The federal tax collection system is founded on the concept of voluntary compliance.[1]  The United States government expects taxpayers to compute and timely pay all taxes owed.  Most taxpayers fulfill this obligation.  However, a minority refuse to comply.  Those falling within the latter category are subject to forced collection and various penalties.  This article seeks to provide practitioners with an overview of the mechanics of the federal tax system’s forced collection scheme, with a special emphasis on post-bankruptcy survival of federal tax liens.

The statutory scheme of forced collection set forth in the Internal Revenue Code (“Code”) and accompanying Treasury Regulations delegates broad powers to the IRS.  Broadly speaking, it empowers the IRS to assess a federal tax, impose a lien for the amount assessed upon all property belonging to the taxpayer, and, if the taxpayer still refuses to pay the liability, to sell the taxpayer’s property until the proceeds of the sale satisfy the obligation.

To facilitate these procedures, the IRS is given the authority to summon documents and other information, including testimony, from taxpayers and third parties.[1]  These powers may be exercised without prior judicial approval.

The collection scheme also grants taxpayers certain rights and remedies.  These rights and remedies, along with the powers of the IRS, vary according to the nature of the case.

Let’s begin with an inconvenient truth.  The days of the gentler and kinder IRS are now nothing more than a distant memory.  The IRS has put teeth into Circular 230, increased the amount of audits, and has become relentless when it comes to targeting taxpayers who have failed to pay their tax liabilities.

The IRS has several tools in its collection arsenal.  Chief among them are liens and levies.  The IRS makes frequent use of these tools.  And when it does, it does so aggressively.[2]  In fact, until 2011, the IRS was automatically filing liens when just over $ 5,000 in tax was due.

Changes to automatic lien filing did not begin to take shape until February 24, 2011, when the IRS started a new program called “fresh start.”  As a result of the enactment of that program, automatic lien filing went from $ 5,000 to $ 10,000.  In addition, the IRS offered a number of other initiatives to remove liens, and to make other taxpayer friendly changes.[3]

However, what the IRS giveth it taketh away.  No sooner did the IRS raise the automatic lien filing threshold than it ramped up its collection efforts using nominee liens and levies, including their counterparts: the alter ego, transferee, and fraudulent conveyance liens and levies.  Unfortunately, these liens and levies lack Collection Due Process (CDP) rights upon which taxpayers have come to rely.

The federal tax lien is a powerful collection tool.[4]  It has many purposes.  For example, it constitutes legal notice of a claim or interest in property, preserves the status quo among certain creditors, and establishes priority between competing claims to the property.[5]

Before a federal tax lien comes into existence, the IRS makes an assessment by recording the liability in the office of the Secretary.[6]  Notice of the assessment along with a demand for payment is sent to the taxpayer within 60 days of the assessment.[7]  If the taxpayer neglects or refuses to pay the tax despite the IRS’s demand that he do so, the amount due – including interest, penalties, and associated costs – becomes a lien in favor of the United States.[8]

The duration of the federal tax lien is limited.  Once it attaches, a valid federal tax lien encumbers the taxpayer’s property until the underlying liability is paid or becomes unenforceable due to lapse of time.[9]  Generally, this is ten years from the date of assessment.[10]  However, if the IRS brings an action to reduce a lien to judgment, it can enforce the lien after the ten-year period has expired.

A federal tax lien attaches to all property and property rights belonging to the taxpayer as of the date the lien arises, as well as all property and property rights acquired by the taxpayer after that time.[11]  When does the lien arise?  On the date of the assessment.  A federal tax lien also attaches to property held by a taxpayer and his wife as tenants by the entireties.[12]

What about property that is transferred prior to the creation of a federal tax lien?  Is such property still subject to a federal tax lien?  The short answer is “no,” deficient taxpayers may transfer their property to purchasers and creditors free of the tax lien.[13]  However, that does not mean that the IRS is just going to sit back and watch it happen.  Instead, the IRS has one or more theories at its disposal to reach property that the taxpayer has transferred to a third party or that is no longer in the taxpayer’s possession or name.  These theories include nominee, alter-ago, and transferee liability.

