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Massachusetts Agencies


Federal Tax and Tax Liens

26 USC 6323(a) ("Purchasers, holders of security interests, mechanic's lienors, and judgment lien creditors") provides that "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."

The term "Purchaser" is defined in the statute as "a person who, for adequate and full consideration in money or money's worth, acquires an interest (other than a lien or security interest) in property which is valid under local law against subsequent purchasers without actual notice." The "actual notice" provision does not relate to the knowledge of the purchaser, but rather actual notice of a subsequent purchaser that could undue the original purchaser's title.[1] This boils down to whether the original purchaser's deed is duly recorded before[2] the lien is recorded.

So, if no notice is recorded and the purchaser will be paying full consideration in money or money's worth, a subsequent recording of a lien would not affect the purchaser's title.

1 See the discussion in Zuroff v. First Wisconsin Trust Company, 41 Mass.App.Ct. 491 (1996).

2 Obviously, if the lien is on record when the purchaser takes title he would be bound by it.