Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 69-23

1969-1 C.B. 302

IRS Headnote

Purchasers and holders of liens or security interests in property includible in gross estate under section 2033 of the Code are not protected against Federal estate tax liens except as specifically provided in section 6324; G.C.M. 2663 superseded.

Full Text

Rev. Rul. 69-23 /1/

The purpose of this Revenue Ruling is to update and restate, under current statute and regulations, the position set forth in G.C.M. 2663, C.B. VII-2, 355 (1928).

The question is whether a purchaser, holder of a security interest, mechanic's lienor, or judgment lien creditor who acquires an interest in property includible in the gross estate of a decedent under section 2033 of the Internal Revenue Code of 1954 (often referred to as "probate property") is protected against the Federal estate tax lien imposed by section 6324(a)(1) of the Code in a case where the Government has not filed the notice of lien referred to in section 6323(a) of the Code.

With respect to the general tax lien imposed by section 6321 of the Code, section 6323(a) provides that such lien shall not be valid against any purchaser, holder of a security interest, mechanic's lienor, or judgment lien creditor until notice thereof has been filed on behalf of the government.

With respect to the special estate tax lien imposed by section 6324(a)(1) of the Code, no provision is made for the filing of a notice of lien. However, section 6324(a)(2) of the Code provides protection to purchasers and holders of security interests with respect to property includible in the gross estate of the decedent under sections 2034 through 2042 of the Code (often referred to as "property not subject to probate"). Further, section 6324(a)(3) of the Code protects purchasers or holders of security interests after the executor has been released from personal liability under section 2204 of the Code, and section 6324(c)(1) of the Code protects mechanic's lienors and certain other interests.

Based on the foregoing provisions of the Code, for purposes of the special estate tax lien, the protections available to purchasers, holders of security interests, mechanic's lienors, or judgment lien creditors are limited to those specifically provided for by section 6324 of the Code.

Section 301.6324-1(c) of the Regulations on Procedure and Administration provides that the general tax lien under section 6321 of the Code and the special lien under section 6324(a)(1) for the estate tax are separate and distinct from each other, and each may exist without the other being in force, or they may exist simultaneously, depending upon the facts and pertinent statutory provisions applicable to the respective liens.

Accordingly, the special estate tax lien imposed by section 6324(a)(1) of the Code is not subject to the provisions of section 6323(a) relative to the filing of notice of lien imposed by section 6321.

Therefore, a purchaser, holder of a security interest, mechanic's lienor, or a judgment lien creditor who acquires an interest in property includible in the gross estate of a decedent under section 2033 of the Code is not protected against the Federal estate tax lien imposed by section 6324(a)(1), except as such protection may be specifically provided in section 6324 of the Code.

G.C.M. 2663 is superseded, since the position set forth therein is restated under current law in this Revenue Ruling.

/1/ Prepared pursuant to Rev. Proc. 67-6, C.B. 1967-1, 576.