Opinion ID: 577179
Heading Depth: 2
Heading Rank: 1

Heading: R.C. Section 6323(b)

Text: 34 The government, however, argues that according to I.R.C. sec. 6323(b)(8) (1988), the right of the IRS, to set-off the tax liability of a delinquent taxpayer with the amount of judgment rendered against the United States, is superior to the attorney lien, irrespective of the general rule of first in time, first in right. Again, we would be required to stand the statute on its head to agree with this position, which is not supported by the text of the statutory provisions. The purpose of section 6323(b) is to assist, with a superpriority, certain interests whose lien is actually later in time than filing of the federal tax lien. 23 A purpose of section 6323(b)(8) is to give a superpriority to attorney compensation based on a lien which becomes choate under local law, even though notice has been filed of the federal lien. The provision with respect to judgments against the United States is an exception to the provisions which come into play even though notice of a federal tax lien has been filed. By those clear provisions of the statute, its purpose is to strike the validity of a tax lien, with respect to the described judgment under local law, even though notice of the tax lien has been filed. In this case, even though the judgment was against the United States, the notice of lien had not been filed, and therefore neither the basic purpose of the statute nor its exception is invoked. Although Capuano's lien was in fact based on a judgment against the United States, it was choate under local law before the federal tax lien was filed. Hence, section 6323(b) does not come into play, the general rule of first in time, first in right applies, Capuano's attorney lien in fact primes the federal tax lien, and, consequently, Capuano has the priority interest in the $25,000 in question.