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Beware the Tax Man - Sixth Circuit Imposes Tough Standard on Creditors Searching for Federal Tax Liens

June 30, 2005

By Chris D. Molen and Shannon C. Baxter

On June 21, 2005, the U.S. Sixth Circuit Court of Appeals issued an opinion declining to subject the IRS to, when filing a notice of tax lien, the exacting standard set forth in the Uniform Commercial Code for identifying the debtor in a UCC financing statement. The Sixth Circuits holding in re Spearing Tool and Manufacturing Co. serves as a wake-up call to creditorsthey should not rely on the UCC to set the parameters for conducting federal tax lien searches.