Federal Tax Liens (26 U.S.C. §§ 6321–6326)

Federal-law reference page. Legal information, not legal advice. Last verified: 2026-06-02.

Overview

The federal tax lien is the security interest the United States acquires in a delinquent taxpayer’s property when a federal tax (most often unpaid income or employment tax) is assessed and not paid after demand. It is a creature of the Internal Revenue Code — 26 U.S.C. §§ 6321–6326 — and it operates as a distinct layer on top of, and partly in conflict with, the state law that governs tax-deed sales, treasurer-sale tax-lien foreclosures, and mortgage sheriff-sale foreclosures.

Three features make it consequential for anyone acquiring foreclosed property:

1. Scope. The lien reaches “all property and rights to property, whether real or personal, belonging to” the taxpayer (§ 6321) — every interest the taxpayer holds, defined by reference to state-law property rights but classified as “property” by federal law (United States v. Craft, 535 U.S. 274 (2002)).
2. Priority. As against a purchaser, security-interest holder, mechanic’s lienor, or judgment-lien creditor, the lien is governed by the federal common-law rule “first in time, first in right,” but only becomes effective against those parties once a Notice of Federal Tax Lien (NFTL) is filed in the right office (§ 6323(a)).
3. Survival through foreclosure. A federal tax lien is not automatically wiped out by a state foreclosure sale. Whether it is divested — and the United States’ separate 120-day right of redemption — is governed by federal law (26 U.S.C. § 7425 and 28 U.S.C. § 2410), not state law. See the dedicated explainer at federal-tax-lien-redemption.

The federal lien does not override the priority of a genuinely senior, perfected state interest (a recorded mortgage or a prior-in-time local real-property-tax lien); it preempts only the narrow questions of how the federal lien is discharged and what post-sale rights the United States keeps. The practical effect at a tax or mortgage foreclosure sale is therefore a diligence problem: a buyer must determine whether an NFTL of record was junior or senior to the foreclosing interest, and whether the IRS received statutory notice of the sale.

Statutory / regulatory framework

Each subsection below quotes the retrieved primary text. Sources are listed in full at the end of the page.

§ 6321 — Creation and scope of the lien

“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 addition 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.”

(Source: 26 U.S.C. § 6321, https://www.law.cornell.edu/uscode/text/26/6321, retrieved 2026-06-02.) The lien is sometimes called the “secret” or “statutory” lien because it arises automatically — no recording is required for it to exist (recording controls priority, not existence, per § 6323 below).

§ 6322 — When the lien arises and how long it lasts

“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 becomes unenforceable by reason of lapse of time.”

(Source: 26 U.S.C. § 6322, https://www.law.cornell.edu/uscode/text/26/6322, retrieved 2026-06-02.) The collection limitations period is generally ten years from assessment (26 U.S.C. § 6502, not separately retrieved here — flagged needs_verification for the exact tolling rules), which is why the NFTL refiling window in § 6323(g) keys to a ten-year clock.

§ 6323(a) — Why filing matters (priority against four classes)

“The lien imposed by section 6321 shall not be valid as against any purchaser, holder of a security interest, mechanic’s lienor, or judgment lien creditor until notice thereof which meets the requirements of subsection (f) has been filed by the Secretary.”

(Source: 26 U.S.C. § 6323(a), https://www.law.cornell.edu/uscode/text/26/6323, retrieved 2026-06-02.) The unfiled lien still binds the taxpayer and donees/transferees who are not in one of these four protected classes; but a bona fide purchaser or recorded mortgagee who acquires its interest before the NFTL is filed takes free of the lien.

§ 6323(f) — Place of filing (the link to state recording law)

“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.”

(Source: 26 U.S.C. § 6323(f)(1), https://www.law.cornell.edu/uscode/text/26/6323, retrieved 2026-06-02.) This is the hinge between the federal and state systems: the IRS must file the NFTL in the office each state designates (typically the county recorder / register of deeds for realty, or the secretary of state for some personal property). A federal lien is only “filed” — and therefore only effective against the § 6323(a) classes — when recorded in that state-designated office.

§ 6323(g) — Refiling and loss of priority

The “required refiling period” is “the one-year period ending 30 days after the expiration of 10 years after the date of the assessment of the tax.” If the IRS does not refile within that window, the original notice “shall be treated as filed on the date on which it is filed … after the expiration of such refiling period” — i.e., the lien loses its original priority date and is treated as newly filed. (Source: 26 U.S.C. § 6323(g), https://www.law.cornell.edu/uscode/text/26/6323, retrieved 2026-06-02.)

