Internal Revenue Code section 6321 supplies the basic statutory rule for a federal tax lien. After a tax is assessed, the government gives notice and demands payment. If the person liable neglects or refuses to pay, a lien arises in favor of the United States upon that person’s property and rights to property.
The statutory lien is not the recorded notice
The lien created by section 6321 arises by operation of law. A Notice of Federal Tax Lien is the government’s public filing. The filing affects notice and priority questions involving purchasers, secured creditors, judgment-lien creditors, and other competing interests. It is possible to have a statutory lien before seeing a public notice in county or state records.
“Property and rights to property” is broad
Federal law determines the consequences of the lien, while state law often determines what property rights the taxpayer possesses. Real estate, personal property, contract rights, accounts receivable, and later-acquired interests can require separate analysis. Ownership, nominee, alter-ego, and marital-property questions can complicate the result.
Release, withdrawal, discharge, and subordination are different
A lien problem should be defined precisely. A release generally addresses the lien itself after statutory conditions are met. Withdrawal addresses the filed notice. Discharge can remove specific property from the lien. Subordination can allow another creditor to move ahead of the federal lien. None of those remedies automatically means that every assessed tax has been eliminated.