The scope of property and rights to property are governed by state law.  Very simply, if there is a property interest recognized under state law, the lien attaches to it.  Federal law determines the manner and extent to which the federal tax lien encumbers a taxpayer’s property interest.[14]  As previously discussed, a general tax lien attaches to all of the taxpayer’s property as of the date of assessment or acquired thereafter as long as the lien is in effect.

Do any statutory exemptions exist to soften the blow of this expansive rule that a federal tax lien attaches to all property?  Strictly speaking, “no.”  Indeed, not even the taxpayer’s principal residence is immune from a federal tax lien.[15]   However, the taxpayer’s principal residence, along with certain other types of property, is protected from levy.  For example, a principal residence may not be seized and sold under the levy provisions unless a judge or magistrate of a federal district court approves the levy.[16]

What about property transferred after a federal tax lien has attached?  Is it still subject to the lien?  Yes.  However, certain third parties are protected, unless the IRS has previously filed a Notice of Federal Tax Lien (NFTL).[17]  In some cases, third parties are protected even after the IRS has filed its Notice of Federal Tax Lien.[18]

Is the taxpayer entitled to any rights and remedies with respect to federal tax liens?  Yes, but they are very limited.  First, the IRS must serve the taxpayer with a notice of assessment and a demand for payment before a federal tax lien can arise.  Second, the taxpayer is entitled to a certificate of release of the lien in the following circumstances: (1) the liability has been satisfied; (2) the taxpayer has posted a bond for the amount due; or (3) the lien has become legally unenforceable.[19]  The certificate serves as conclusive proof that the lien has been extinguished[20] and must be issued within thirty days of the occurrence of one of these events.[21]

Finally, the taxpayer may seek relief in a quiet title action by attempting to remove the lien from the title to the property.[22]  However, challenging the validity of the underlying tax liability during such an action is prohibited.[23]  A quiet title action is limited to situations involving some defect in the collection procedure or full payment of the liability.[24]

In addition to the creation of federal tax liens, the IRS may also levy upon property, including rights to property.  However, before the IRS can do so, the taxpayer must have refused to pay within 10 days of notice and demand.[25]  In addition, the IRS must provide written notice of intent to levy at least 30 days before the actual levy.[26]

This later notice has a name.  It is called, “Notice of Intent to Levy, and Your Right to a Hearing.”  If the taxpayer requests a hearing before the IRS Office of Appeals – i.e., a Collection Due Process Hearing – then the IRS is barred from levying until the conclusion of the hearing.[27]

Post-Bankruptcy Survival of Federal Tax Liens

An issue that comes up with great frequency pertains to federal tax liens and property that has been excluded from a taxpayer’s bankruptcy estate.  As used in this context, the term “exclusion” means property that never becomes part of the taxpayer’s bankruptcy estate.  The issue can be framed as follows: “Does a federal tax lien on property that has been excluded from a taxpayer’s bankruptcy estate survive discharge of the underlying tax liability?”  Does the answer to this question depend upon whether the government has filed a valid Notice of Federal Tax Lien before the bankruptcy case commenced?

Consider the following example.  John owns a home worth $ 200,000.  The home is his primary residence and is encumbered by a first mortgage in the amount of $ 98,000.  John filed his 2007 federal tax return in a timely manner on April 15, 2008.  On August 1, 2008, the IRS mailed him a notice of deficiency for $ 50,000.  John failed to file a protest with appeals.  Nor did he file a petition to challenge the deficiency in tax court.  As a result, the IRS made an assessment for that amount on December 15, 2008.

John filed for bankruptcy protection on June 15, 2011.  Included in his scheduled debts was a liability to the IRS for $ 50,000 in unpaid income taxes for 2007.  The IRS filed a Notice of Federal Tax Lien on June 16, 2011.

John’s bankruptcy estate was valued at $ 50,000 (John’s home was excluded from the bankruptcy estate because it was his primary residence).  He subsequently received a discharge of his 2007 tax liability.

The first issue is whether the federal tax lien ever attached to John’s home?  The answer is, “yes.”  The more intriguing question is when did it arise?  The rule is that a tax lien attaches to virtually all of a taxpayer’s property as of the date of the assessment.  Because the assessment was made on December 15, 2008, a lien arose in favor of the government on December 15, 2008.