§ 6323(b) — The super-priority list (liens that beat even a filed NFTL)

Even after a valid NFTL is filed, § 6323(b) lists categories of interests that prime the federal lien. The enumerated super-priorities include (retrieved text summarized; statutory conditions apply to each):

• (b)(1) Securities — a purchaser or holder of a security interest without actual notice/knowledge of the lien.
• (b)(2) Motor vehicles — a purchaser who takes possession without notice and does not thereafter relinquish it to the taxpayer.
• (b)(3) Personal property purchased at retail — ordinary-course retail buyers, absent intent to hinder collection.
• (b)(4) Casual sale of personal/household property — a casual sale of household goods/personal effects below the statutory dollar threshold to a buyer without notice.
• (b)(6) Real-property tax and special-assessment liens — local real-property-tax and special-assessment liens that are entitled to priority under local law.
• (b)(7) Residential-property mechanic’s lien — a mechanic’s lienor for repair/ improvement of an owner-occupied residence (four units or fewer) under a contract not exceeding the statutory amount.
• (b)(8) Attorney’s liens — an attorney’s lien for reasonable compensation from a judgment or settlement the attorney helped obtain.
• (b)(10) Passbook / deposit-secured loans — a bank with a security interest in a deposit account securing a loan made without actual notice of the lien.

(Source: 26 U.S.C. § 6323(b), https://www.law.cornell.edu/uscode/text/26/6323, retrieved 2026-06-02. The full list contains additional categories; exact current dollar thresholds in (b)(4) and (b)(7) are inflation-adjusted and flagged needs_verification for the precise 2026 figures.) For tax-sale acquirers, § 6323(b)(6) is the key provision: a local real-property-tax lien entitled to priority under state law generally outranks the federal tax lien, which is why a county tax foreclosure on a prior-in-time tax lien can extinguish the federal lien (subject to the § 7425 notice mechanics).

§ 6323(c) — Commercial financing / construction agreements (45-day rule)

Section 6323(c) protects security interests arising under a written, pre-filing “commercial transactions financing agreement,” “real property construction or improvement financing agreement,” or “obligatory disbursement agreement,” generally for a 45-day window after NFTL filing or until the lender acquires actual notice/knowledge. (Source: 26 U.S.C. § 6323(c), https://www.law.cornell.edu/uscode/text/26/6323, retrieved 2026-06-02.)

§ 6325 — Release, discharge, and subordination

This is the relief side of the statute — the mechanisms by which property is freed from the lien.

• (a) Release. The Secretary “shall issue a certificate of release of any lien … not later than 30 days after the day on which” the liability is satisfied or becomes legally unenforceable, or an accepted bond is furnished.
• (b)(1) Partial discharge — double-the-liability test. The Secretary may discharge part of the property “if the Secretary finds that the fair market value of that part of such property remaining subject to the lien is at least double the amount of the unsatisfied liability.”
• (b)(2) Discharge on payment of the U.S. interest. Discharge of a part of the property upon payment equal to the value of the United States’ interest, or a finding that that interest has no value.
• (b)(3) Substitution of sale proceeds. Discharge where the property is sold and the proceeds are held “as a fund subject to the liens and claims of the United States” in the same priority — the mechanism that lets a foreclosure or arm’s-length sale close with the federal lien attaching to the money instead of the dirt.
• (b)(4) Owner’s right to substitute a deposit/bond. Where the property owner is not the taxpayer, the Secretary “shall issue a certificate of discharge” if the owner deposits “an amount of money equal to the value of the interest of the United States.”
• (d) Subordination. The Secretary may subordinate the federal lien to another interest where (d)(1) an amount equal to the lien being subordinated is paid over, or (d)(2) the Secretary believes subordination “will ultimately … increase” the amount the United States can realize.

(Source: 26 U.S.C. § 6325, https://www.law.cornell.edu/uscode/text/26/6325, retrieved 2026-06-02.)

§ 6326 — Administrative appeal of an erroneous NFTL filing

“(a) … any person shall be allowed to appeal to the Secretary after the filing of a notice of a lien … for a release of such lien alleging an error in the filing of the notice of such lien.”

“(b) … If the Secretary determines that the filing of the notice of any lien was erroneous, the Secretary shall expeditiously (and, to the extent practicable, within 14 days after such determination) issue a certificate of release … and shall include … a statement that such filing was erroneous.”

