Code of Federal Regulations · Section
§ 301.6323(e)-1 — (e)-1 Priority Of Interest And Expenses
26 C.F.R. § 301.6323(e)-1
(a) In general. If the lien imposed by section 6321 is not valid as against another lien or security interest, the priority of the other lien or security interest also extends to each of the following items to the extent that under local law the item has the same priority as the lien or security interest to which it relates:
(1) Any interest or carrying charges (including finance, service, and similar charges) upon the obligation secured,
(2) The reasonable charges and expenses of an indenture trustee (including, for example, the trustee under a deed of trust) or agent holding the security interest for the benefit of the holder of the security interest,
(3) The reasonable expenses, including reasonable compensation for attorneys, actually incurred in collecting or enforcing the obligation secured,
(4) The reasonable costs of insuring, preserving, or repairing the property to which the lien or security interest relates,
(5) The reasonable costs of insuring payment of the obligation secured (including amounts paid by the holder of the security interest for mortgage insurance, such as that issued by the Federal Housing Administration), and
(6) Amounts paid to satisfy any lien on the property to which the lien or security interest relates, but only if the lien so satisfied is entitled to priority over the lien imposed by section 6321.
(b) Collection expenses. The reasonable expenses described in paragraph (a)(3) of this section include expenditures incurred by the protected holder of the lien or security interest to establish the priority of his interest or to collect, by foreclosure or otherwise, the amount due him from the property subject to his lien. Accordingly, the amount of the encumbrance which is protected is increased by the amounts so expended by the holder of the security interest.
(c) Costs of insuring, preserving, etc. The reasonable costs of insuring, preserving, or repairing described in paragraph (a)(4) of this section include expenditures by the holder of a security interest for fire and casualty insurance on the property subject to the security interest and amounts paid by the holder of the lien or security interest to repair the property. Such reasonable costs also include the amounts paid by the holder of the lien or security interest in a leasehold to the lessor of the leasehold to preseve the leasehold subject to the lien or security interest. Accordingly, the amount of the lien or security interest which is protected is increased by the amounts so expended by the holder of the lien or security interest.
(d) Satisfaction of liens. The amounts described in paragraph (a)(6) of this section include expenditures incurred by the protected holder of a lien or security interest to discharge a statutory lien for State sales taxes on the property subject to his lien or security interest if both his lien or security interest and the sales tax lien have priority over a Federal tax lien. Accordingly, the amount of the lien or security interest is increased by the amounts so expended by the holder of the lien or security interest even though under local law the holder of the lien or security interest is not subrogated to the rights of the holder of the State sales tax lien. However, if the holder of the lien or security interest is subrogated, within the meaning of paragraph (b) of § 301.6323(i)-1, to the rights of the holder of the sales tax lien, he will also be entitled to any additional protection afforded by section 6323(i)(2).
Authorizing Statute
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Confidentiality and disclosure of returns and return information26 U.S.C. § 6103
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Restrictions applicable to deficiencies; petition to Tax Court26 U.S.C. § 6213
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Signing of returns and other documents26 U.S.C. § 6061
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Assessment, collection, and payment26 U.S.C. § 6232
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Period of limitations on making adjustments26 U.S.C. § 6235
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Validity and priority against certain persons26 U.S.C. § 6323
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Definitions26 U.S.C. § 7701
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Partner’s return must be consistent with partnership return26 U.S.C. § 6222
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Alternative to payment of imputed underpayment by partnership26 U.S.C. § 6226
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Notice of qualification as executor or receiver26 U.S.C. § 6036
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Partners bound by actions of partnership26 U.S.C. § 6223
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Abatements26 U.S.C. § 6404
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Commissioner of Internal Revenue; other officials26 U.S.C. § 7803
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Extension of time for filing returns26 U.S.C. § 6081
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Treaty-based return positions26 U.S.C. § 6114
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Timely mailing treated as timely filing and paying26 U.S.C. § 7502
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Interest and penalties26 U.S.C. § 6233
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Certified professional employer organizations26 U.S.C. § 7705
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Accelerated cost recovery system26 U.S.C. § 168
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General requirement of return, statement, or list26 U.S.C. § 6011
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Disclosure of reportable transactions26 U.S.C. § 6111
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Rules and regulations26 U.S.C. § 7805
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Persons required to make returns of income26 U.S.C. § 6012
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Return of S corporation26 U.S.C. § 6037
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Reimbursement to State and local law enforcement agencies26 U.S.C. § 7624
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Determination at partnership level26 U.S.C. § 6221
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Partnership adjustment by Secretary26 U.S.C. § 6225
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Authority to release levy and return property26 U.S.C. § 6343
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Disclosure or use of information by preparers of returns26 U.S.C. § 7216
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Departmental regulations5 U.S.C. § 301
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Tax imposed26 U.S.C. § 1
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Notice of proceedings and adjustment26 U.S.C. § 6231
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Payment of tax by commercially acceptable means26 U.S.C. § 6311
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Sale of seized property26 U.S.C. § 6335
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Procedural requirements26 U.S.C. § 6751
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Low-income housing credit26 U.S.C. § 42
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Special rules26 U.S.C. § 1474
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Returns by exempt organizations26 U.S.C. § 6033
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Definitions and special rules26 U.S.C. § 6241
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Administrative appeal of liens26 U.S.C. § 6326
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Expenses of detection of underpayments and fraud, etc.26 U.S.C. § 7623
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Information concerning resident status26 U.S.C. § 6039E
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Identifying numbers26 U.S.C. § 6109
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Administrative adjustment request by partnership26 U.S.C. § 6227
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Authority to make credits or refunds26 U.S.C. § 6402
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Judicial review of partnership adjustment26 U.S.C. § 6234
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Failure to file notice of redetermination of foreign tax26 U.S.C. § 6689
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Income from discharge of indebtedness26 U.S.C. § 108