERTAIN YEARS For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title. Editorial Notes AMENDMENTS 2017—Subsec. (i)(4)(B). Pub. L. 115–97 substituted ‘‘for ‘calendar year 2016’ in subparagraph (A)(ii)’’ for ‘‘for ‘calendar year 1992’ in subparagraph (B)’’. 1998—Subsec. (b)(4). Pub. L. 105–206, § 3435(a)(1)(A), substituted ‘‘$1,000’’ for ‘‘$250’’. Subsec. (b)(7). Pub. L. 105–206, § 3435(a)(1)(B), sub- stituted ‘‘$5,000’’ for ‘‘$1,000’’. Subsec. (b)(10). Pub. L. 105–206, § 3435(b), in heading substituted ‘‘Deposit-secured loans’’ for ‘‘Passbook loans’’, and in text struck out ‘‘, evidenced by a pass- book,’’ after ‘‘other account’’ and substituted period at end for ‘‘and if such institution has been continuously in possession of such passbook from the time the loan is made.’’ Subsec. (i)(4). Pub. L. 105–206, § 3435(a)(2), added par. (4). Subsec. (j)(1)(D). Pub. L. 105–206, § 1102(d)(1)(A), sub- stituted ‘‘National Taxpayer Advocate’’ for ‘‘Taxpayer Advocate’’ in two places. 1996—Subsec. (j). Pub. L. 104–168 added subsec. (j). 1990—Subsec. (a). Pub. L. 101–508, § 11704(a)(26), sub- stituted ‘‘Purchasers’’ for ‘‘Purchases’’ in heading. Subsec. (g)(3). Pub. L. 101–508, § 11317(b), substituted ‘‘10 years’’ for ‘‘6 years’’ wherever appearing. 1988—Subsec. (f)(1)(A)(ii). Pub. L. 100–647, § 1015(s)(1)(A), inserted exception that State law merely conforming to or reenacting Federal law establishing a national filing system does not constitute a second of- fice for filing as designated by the laws of such State. Subsec. (f)(5). Pub. L. 100–647, § 1015(s)(1)(B), added par. (5). 1986—Subsec. (i)(3). Pub. L. 99–514 added par. (3). 1978—Subsec. (f)(4). Pub. L. 95–600, § 702(q)(1), in head- ing substituted ‘‘Indexing required with respect to cer- tain real property’’ for ‘‘Index’’ and in text inserted provisions relating to the validity of a deed, under the laws of the State in which the real property is located, as against a purchaser who does not have actual notice or knowledge of the existence of such deed and provi- sions relating to the maintenance of an adequate sys- tem for the public indexing of Federal tax liens. Subsec. (g)(2)(A). Pub. L. 95–600, § 702(q)(2), inserted reference to real property. 1976—Subsecs. (a), (b). Pub. L. 94–455, § 1906(b)(13)(A), struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wher- ever appearing. Subsec. (f)(2). Pub. L. 94–455, § 2008(c)(1)(B), inserted introductory reference to par. (4). Subsec. (f)(3). Pub. L. 94–455, § 1906(b)(13)(A), struck out ‘‘or his delegate’’ after ‘‘Secretary’’. Subsec. (f)(4). Pub. L. 94–455, § 2008(c)(1)(A), added par. (4). Subsec. (g)(2)(A), (B). Pub. L. 94–455, §§ 1906(b)(13)(A), 2008(c)(2), required the fact of refiling be entered and recorded in an index in accordance with subsec. (f)(4), and struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. Subsec. (i)(3). Pub. L. 94–455, § 1202(h)(2), struck out par. (3) which related to a special rule respecting dis- closure of amount of outstanding lien. 1966—Subsec. (a). Pub. L. 89–719 redesignated as sub- sec. (a) that part of former subsec. (a) which preceded pars. (1) to (3) thereof, and, in subsec. (a) as so redesig- Page 3568 TITLE 26—INTERNAL REVENUE CODE § 6323 nated, substituted holder of a security interest, me- chanic’s lienor, and judgment lien creditor for mort- gagee, pledgee, and judgment creditor, struck out ref- erence to an exception provided in subsecs. (c) and (d), and inserted reference to requirements of subsec. (f). Subsec. (a)(3). Pub. L. 89–493 substituted the Recorder of Deeds of the District of Columbia for the clerk of the United States District Court for the District of Colum- bia. Subsec. (b)(1). Pub. L. 89–719 redesignated provisions of subsec. (c)(1) as subsec. (b)(1) and substituted ‘‘holder of a security interest’’ for ‘‘mortgagee and pledgee’’ and purchaser of such security interest for purchaser of such security for any adequate and full consideration in money or money’s worth. Subsec. (b)(2). Pub. L. 89–719 redesignated provisions of subsec. (d)(1) as subsec. (b)(2) and substituted pur- chaser of such motor vehicle for purchaser of such motor vehicle for an adequate and full consideration in money or money’s worth and substituted actual notice or knowledge for notice or knowledge. Subsec. (b)(3) to (10). Pub. L. 89–719 added pars. (3) to (10). Subsecs. (c) to (e). Pub. L. 89–719 added subsecs. (c) to (e). Subsec. (f)(1). Pub. L. 89–719 redesignated provisions of former subsec. (a)(1) to (3) as subsec. (f)(1). Subsec. (f)(2). Pub. L. 89–719 added par. (2). Subsec. (f)(3). Pub. L. 89–719 redesignated provisions of former subsec. (b) as subsec. (f)(3) and substituted provisions that the form and content of the notice be prescribed by the Secretary or his delegate for provi- sions limiting the effectiveness of the notice to situa- tions in which the notice is in such form as would be valid if filed with the clerk of the United States dis- trict court when state or territory law fails to des- ignate an office for the filing of notice. Subsec. (g). Pub. L. 89–719 added subsec. (g). Subsec. (h)(1), (2). Pub. L. 89–719 added pars. (1) and (2). Subsec. (h)(3). Pub. L. 89–719 redesignated provisions of former subsec. (d)(2) as subsec. (h)(3). Subsec. (h)(4). Pub. L. 89–719 redesignated provisions of former subsec. (c)(2) as subsec. (h)(4). Subsec. (h)(5), (6). Pub. L. 89–719 added pars. (5), (6). Subsec. (i)(1), (2). Pub. L. 89–719 added pars. (1), (2). Subsec. (i)(3). Pub. L. 89–719 redesignated provisions of former subsec. (e) as subsec. (i)(3) and substituted ‘‘regulations’’ for ‘‘rules and relations’’. 