The second issue is the most critical.  It can be framed as follows: Does the lien securing John’s discharged tax liability continue to encumber his home even though it never became property of the estate?  In other words, does the home still remain subject to the lien even though it was excluded from the bankruptcy estate and the underlying tax liability was subsequently discharged in bankruptcy?

The answer, surprisingly, is yes.  The tax lien continues to encumber John’s home, notwithstanding the fact that it never became part of the estate.[28]  However, the IRS is precluded from taking any action to collect the debt as a personal liability of John.

At this point, you might be wondering how property that was excluded from a bankruptcy estate could remain subject to a lien that was not filed until after the taxpayer filed for bankruptcy.  Recall that the IRS did not file a notice of federal tax lien until June 16, 2011, one day after John filed his bankruptcy petition.  The answer to this perplexing question is that a lien on property that was excluded from a bankruptcy estate survives discharge regardless of whether or not a NFTL was filed.[29]

It is on this last point that the Tax Court distinguishes between the effect of a pre-existing lien on property that is exempt from the bankruptcy estate under 11 U.S.C. Section 522, on the one hand, and property that is excluded from the bankruptcy estate under 11 U.S.C. Section 541(c)(2), on the other hand.[30]

A lien on property that is exempt from the bankruptcy estate remains subject to the lien despite the discharge of the taxpayer’s underlying tax liability only if the Notice of Federal Tax Lien (NFTL) is filed before the bankruptcy case was commenced.[31]  On the other hand, a lien on property that is excluded from the bankruptcy estate – i.e., never became part of the estate – survives discharge regardless of whether or not a NFTL was filed.[32]  Therefore, even if the IRS had never filed a Notice of Federal Tax Lien, its lien on John’s home would nevertheless have survived discharge of the tax liability.

Let’s assume that the IRS files suit in federal court to reduce this assessment to judgment and to foreclose its federal tax lien on John’s home.  Will John lose his home?  For federal tax liens that survive discharge of the taxpayer’s underlying tax liability, the debtor is generally faced with losing his property in either a lien foreclosure action or a levy.[33]

As a preliminary matter, the IRS only resorts to enforcement collection proceedings sparingly.  As the Service has said time and time again, it “works with taxpayers that have post-bankruptcy dischargeable taxes to advise them of [its] lien interest and attempt to reach a mutually acceptable agreement.  Enforcement collection actions are infrequent and are only used as a last resort and under very specific circumstances.”[34]

However, when the IRS does resort to using the courts to enforce a tax lien, it has a reputation as being relentless.  While John is but a heartbeat away from losing his home, some last minute arguments can be made to avoid what is otherwise a draconian result.  Any such argument would be grounded in equity.  Courts have discretion to refuse foreclosure when equity dictates.[35]  Indeed, courts are less likely to make a knee-jerk response and more likely to proceed cautiously when the matter involves the sale of a person’s home.

For example, a district court held that it would be inequitable and offensive for the IRS to foreclose on land when the foreclosure would displace an innocent, unemployed, disabled woman of modest and limited means who lived there for several years while battling cancer.[36]  On the other hand, a district court allowed the IRS to foreclose on a delinquent taxpayer’s home that he held with his non-liable wife as tenants by the entirety, notwithstanding the undue hardship that the wife would face due to a forced sale.[37]

Assuming that the court rejects John’s equity arguments, is all hope lost?  In other words, is the forced sale of John’s home inevitable or are there any last-ditch efforts that can be made to salvage it?  How about negotiating an installment agreement?  Unfortunately, that option is likely to suffer the same fate as the equity arguments.

The IRS frowns upon installment agreements that allow a debtor to pay off tax.  They are deemed inappropriate.[38]  The rationale is that the debtor no longer has any personal liability for the discharged tax.[39]  An exception has been narrowly drawn for compelling circumstances when payment can be made swiftly.[40]  However, that exception does not apply under these facts.

What if the value of John’s home increases after June 15, 2011, the day that he files the bankruptcy petition?  Assume that the value of John’s home increases from $ 200,000 on June 14, 2011, the day before he files the bankruptcy petition, to $ 250,000 on December 30, 2011.  Does the government receive the benefit of that $ 50,000 post-petition appreciation in value of the property?

