Final Regulation

.r i V ~ \ E Bsnd P e p l s ! i o n a
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44 Pi:
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m lieu ore hsnn o r
personal liabiliiy it a n election under
ection 6166 or 41&A (ao in cneecr prior
to itr repeal by the Economic Recovery
28 CFR Prrta 20 ~ n m1
d
Taw Act of I P a i ) w a i made. The eleaian
under reclion 6324A will not be effective
trn. twrl
unlers a11 partier having on interorl in
6pectrl Uen for Esfatt Taxer Delemad
the propefly rubject to the lien rign m
Under %tim 6166 w HMA;
agreement in which they conlent to h a
Pmctdure mnd AdmInlctntkn
mation d the lien. Regulatiom
mncerning the dection of md *
~ Q E H C tntornal
~.
Revenue Senrice,
4greement lo Iht lien may be found in
Treasury.
f 301.6324A-1.
A ~ ~ K HFinal
I:
regulations.
These regulations define the term
SUMMARY: si:'
document con taint final
'Leclion 8168 lien property" and
regulationr relating to a special lien
determine the maximum vaiue of the
under cection 6324A for estate taxer
property which the diltrict director may
ddermd under eection 8166 a t 6lBBA.
require a3 section B f l lien property.
Changes to the applicable law w m
Sectiun m.6324A-l[b)(3] indicster when
mede by the Tex Rriom Act d 1978. the
the
district director may require
Revenue Act of 1W6, snd the l k m d c
additional pmptriy to be mubject to the
Recovery Tax Act of lDB1.Tbt
lien under .eciion -A.
Section
mgulations would provide the public
#).B~zIA-t(c]
discussc8
the
p e r i d and
with the guidance needed to comply
with the Lw mnd wodd rfftcl t
h ~ priorities of r stction b3UA lien.
trlatec electing 8 rpecial lien in lmvor ot
Spsd.1 h.l*
the United Stater on property or
Ihc ~ m m i s s i m eof
r Inlarnd
racety tor deferred payment# of ertate
Revenue bar determined that thi8 anal
lax.
rufr L not mrior rule ar d e f i e d in
~ 4 n T fh e m reguletionr art genemlly
Executive Order 12291 and that 8
~Nectivef ~ esletem
r
d decedent8 d
m
.her December 31,1970. The wgulationu Reguleto~yImpact Analysis ir t h e d a m
not npuimd. Although noticc of
mcessitskd by Lht Economic Recovery
Tar Act of 1981 are eKective tor tstater
proposed rulemakiq which rolidttd
01dectdents dying efler December S1,
public eommenlc war irsucd. the
1861..
Internal Revenue Service concbded
FOR FURTHER INFORHATIOH COHTAm
when the notice wes i r ~ u r dthat the
Neil W. Zyskind of he Legisla tion mnd
regulation8 are interpretative and !hat
Regula~ionsDivision, q&te of tht Chief
the nolice end public procedun
Counsel. Internal Revenue Service. 1 1 t l
requiremen1 US 5 U.S.C.533 did not
Constitution Avenue. NW, Washington. apply. AccordingIy. B e final regulalionr
D.C.20223, At tention: CC:LR:T, (202)
do not constitute regul~tionsrubject to
5fSJ.267. not a tali-fms u U I h m Regulatory flexibility Act (5 U.S.C.
OUPPLtMEHT4RY IHFORMATlOlt:
chepter 6)fie colleclion of inrormation
Back-d
requirements contained in thia
On May 11,1903, the tgderal Regher
regulation havt been ~vbmitjtd10 U l t
published ptopvsed amendmen t i lo Ihe
Dmce 01 Management and Budgel
Eslate Tax Regulations (26 CFR Part 201
[OMB) in accordance with tht
mnd l o !he Prpcedure and
Administration Regulations (26 CFR Part requirements a1the Pepenvatk
Reduction Act o f l W These
9M) under section 6324A of the Internal
Revenue Code of 1854 (18 FR 21187). NU- requiremenlc have been approved by
OMB and have been assigned No. 1515corn men!^ were received and no public
07%.
hearisg wae requesled Furthermom, no
aubs~ao~tve
change&have been made to
DraRing tnformrtioa
the rule* contained in !he proposed
The principal author of thtrs
spgulalionr.
This Treasury decision is issued under regolatione is Neil W . Zyskind of h c
ihe aulhority contained in seclions
Legislation nnd Regulm~jonsDivision of
63,?4.4(eJand 7805 of the Intern1
the Office of Chief Counsel. Internel
Revenue Code of 1954 (WSlat. iW 68A Revenue Sewice. Howtver. personnel
Stet. 817; 20 U.S.C. B324Aim). 7805).
from olher o f i c c ~of the Internal
Rrvenue Sewice and Treasury
Surnmrry
Deperlment participeted in developin8
Section 6 3 2 4 8 permitn the executor of
the
regulations. boih D ~ matten
I
or
a decedent's estate to elect w lien on
rubstsnce ~ n style.
d
beclion 6166 properly In fevur of,l)lt
tJni1r.J S!ates

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Fwt-t.+I U*yrblr\

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l i l t of Sub]&

amPorim
Emtat* h x t u
2la cm Pbrl mz
Adminttrative practice and
prrreedm Bankruptcy. Courtfi, Crime.
Empkymtnt taxes, Estetc taxes. Excise
taxer. QR taxes, income trxas,

tnvtstigationa. Law enrorcement
I ' ~ n a i t ~ ~ ln. s i O nStatialiea~
~ ~
Taxes.
Disclosun d lnbrmation. Filing

~6

.

f ~0.1324h-1
&f+rrunder
e

---.