(Source: 26 U.S.C. § 6326, https://www.law.cornell.edu/uscode/text/26/6326, retrieved 2026-06-02.) This is a narrow administrative remedy for mistaken filings (e.g., lien filed against the wrong person, or after the liability was satisfied); it is distinct from the Collection Due Process and lien-withdrawal procedures elsewhere in the Code.

Companion: § 7425 and the 26 CFR redemption rule

How a state foreclosure interacts with the federal lien is governed by 26 U.S.C. § 7425 and 28 U.S.C. § 2410, detailed on federal-tax-lien-redemption. The two operative federal rules:

• A nonjudicial sale discharges a junior federal lien only if the foreclosing party gives the IRS written notice “not less than 25 days prior to such sale” (§ 7425(c)(1)), where the NFTL was filed more than 30 days before the sale (§ 7425(b)). Without that notice, the federal lien survives the sale and rides through to the buyer. (Source: 26 U.S.C. § 7425, https://www.law.cornell.edu/uscode/text/26/7425, retrieved 2026-06-02.)
• Even when the federal lien is discharged, the United States retains a right to redeem the property “within the period of 120 days from the date of such sale or the period allowable for redemption under local law, whichever is longer” (§ 7425(d)(1)). The redemption price is fixed by 26 CFR § 301.7425-4 as the foreclosure purchase price plus interest at 6 percent per annum, plus certain post-sale senior-lien payments and excess maintenance expenses. (Sources: 26 U.S.C. § 7425(d), https://www.law.cornell.edu/uscode/text/26/7425; 26 CFR § 301.7425-4, https://www.law.cornell.edu/cfr/text/26/301.7425-4; both retrieved 2026-06-02.)

How it interacts with tax sales and foreclosure

The operational reality for an acquirer turns on priority (was the NFTL senior or junior to the foreclosing interest?) and notice (did the IRS get the § 7425 notice?).

1. Federal lien junior to a prior-in-time local tax lien (common at tax sales). A local real-property-tax lien entitled to priority under state law is a § 6323(b)(6) super-priority and is typically prior-in-time, so the federal lien is junior. A county tax-deed sale or tax-lien foreclosure can therefore extinguish the federal lien — but only if the foreclosing authority gave the IRS the 25-day notice under § 7425(c)(1). If not, the federal lien survives the sale. In either case the United States’ 120-day redemption right clouds the buyer’s title for the statutory window.

2. Federal lien junior to a mortgage (common at mortgage foreclosure). Where a recorded mortgage is senior and the NFTL was filed after it, a mortgage sheriff-sale can divest the junior federal lien — again subject to the § 7425 notice rule in a nonjudicial sale, or to naming the United States as a defendant under 28 U.S.C. § 2410 in a judicial foreclosure. Failure to join the United States in a judicial sale leaves the federal lien undisturbed (§ 7425(a)).

3. Federal lien senior. If the NFTL was filed before the foreclosing interest was perfected, the federal lien is senior; a junior foreclosure sale does not extinguish it, and the buyer takes subject to the federal lien (it must be paid or discharged to clear title).

4. Surplus / excess proceeds. Where a foreclosure generates surplus-funds, a filed federal tax lien is a claimant against the surplus in its priority position. Under the § 6325(b)(3) “substitution of proceeds” logic, the federal interest attaches to the sale fund in the same priority it held in the property — i.e., the IRS is paid out of surplus ahead of junior lienholders and the former owner, but behind senior perfected interests.

5. Diligence checklist (acquirer). Pull the chain of title and judgment/lien indices for any NFTL against the foreclosed owner; compare its recording date to the foreclosing interest; confirm the foreclosing party served the IRS the 25-day notice (nonjudicial) or joined the United States (judicial); and calendar the 120-day federal redemption window before treating title as marketable. A title insurer will ordinarily except to an undischarged federal lien and to the open redemption period.

▸ For Investors / Operators. A federal tax lien is the single most common “survives-the-sale” trap at tax and mortgage auctions. Two facts control your risk: (a) the recording date of the NFTL versus your foreclosing interest — a junior federal lien can be cut off, a senior one cannot; and (b) whether the foreclosing party gave the IRS the 25-day pre-sale notice (§ 7425(c)(1)) or named the United States in a judicial action (28 U.S.C. § 2410) — if not, the lien rides through to you. Even on a clean discharge, price in the 120-day IRS redemption right (§ 7425(d); redemption = your price + 6% + § 301.7425-4 add-ons), which clouds title for four months whether or not the IRS ever acts. Confirm the NFTL was discharged of record before you treat title as marketable.