The answer is “no.”  The government’s claim is secured only up to the value of property to which the lien attached before the bankruptcy petition was filed.  Stated otherwise, a lien securing discharged liability does not attach to post-petition increases to the value of estate, or non-estate, property.[41]  Nor does such a lien attach to property acquired by the debtor post-petition.[42]

Theoretically, this means that the government’s claim is secured up to $ 200,000, and not $ 250,000.  However, one must not forget that John’s home is encumbered by a first mortgage.  The amount of that mortgage is $ 98,000.  Therefore, while the federal tax lien encumbers John’s residence, in reality, it does so only up to $ 102,000.  And that’s because federal tax liens are subordinate to first mortgages.

Judicial Collection Actions

Although the IRS’s administrative enforcement tools are at the heart of federal tax collection, the IRS can seek judicial assistance to enforce a tax liability through a federal lawsuit.  As a practical matter, the IRS seeks judicial assistance only when it finds its administrative procedures for collecting taxes are ineffective.

Because the IRS only employs judicial collection actions sparingly, a taxpayer is unlikely to be subject to a Section 7403 action.  For example, in 2010, the IRS filed roughly 1.1 million notices of federal tax lien and 3.6 million notices of levy on third parties.[43]  But civil actions under Section 7403 produced only 46 judicial opinions.[44]

There are two chief reasons why the IRS only resorts to judicial collection actions as a last resort.  First, as Section 7421 recognizes, a federal lawsuit to enforce a lien can be a potentially long and drawn out adversarial process.  Second, the IRS cannot, itself, bring an action in federal court to enforce the lien through foreclosure.[45]  Instead, the IRS must persuade the Department of Justice, which has its own priorities and demands on its resources, to commence the action on behalf of the United States.[46]

What is the purpose of a collection action?  Very simply, to reduce the federal tax assessment to judgment and to foreclose the tax liens on specific property.[47]  But the IRS can also request more unusual relief.  For example, it may obtain certain relief on an ex parte basis, including the authority to open, or at least be present at the opening of, a safety deposit box, and to obtain a warrant to enter property without the owner’s consent.[48]

The IRS may also attempt to set aside a conveyance as fraudulent.  Such action is taken when the IRS believes that the taxpayer transferred property prior to the federal tax lien (or levy) in order to avoid payment.[49]

State laws regarding fraudulent conveyances determine whether a transaction will be set aside for the benefit of the United States.[50]  Such laws typically require the government to prove the following: (1) that the property was transferred by an insolvent debtor, or a debtor rendered insolvent by the transfer; (2) that the recipient of the property paid insufficient consideration; and (3) that the debtor intended to defraud or evade his creditors.

If the IRS initiates judicial action, suit is brought in federal district court.  District courts have the power to issue orders, processes, and judgments for enforcement of the Code.[51]

Under Code Sec. 7402, suits may be brought to reduce tax claims to judgment.  Under Code Sec. 7403, the IRS may initiate an action to reduce a tax lien to judgment.  Typically, this type of suit is brought when there is specific property to pay all or part of the tax.

Code Sec. 7403 is most often used when the IRS needs to extend the ten-year statute of limitations for collecting assessed liabilities.  Why?  A levy’s timeliness is measured with respect to the date that it is made.  But an action under Section 7403 is timely so long as the action is commenced within the limitations period.[52]

Also, if the IRS prevails, it secures a judgment lien against the taxpayer’s property.  This judgment lien has its own additional independent and lengthy statute of limitations and also extends the life of the federal tax lien, which continues its independent existence.[53]

As part of the judicial process, federal district courts can compel any person to appear, testify, and produce books and papers.[54]  This provision is particularly important because it provides an avenue of enforcement in situations when no specific enforcement provision otherwise exists.  For example, if an individual is taxed under Code Sec. 301 on a dividend to the extent of the corporation’s earning and profits, this provision may be used to compel disclosure of the corporation’s earnings and profits.

