§6324 — Special liens for estate and gift taxes
25 cases·10 followed·2 distinguished·1 criticized·2 limited·4 overruled·6 cited—40% support
Statute Text — 26 U.S.C. §6324
Except as otherwise provided in subsection (c)—
Unless the estate tax imposed by chapter 11 is sooner paid in full, or becomes unenforceable 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 expenses of its administration, allowed by any court having jurisdiction thereof, shall be divested of such lien.
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, nonexercise, 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 transferred by a transferee of) such spouse, transferee, trustee, surviving tenant, person in possession, or beneficiary, to a purchaser or holder 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 tenant, person in possession, or beneficiary, or transferee of any such person, except any part transferred to a purchaser or a holder of a security interest.
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 deficiency 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 demand for any such deficiency, but the lien shall attach to the consideration received from such purchaser or holder of a security interest, by the heirs, legatees, devisees, or distributees.
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 liable 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 transferee of the donee) to a purchaser or holder of a security interest shall be divested of the lien imposed by this subsection and such lien, to the extent 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 security interest.
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 section 6323(b) (relating to protection for certain interests even though notice filed), shall not be valid with respect to any lien or interest described in section 6323(b).
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 expenses) to the extent that, under local law, such item has the same priority as the lien or security interest to which it relates.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §20.6324-1 Special lien for estate tax
- Treas. Reg. §Treas. Reg. §25.6324-1 Special lien for gift tax
- Treas. Reg. §Treas. Reg. §301.6324-1 Special liens for estate and gift taxes; personal liability of transferees and others
- Treas. Reg. §Treas. Reg. §301.6324-1(a) Estate tax.
- Treas. Reg. §Treas. Reg. §301.6324-1(b) Lien for gift tax.
- Treas. Reg. §Treas. Reg. §301.6324-1(c) Exceptions.
- Treas. Reg. §Treas. Reg. §301.6324-1(d) Application of lien imposed by section 6321.
- Treas. Reg. §Treas. Reg. §301.6324-1(i) §301.6324-1(i)
25 Citing Cases
The substantive requirements of section 6166 are confined to section 6166(a) and (g) .
Petitioner makes a number ofadditional arguments as to why he is not liable as a fiduciary, including that: (1) the statute oflimitations bars collection by respondent pursuant to section 6324; (2) a defense oflaches is applicable because the Government has failed to collect the estate's estate taxes for nearly 25 years and petitioner would suffer prejudice from the Government's efforts to collect the tax from him; (3) respondent should be equitably estopped from pursuing petitioner beca
Varnerin die not abuse his discretion by upholding the proposed collection action against petitioner because respondent can collect the full estate tax liability from the beneficiaries pursuant to section 6324 (a) (2) without a prior assessment against them under section 6901.
Unlike the general tax lien provided for in section 6321, which was the subject ofthe NFTL and which attaches to all property belonging to a taxpayer after assessment, demand, and nonpayment ofthe tax and which secures the payment ofall types of Federal taxes, including estate taxes, the special estate tax lien comes into being without assessment or notice and demand automatically on the date ofdeath, and it attaches to all ofthe property the value ofwhich is included in the gross estate whether
executor of the estate, is a highly respected businessman who at all times has fulfilled his tax obligations. (4) The Government already has security for the payment of the estate’s deferred taxes in the form of the statutory lien provided for under section 6324. The lien is in effect until 2010 and is a personal liability of the executor, as well as of all the other transferees of the estate. (5) The imposition of the special lien in lieu of a bond would adversely affect the estate’s ability to
The second sentence of section 6324 (b)4 provides 4SEC.
lity under section 6324(a)(2) cannot apply to her because she did not have discretionary control or authority over the Marital Trust property as of the date of decedent's death is unsupported by both the statutory language and case law interpreting section 6324. Petitioner acknowledges that she, as trustee, had bare legal title to the Marital Trust property. The liability asserted against petitioner arose while she still held the assets from which to indemnify herself. Petitioner cannot deflect
f the value ofthat property on the decedent's death. Sec. 6324(a)(2).8 The choices made by the Service in exercising its discretion regarding the collection ofthe estate tax, however, generally do not determine the ultimate "Moreover, for purposes ofsec. 6324, propertytransferred by the decedent within three years ofhis death is treated as having been included in his gross estate. Sec. 2035(c)(1). Consequently, ifrespondent is unable to collect from petitioner any estate tax deficiency determine
There is no question in the instant case that the farm property at issue was used in a qualified manner on the date of decedent's death; that it passed to petitioner, a qualified heir; that petitioner used the property in the qualified use until the cash leases were executed; and that petitioner materially participated in the qualified