Virginia v. Sebelius
Mark.Scarberry at pepperdine.edu
Wed Dec 15 22:29:24 PST 2010
It's been a while since I've taught the Federal Tax Lien Act. I also have to say I haven't read very many of the posts on this topic. Nevertheless (at the risk of repeating what others have said), it is clear that 26 USC § 6323(a) would protect purchasers (and lenders who take collateral) against a tax lien where no notice of tax lien has been filed. So I think Doug is right about this. But you do have to look at the somewhat detailed definition of "purchaser" in § 6323(h)(6).
It might also be noted that under many loan agreements it is an event of default for a debtor to allow a tax lien to exist on the debtor's property. I don't believe a notice of tax lien needs to be filed for such a default to occur. For sole proprietorships this could give lenders an excuse to call their loans, if the lender somehow learns of the failure to pay the penalty.
And in the Slate piece that I believe Kermit gave us the URL for (http://www.slate.com/id/2250098), the IRS Commissioner is quoted as saying that the IRS can set off the health care penalty against tax refunds. Lots of people get tax refunds and thus will find that the penalty is quite enforceable against them.
With best wishes to all members of the list for a joyous holiday season,
Mark S. Scarberry
Pepperdine Univ. School of Law
From: conlawprof-bounces at lists.ucla.edu [conlawprof-bounces at lists.ucla.edu] On Behalf Of Douglas Laycock [dlaycock at virginia.edu]
Sent: Wednesday, December 15, 2010 2:31 PM
To: Ilya Somin; Douglas Laycock
Cc: CONLAWPROFS professors
Subject: Re: Virginia v. Sebelius
Unless they've recently amended the Tax Lien Act (§6321 et seq.) in a way that would be inconsistent with four centuries of law on secret liens, the property in Ilya's hypothetical would pass free of the lien, and the lien would attach to the proceeds in the seller's hands.
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