A federal tax lien may be foreclosed against property held by a transferee, nominee or alter-ego when the taxpayer is the equitable owner of the property.  The IRS may also bring suit to enforce a levy.[55]

Returning to our hypothetical, there are still some questions that remain unanswered.  First, may John take affirmative steps to extinguish or modify the tax lien?  Yes.[56]  Such an action would take the form of an adversary proceeding to determine the validity, priority, or extent of the lien.[57]  Essentially, John would be asking the court to issue an order releasing his home from the lien.[58]  If successful, the IRS would no longer have a claim against his property.[59]  Such a release would also prevent the IRS from making a new assessment at a later time.[60]

Let’s assume that the IRS uses the courts to reduce its assessment to judgment and to foreclose its federal tax lien on John’s home.  May John challenge the merits of the underlying tax liability in federal court?  Or is it too late?  In other words, can an incorrect tax assessment be asserted as a defense to an action brought by the government to enforce its lien?  The answer is “yes, it can.”[61]

When the IRS (through DOJ) initiates an action to reduce a tax lien to judgment, it opens the assessment to judicial scrutiny in all respects.[62]  Therefore, the merits of the claim are clearly open to challenge.[63]

This comes with a few caveats that make mounting such a challenge a daunting feat.  First, the assessment of tax upon which the lien is based is presumed to be valid.  However, it is not a conclusive presumption.  Instead, it is a rebuttable presumption.  Nonetheless, challenging the correctness of a tax assessment an uphill battle.

For those of you who are new to litigation, there is what is known as a “shifting of burdens.”  What this means is that before the court will even begin to entertain arguments challenging the underlying tax liability, John must overcome some formidable obstacles.  If these obstacles prove insurmountable, then John will be barred from mounting such a challenge.

The shifting of burdens is summarized below:

1. The government has the burden of coming forward and persuading the judge that there is a tax liability. If the assessment was never challenged administratively, by filing a protest upon receipt of a 30-day letter, or judicially by filing a petition in tax court, the assessment establishes that liability. As you might expect, this will be a “piece of cake” for the government;
2. The taxpayer has the burden of persuading the judge – by a preponderance of the evidence – that the assessment was arbitrary;
   1. Good records will go far to overcome the presumption of correctness attaching to the assessment;
   3. To the extent that good records are not available, the taxpayer will be forced to rely on the credibility of witnesses who can fill in the gaps in information. The taxpayer will no doubt be a prime witness;
   5. In the absence of any records, it will become increasingly more challenging to persuade the judge that the IRS’s assessment is not as reliable as the taxpayer’s word or recollection.
3. The burden then shifts to the government to establish (a) whether a deficiency exists and (b) if so, in what amount. The government can meet this burden even if the tax liability it asserts is different than the amount initially asserted. In other words, the government merely has to establish that there was a tax liability.

Naturally, the IRS will try to put the kibosh on things before they get this far.  A twist on the facts will help illustrate the mechanics of the shifting of burdens.  Assume that instead of filing its NFTL after John filed his bankruptcy petition, the IRS filed its NFTL before.  Further, assume that after learning about the NFTL, John immediately requested a Collection Due Process (CDP) hearing.  In other words, the request for a Collection Due Process hearing was made – and subsequently heard – after the government filed its NFTL but before John filed for bankruptcy.

At the CDP hearing, John attempted to persuade the IRS to remove the notice of lien.  However, the IRS refused.  John did not obtain judicial review of that decision in Tax Court.

At that very same hearing, John disputed the merits of his tax assessment.  How is that possible?  Aren’t taxpayers prohibited from challenging the merits of a tax assessment at a CDP hearing?  This is a good time for a slight digression.  The general rule is that a taxpayer may not challenge the merits of a tax assessment at a CDP hearing.  However, there is an exception.  That exception is for taxpayers who have had no statutory opportunity to contest their underlying tax liability pre-assessment.

What does it mean to have no statutory opportunity to contest an underlying tax liability pre-assessment?  Very simply, that the taxpayer “did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such liability.”  Recall that the notice of deficiency is a taxpayer’s ticket to tax court.  To the extent that the taxpayer received a notice of deficiency, he had the right to contest his liability in tax court.  Indeed, all that was required was the filing of a petition with the tax court for a redetermination of the deficiency.