1964—Subsec. (a). Pub. L. 88–272, § 236(c)(1), sub- stituted ‘‘subsections (c) and (d)’’ for ‘‘subsection (c)’’. Subsecs. (d), (e). Pub. L. 88–272, § 236(a), added subsec. (d) and redesignated former subsec. (d) as (e). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2017 AMENDMENT Amendment by Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Pub. L. 115–97, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1998 AMENDMENT Amendment by section 1102(d)(1)(A) of Pub. L. 105–206 effective July 22, 1998, see section 1102(f)(1) of Pub. L. 105–206, set out as a note under section 7803 of this title. Pub. L. 105–206, title III, § 3435(c), July 22, 1998, 112 Stat. 761, provided that: ‘‘The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [July 22, 1998].’’ EFFECTIVE DATE OF 1996 AMENDMENT Pub. L. 104–168, title V, § 501(d), July 30, 1996, 110 Stat. 1461, provided that: ‘‘The amendments made by this section [amending this section and section 6343 of this title] shall take effect on the date of the enactment of this Act [July 30, 1996].’’ EFFECTIVE DATE OF 1990 AMENDMENT Pub. L. 101–508, title XI, § 11317(c), Nov. 5, 1990, 104 Stat. 1388–458, provided that: ‘‘The amendments made by this section [amending this section and section 6502 of this title] shall apply to— ‘‘(1) taxes assessed after the date of the enactment of this Act [Nov. 5, 1990], and ‘‘(2) taxes assessed on or before such date if the pe- riod specified in section 6502 of the Internal Revenue Code of 1986 (determined without regard to the amendments made by subsection (a) [amending sec- tion 6502 of this title]) for collection of such taxes has not expired as of such date.’’ EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100–647, title I, § 1015(s)(2), Nov. 10, 1988, 102 Stat. 3573, provided that: ‘‘The amendments made by this subsection [amending this section] shall take ef- fect on the date of the enactment of this Act [Nov. 10, 1988].’’ EFFECTIVE DATE OF 1986 AMENDMENT Pub. L. 99–514, title XV, § 1569(b), Oct. 22, 1986, 100 Stat. 2764, provided that: ‘‘The amendment made by this section [amending this section] shall take effect on the date of the enactment of this Act [Oct. 22, 1986].’’ EFFECTIVE DATE OF 1978 AMENDMENT Pub. L. 95–600, title VII, § 702(q)(3), Nov. 6, 1978, 92 Stat. 2938, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘(A) The amendments made by this subsection [amending this section] shall apply with respect to liens, other security interests, and other interests in real property acquired after the date of the enactment of this Act [Nov. 6, 1978]. ‘‘(B) If, after the date of the enactment of this Act, there is a change in the application (or nonapplication) of section 6323(f)(4) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by paragraph (1)) with respect to any filing jurisdiction, such change shall apply only with respect to liens, other security interests, and other interests in real property acquired after the date of such change.’’ EFFECTIVE DATE OF 1976 AMENDMENT Amendment by section 1202(h)(2) of Pub. L. 94–455 ef- fective Jan. 1, 1977, see section 1202(i) of Pub. L. 94–455, set out as a note under section 6103 of this title. Pub. L. 94–455, title XX, § 2008(d)(3), Oct. 4, 1976, 90 Stat. 1893, provided that: ‘‘The amendment made by subsection (c) [amending this section] shall take ef- fect— ‘‘(A) in the case of liens filed before the date of the enactment of this Act [Oct. 4, 1976], on the 270th day after such date of enactment, or ‘‘(B) in the case of liens filed on or after the date of enactment of this Act [Oct. 4, 1976], on the 120th day after such date of enactment.’’ EFFECTIVE DATE OF 1966 AMENDMENTS Pub. L. 89–719, title I, § 114(a)–(c), Nov. 2, 1966, 80 Stat. 1146, 1147, provided that: ‘‘(a) GENERAL RULE.—Except as otherwise provided, the amendments made by this title [enacting sections 3505, 7425, 7426, and 7810 of this title, amending this sec- tion, sections 545, 6322, 6324, 6325, 6331, 6332, 6334, 6335, 6337, 6338, 6339, 6342, 6343, 6502, 6503, 6532, 7402, 7403, 7421, 7424, 7505, 7506, and 7809 of this title, and section 270a of former Title 40, Public Buildings, Property, and Works, redesignating former section 7425 as 7427 of this title, and enacting provisions set out as notes under this sec- tion and section 7424 of this title] shall apply after the date of enactment of this Act [Nov. 2, 1966], regardless of when a lien or a title of the United States arose or when the lien or interest of any other person was ac- quired. ‘‘(b) EXCEPTIONS.—The amendments made by this title shall not apply in any case— ‘‘(1) in which a lien or a title derived from enforce- ment of a lien held by the United States has been en- forced by a civil action or suit which has become 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’’.