▸ For Former Owners. A federal tax lien does not mean the IRS keeps any surplus above what you owe the IRS. If your property sells at foreclosure for more than the debt that triggered the sale, the IRS is only a claimant against the surplus-funds in its priority position — and any residue after the IRS and senior lienholders are paid belongs to you. Separately, § 6326 gives you a fast administrative appeal if the IRS filed an NFTL in error (wrong person, or after you already paid), and § 6325(b)(4) lets a non-taxpayer owner of property buy a discharge by depositing the value of the government’s interest.

Leading cases

All decisions below were retrieved and confirmed good law as of the verified date.

• United States v. Craft, 535 U.S. 274 (2002). Held (O’Connor, J., 6–3) that a husband’s interest in property held as tenants by the entirety constitutes “property” or “rights to property” under § 6321 to which a federal tax lien attaches, even though Michigan law treated the entireties estate as immune from the debts of one spouse. The rule: state law defines the taxpayer’s rights, but federal law decides whether those rights count as “property” under § 6321. Directly relevant to tax/mortgage acquirers analyzing whether a married delinquent taxpayer’s home is encumbered. (Source: https://www.law.cornell.edu/supremecourt/text/535/274, retrieved 2026-06-02.)

• United States v. National Bank of Commerce, 472 U.S. 713 (1985). Held that the § 6321 phrase “all property and rights to property” is broad enough to reach a delinquent taxpayer’s interest in a joint bank account, and that on a levy the United States “steps into the shoes” of the taxpayer, taking whatever rights the taxpayer holds, with third-party rights resolved in post-levy proceedings. Establishes the breadth of § 6321’s reach over personal property. (Source: https://www.law.cornell.edu/supremecourt/text/472/713, retrieved 2026-06-02.)

• United States v. McDermott, 507 U.S. 447 (1993). Held (Scalia, J.) that a federal tax lien filed before the taxpayer acquired after-acquired real property has priority over a private creditor’s earlier-docketed judgment lien, because under the “first in time, first in right” rule a competing state lien is “first in time” only once it is perfected/choate — and a judgment lien is not perfected as to property the debtor does not yet own. The leading modern statement of federal-tax-lien priority and the choateness doctrine. (Sources: https://www.law.cornell.edu/supremecourt/text/507/448; tile.loc.gov slip opinion https://tile.loc.gov/storage-services/service/ll/usrep/usrep507/usrep507447/usrep507447.pdf; both retrieved 2026-06-02.)

For the case that prompted Congress to enact the § 7425 notice-and-redemption regime — United States v. Brosnan, 363 U.S. 237 (1960) — see federal-tax-lien-redemption.

State interaction notes

The federal lien is uniform federal law, but its effect varies with each state’s recording, tax-priority, and foreclosure design:

• NFTL place of filing varies (§ 6323(f)). Each state designates the office where the IRS must record the NFTL against realty (county recorder/register of deeds in most states; some states route personal-property filings to the secretary of state). A federal lien that should appear in a county index but is mis-filed may not bind a later purchaser. Confirm the designated office on the relevant florida, texas, georgia, california (etc.) jurisdiction page before relying on a clean title search.

• Local-tax-lien super-priority (§ 6323(b)(6)) depends on state priority law. States that give ad valorem property-tax liens first-priority “super-lien” status (the majority) let a county tax foreclosure cut off a junior federal lien; the strength of that priority is a state-law question reflected in each jurisdiction page’s lien-survival module.

• Judicial vs. nonjudicial foreclosure changes the divestment path. In judicial foreclosure states, the federal lien is divested only by joining the United States under 28 U.S.C. § 2410 (§ 7425(a)); in nonjudicial (deed-of-trust/power-of-sale) states, divestment runs through the 25-day notice of § 7425(c)(1). A state’s classification therefore dictates the correct procedure — cross-reference the judicial/non-judicial designation on each jurisdiction page.

• Redemption-period interaction (§ 7425(d)). The federal redemption window is the longer of 120 days or the state’s own redemption period, so in long-redemption states the federal clouds on title can run well beyond four months. See right-of-redemption and the per-state redemption modules.