Consequently, the failure to petition the tax court upon receiving a notice of deficiency is fatal to the review of a taxpayer’s underlying tax liability at a CDP hearing.  Similarly, a taxpayer who waives his right to a notice of deficiency on Form 870 or Form 4549 will be deemed to have had a previous opportunity to contest his underlying tax liability.  Therefore, such a taxpayer will be barred from challenging the merits of his tax liability at a CDP hearing.

Assume that the reason John was permitted to dispute his underlying tax liability at the CDP hearing was because the IRS mailed his notice of deficiency to the wrong address.  As a result, he never received it.  At the CDP hearing, John’s challenge to his tax assessment suffered the same fate as his request to extinguish the tax lien.  It was denied.

What impact does this adverse ruling have on John’s attempt to challenge the merits of the tax assessment at the foreclosure hearing?  Will he be barred from mounting such a challenge in this action?  The knee-jerk answer to this question might appear to be “yes” in light of the fact that John previously had an opportunity to challenge the tax assessment and lost.  But that would be wrong.

Recall that most circuits favor the rule allowing taxpayers to challenge the merits of an assessment in an action brought by the government to reduce a tax lien to judgment.  Therefore, the fact that John already had “one bite at the apple” is meaningless.  The case will move forward.

Of course, that will not stop the IRS (through DOJ) from arguing that John should be estopped from challenging his tax liability.  In so doing, the IRS will rely on the fact that John had the opportunity to challenge his tax liability at an earlier CDP hearing and to have the merits of that liability ruled upon.  The fact that that ruling was adverse to him and that John is now sour grapes does not mean that he should get a second bite at the apple.

What fate is likely to befall John?  John will likely fail in his attempt to rebut the presumption of correctness that attached to the $ 50,000 assessment.  As a result, the judge will order that the federal tax lien be foreclosed and that his home be sold.  She will then order that the proceeds of such sale be distributed first to the costs of the sale and other priority interests, namely the first mortgage, and then to the United States.  Whatever remains will go to John.

To the extent that the home is sold to satisfy the lien, the government may bid at the sale but only up to the amount of the tax lien plus selling expenses.

 

[1] IRC § 7602.

[2] Since at least 2008, each year, the Taxpayers Advocates Report to Congress has questioned whether the automatic lien filing does more damage than good as it seriously impairs a taxpayer’s credit and the ability to get new financing. As of the 2013 report, TAS is still investigating the consequences.

[3] Most of these changes, however, applied only to relatively small dollar cases.

[4] IRC §§ 6321-6326.

[5] Id. § 6323.

[6] Code Sec. 6203.

[7] Code Sec. 6303(a).

[8] Code Sec. 6321.

[9] Code Sec. 6322.

[10] Code Sec. 6502(a)(1).

[11] See Glass City Bank v. United States, 326 US 265.

[12] See In Re Basher, E.D. Pa., 291 BR 357. See also United States v. Craft, 535 US 274.

[13] Code Sec. 6323(a). The Code specifies the formal requirements for the property filing of notice of the tax lien, rules for determining the situs of the property subject to the lien, the form and content of the notice, and, in certain circumstances, the indexing required for the notice. § 6323(f).

[14] R. Aquilino, SCt, 60-2 USTC ¶9538, 363 US 509, 80 SCt 1277; see also T.A. Gardner, CA-10, 94-2 USTC ¶50,482, 34 F3d 985. State laws that protect property from creditors do not apply to the federal tax lien. The state homestead exemption, for example,does not prevent the attachment of a federal tax lien. There are some exemptions under federal law, but these exemptions apply to levies, not to liens. See Code Sec. 6334.

[15] In Re Carlson, CA-7, 224 F.3d 716.

[16] Code Sec. 6334(e)(1)(A).

[17] See Code Sec. 6323.

[18] Code Sec. 6323(b).

[19] Code Sec. 6325(a).

[20] Code Sec. 6325(f)(1).

[21] Code Sec. 6325(a)(1).

[22] 28 U.S.C. § 2410.

[23] Falik v. United States, 343 F.2d 38 (2d Cir. 1965).

