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The I.R.S. has an imposing armamentarium of means by which to collect unpaid taxes. They include the general tax lien, various special tax liens, administrative levy and sale, and judicial sale. There are many administrative and judicial protections for taxpayers and third parties against the overly zealous application of these and other devices. Nonetheless, the I.R.S.’s collection options are of imposing breadth and power, considerably exceeding collection options available to private creditors.
Confronted by these collection devices, those who owe taxes and are determined not to pay them sometimes resort to transferring their assets to others, typically family members, close associates, or controlled corporations or other entities. Part I of this article describes the three principal means by which the I.R.S. protects itself against or defeats such transfers. It also notes examples of the devices in Nevada and the interaction of state law and federal law as to them. Part II details an illustrative recent case applying law essential identical to Nevada law.
© 2006 Steve R. Johnson
Steve R. Johnson,
Using State Fraudulent Conveyance Law to Collect Federal Taxes, 14
Available at: http://ir.law.fsu.edu/articles/266