State Tax Liens Became Choate When Tax Returns Were Processed, Not When Filed by The Taxpayer: Minnesota Department of Revenue v. United States

In Minnesota Department of Revenue v. US (1999), the 8th Circuit held that a federal tax lien had priority over a Minnesota tax lien, because the state lien did not become choate until the tax return was processed by the state, which occurred after the federal tax assessment. Reversing the District...

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Bibliographic Details
Published in:The Tax lawyer 2000-01, Vol.53 (2), p.519-526
Main Author: Acklin, Kevin B.
Format: Article
Language:English
Subjects:
Federal circuit courts
Federal court decisions
Federal district courts
Federal law
Federal taxes
Property taxes
State court decisions
State taxes
Supreme Court decisions
Tax assessments
Tax liens
Tax returns
Taxes
Taxpaying
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Summary:In Minnesota Department of Revenue v. US (1999), the 8th Circuit held that a federal tax lien had priority over a Minnesota tax lien, because the state lien did not become choate until the tax return was processed by the state, which occurred after the federal tax assessment. Reversing the District Court, the 8th Circuit determined that "mere receipt of a tax return is insufficient to establish a lien that is capable of taking priority over a federal lien." Thus, under federal law, the federal tax lien had priority because it was perfected before the state tax lien, which did not become choate until the state processed the tax return. Implicitly approving the judgement of the 8th Circuit, the Supreme Court recently denied certiorari.
ISSN:0040-005X
2329-6089