[24] Id.

[25] Code Sec. 6331(a).

[26] Code Sec. 6331(d) (1), (2). This waiting period does not apply if the Secretary makes a finding that the collection of the tax is in jeopardy (jeopardy levy) or relates to employment taxes when the taxpayer is a

“repeat offender.” See Code Sec. 6331(d)(3) and Code Sec. 6330(h).

[27] Code Sec. 6330(e).

[28] Johnson v. Home State Bank, 501 US 78. See also Deutchman v. IRS, CA-4, 99-2 USTC ¶50,852, 192 F3d 457; Cen-Pen Corp. v. Hanson, CA-4, 58 F3d 89; Isom v. United States, CA-9, 90-1 USTC ¶50,216, 901 F2d 744.

[29] See Practical Tax Professional, § 47.225.20, Post-Bankruptcy Survival of Federal Tax Lien: Notice of Federal Tax Lien Filed.

[30] See Wadleigh v. Commissioner, Dec. 58,243, 134 TC No. 14.

[31] Id.

[32] Id.

[33] See Practical Tax Professional, § 47.225.20, Post-Bankruptcy Survival of Federal Tax Lien: Notice of Federal Tax Lien Filed.

[34] See IRS Comments to Taxpayer Advocate Service, 2009 Annual Report to Congress, Vol. I, 2009 WL 5251017 (I.R.S. Misc. Dec. 31, 2009).

[35] United States v. Rodgers, 83-1 USTC ¶9374, 461 US 677.

[36] United States v. Johns, N.D. Fla., 2007-1 USTC ¶50,316.

[37] United States v. Guthery, M.D. Fla., 2009-1 USTC ¶50,349.

[38] See Practical Tax Professional, § 47.225.20, Post-Bankruptcy Survival of Federal Tax Lien: Notice of Federal Tax Lien Filed.

[39] Id.

[40] Id.

[41] United States v. Gold, CA-4, 99-2 USTC ¶50,632, 178 F3d 718; In re Braund, CA-9, 70-1 USTC ¶9237, 423 F2d 718, cert. denied sub nom. United States v. McGuigin, 400 US 823.

[42] Id.

[43] Internal Revenue Service. Data Book 2010. Table 16 (2011), available at http://www.irs.gov/pub/irs-soi/10databk.pdf; National Taxpayer Advocate, Dep’t of the Treasury, 2010 Annual Report to Congress, Executive Summary, at 43, available at http://www.irs.gov/pub/irs-pdf/p2104c.pdf.

[44] Id.

[45] IRC § 7401.

[46] Id.

[47] In an action to foreclose a federal tax lien, “all persons having liens upon or claiming any interest in the property involved [must] be made parties thereto.” § 7403(b). However, the taxpayer cannot assert the omission of this requirement to his benefit because it is intended only to benefit the party having the lien or claiming the interest.

[48] In re Gerwig, 461 F.Supp. 449, 451 (C.D. Cal. 1978).

[49] IRC §6901. Generally, when a conveyance is found under the applicable state law to have been fraudulent, it is deemed void. Therefore, the creditor can reach the property.

[50] See John Owenbey Co. v. Commissioner, 645 F.2d 540 (6th Cir. 1981); see also Commissioner v. Stern, 357 U.S. 39 (1958).

[51] Code Sec. 7402(a).

[52] Code Sec. 6502(b); Internal Revenue Manual § 5.17.4.7.

[53] 28 U.S.C. § 3201 (providing that the judgment lien is effective, unless satisfied, for 20 years and may be renewed for one additional period of 20 years by filing a notice of renewal).

[54] Code Sec. 7402(b).

[55] Code Sec. 6332.

[56] See Practical Tax Professional, § 47.225.20, Post-Bankruptcy Survival of Federal Tax Lien: Notice of Federal Tax Lien Filed.

[57] Id.

[58] Id.

[59] Id.

[60] Id.

[61] Code Sec. 7403 and 5.17.5.17.8 (12-14-2007), Validity of Assessment.

[62] United States v. O’Connor (2d Cir. 1961).

[63] United States v. Camejo, Sosa, et al. (So. Dist. Fla.).