Are There Assets I can Sell Even Though the IRS has Filed a Tax Lien?
A Federal Tax Lien attaches to ALL PROPERTIES. There are exceptions known as “super priorities”. Super priorities are situations in which you transfer certain assets even though the IRS has filed a tax lien against you.
Internal Revenue Code 6323(b)(2) says a buyer MUST have knowledge of a Tax Lien, at the time of the purchase, for it to interfere with the sale of specific assets, such as a car or other personal property (such as security sales). This means the IRS will not attempt to vacate the sale or force the return of assets if the buyer did not have knowledge of the Tax Lien. This would not apply to the sale of the assets for the sole purpose of preventing collections or seizure if the buyer had knowledge and was complicit in a fraudulent transfer.
Most buyers of cars or other personal assets would not have knowledge of a Federal Tx Lien because a Tax Lien is filed with your local county recorder or clerk of court. It is not noted on your car’s title, as would be the case with a bank loan.
Note, this speaks to the fact that you could sell certain assets without interference. It does not speak to the fact that the IRS may see this as a dissipation of assets and will add it to your Reasonable Collection Potential. The IRS may consider the sale of personal assets without payment of the IRS debt as a dissipation of assets. A dissipated asset is one that has been sold or transferred that is detrimental to paying the IRS. The IRS will make a determination based upon the facts and circumstances of the situation.
These rules also apply to assets you purchased without knowledge of a Tax Lien against the vendor. For example, you go to a store, which owes money to the IRS and has Tax Lien filed against it. If you buy items at a store, without knowledge of the Tax Lien, your purchase of the item would not be affected by the lien.