• Tyler overlay. Federal-tax-lien priority determines who gets paid first out of a foreclosure fund, but it does not authorize any government — federal or state — to retain surplus equity above the debt; that limit comes from tyler-v-hennepin-county, 598 U.S. 631 (2023). The federal lien is a claim on the surplus, not a license to keep it.

Cross-links

federal-tax-lien-redemption, surplus-funds, tyler-v-hennepin-county, right-of-redemption, junior-lien-purchase-risk, sheriff-sale, treasurer-sale, due-process-notice

Sources

• {statute, https://www.law.cornell.edu/uscode/text/26/6321, retrieved 2026-06-02} — 26 U.S.C. § 6321: lien “upon all property and rights to property” after neglect/refusal to pay.
• {statute, https://www.law.cornell.edu/uscode/text/26/6322, retrieved 2026-06-02} — 26 U.S.C. § 6322: lien arises at assessment; continues until satisfied or unenforceable by lapse of time.
• {statute, https://www.law.cornell.edu/uscode/text/26/6323, retrieved 2026-06-02} — 26 U.S.C. § 6323: (a) validity against purchaser/security interest/mechanic’s lienor/judgment lien creditor requires NFTL filing; (b) super-priority list; (c) 45-day commercial-financing rule; (f) place of filing (state-designated office); (g) refiling period (one-year window ending 30 days after 10 years from assessment) and loss of priority.
• {statute, https://www.law.cornell.edu/uscode/text/26/6325, retrieved 2026-06-02} — 26 U.S.C. § 6325: (a) release within 30 days; (b)(1) double-the-liability discharge; (b)(2) payment-of-interest discharge; (b)(3) substitution of proceeds; (b)(4) non-taxpayer owner’s deposit discharge; (d)(1)-(2) subordination.
• {statute, https://www.law.cornell.edu/uscode/text/26/6326, retrieved 2026-06-02} — 26 U.S.C. § 6326: (a) administrative appeal of erroneous NFTL filing; (b) 14-day expedited release on finding of error.
• {statute, https://www.law.cornell.edu/uscode/text/26/7425, retrieved 2026-06-02} — 26 U.S.C. § 7425: (a) judicial sales (US must be joined); (b) nonjudicial sales 30-day NFTL test; (c)(1) 25-day pre-sale notice; (d)(1) 120-days-or-longer United States right of redemption.
• {regulation, https://www.law.cornell.edu/cfr/text/26/301.7425-4, retrieved 2026-06-02} — 26 CFR § 301.7425-4: 120-day federal redemption period; redemption price = purchase price + 6% interest + senior-lien payments + excess maintenance expenses.
• {case, https://www.law.cornell.edu/supremecourt/text/535/274, retrieved 2026-06-02} — United States v. Craft, 535 U.S. 274 (2002): tenancy-by-entirety interest is “property/rights to property” under § 6321; federal law decides what counts as property (O’Connor, J., 6–3).
• {case, https://www.law.cornell.edu/supremecourt/text/472/713, retrieved 2026-06-02} — United States v. National Bank of Commerce, 472 U.S. 713 (1985): § 6321 reaches joint-bank-account interest; “all property and rights to property” construed broadly; US steps into taxpayer’s shoes on levy.
• {case, https://www.law.cornell.edu/supremecourt/text/507/448, retrieved 2026-06-02} — United States v. McDermott, 507 U.S. 447 (1993): federal lien filed before after-acquired property primes earlier-docketed judgment lien; “first in time, first in right” requires competing lien to be perfected/choate (Scalia, J.).
• {case, https://tile.loc.gov/storage-services/service/ll/usrep/usrep507/usrep507447/usrep507447.pdf, retrieved 2026-06-02} — United States v. McDermott, official U.S. Reports slip opinion (Library of Congress), corroborating holding above.
• {internal, edge-cases/federal-tax-lien-redemption.md, read 2026-06-02} — § 7425 / 28 U.S.C. § 2410 divestment-and-redemption mechanics and United States v. Brosnan history; each statement of law there carries its own primary citation.

Disclaimer. This page is legal information, not legal advice. It is a general summary of federal statutory and regulatory law that may be incomplete or out of date; federal tax-lien rules interact with state recording and foreclosure law that varies by jurisdiction and changes frequently. Nothing here creates an attorney-client relationship. Verify every statute, regulation, and deadline against the current primary source and consult a licensed attorney (and, for tax-collection matters, a tax professional) before acting.