8 1 s or =lM*,
the txtcutor ofmn

requirement&

property.

of h i s section. This lien i a in lieu of

Acmrdi@yq
C*
are amended nr followm:

StR2-1
Ikr#nd.dl
Fprrgrapb I.!kction #).-I im
emended as to110 ws:

{a] Parag+

defined

paragraph (b)(t)

the
bonds required by ~ecUonr22M and

6185 and in lieu OF any lien under
ctclian 6321 on the
property with
re@Pct
to the Mme ellmte.
velue of

'O

thepmpertywhichIhcdi8trictdi~ctor

-

(a) ir amended by

removing the phreses "{I year with

.

(P) Ingenemf. if
whte of a decedent dying after
Demmbtr 31, Is76 make&an election
under wction 6166 or 6 1 W (a6 in effM
prior to itr m ~ bydthe Economic
R ~ C O V Cy Tax Act of 19W) to defer the
peyment or ertatc tax. the executor may
make an election under section W24A
An election under lection WZ4A will
CWPC m lien in L v o r of the United Sla!er
to attach to the tuta te'8 reelion 6180 Iitn

may q o l r t under section W24A 48
wction BfW lien properly may not
exceeed rum *e
(as defined ~ r m # r a p h
(e)llj ol
rectioo) and i h t required interest
.amount (an defined in paragraph (e)(Z)
ofthis rtction). The unpaid portion of
Q* dcfemd amaunt (plu*any unpaid
interest, edditional amount,rddition to
tax, assesmble penalty#and -lt

-----

wction
lien pmperty rhail be
determined as of Iho da t t prescribed in

W.n bn t . t m ME

Adoptloa d h t n d r n e n b to tbe

R q u L tioam

I #t,lea lind Rc~ulakirjar

Tiicsu:.ry- Pchrtiaiy ;.'
---------

4 i

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u c t i m 5 2 S l ( a ] (without regard to any
extension] lor payment of the estate tax.
Such value must take inlo ~ccouatany
encumbrance on h e property [such rs r
mortgage M a lien under ~ c t l o n
WB1(3) Addirrbnuf lien pmp%rtymoy be
quired. It. m t any time. the unp~id

portion o l the deferred amaunt and the
= g u i ~ dinterest &mounteamedl the
fair
of the wcuon 6im lien
p-fiy.
hedirlricr direclor may
requirt the addition of property to the
agreement inan amount up to ru&
exccsa. When additional property ir

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required. h e dimtrict director chat1 make
notidemandupon heagent
derignated In the egreement retting forth
~~~untotrdditionelproptrty
required. Property having the mquired
value [or other n ~ u t i l -urn1
y
to the

rewired v d u t murk bt @tddcdb the
ag,,rnent w i ~ i rn
n day. after notice
and demand Imm the district director.
the dcmrmd
~ ~ i *to, SDmpiy
, ~
wthin the m a y period rhsll &.ted
m, ,,I acceleretiw pay mant of

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~ ~ ~ \ ~ : ~ $ ~ ~ " , ~ ~ ~ f ~ ~ ~ ~ ~ ~ ~ !
ap Iicsble)" wherever lhey apperr.
,,
61htarph [b) im amnded by
removing e phrarea "[I year with
hs+p~lments
under redion ~~~1

r e s p e d to the tste t t ofa decedent dying
beforejanuPy 1.1974)" end
1psr

*d

if
appear.

mt1Cfbutab~~
to the deferred afnaunti
#hall b a lien in lavor of the Uni~ed

6lBBA(hJ(ar in effect prior lo Ltr repeal
by the Economic Remvmry Tmn M of
t M).

Stalesonthe~ction6~~lien~ropert~
[ .~ ) ~ ~ j o f P l c b s t j t r f i a n ~ ~ n ~ & t
See f JM.W24A-1 or lhio chapter
par. z A
20.2204-3 ia
paragraph (c) of f 301.8324A-t or thlr
immedio)e]y following M . m 2 Lo
meguiati~nson Pmcedurc and
chapter for mles relating lo the partial
Adminielration] lor provisions relatimad as net forlh btlow.
,,,bstitution ora bond fur [he lien -hem
to the election oiand agreemen! to the
fie
o ~ p r a p c rdesignated
~
rpccial lim for eatate tax deferred under
PART 20--fM!EKDEDI
8166 lien propeFty i, less than
8ection
or
(as in effect prior
the amount unpaid
tax plur
4
~ d r u l elor
s estatesot
to its repeal by the Economic Racovey
inttrest
d e e d e n t s dying mftw h c a r n b e r 31, is76
I)t lBB1
(c] Special nt/es.+l) Period of lien.
rpb~irltkn under W i o n 6321CL
(b) Sectfbn 6f@lien P ~ P @ ~ Y . - ( ' )
st
fielienunder reef ion 8324A
~ u f P o l e of
l I I zO-a*l[bl
mnd
generut. Section 6168 lien property
the tarlier d the I t +
~ ~ ~ z ( b ) - i n t h e c a s e o i ~ d e c e d e nconsistsoithoseinterestsinrealsnd
t
(i)Tht executor im discharged from
dying afler December 31+1976.if b e
penonal property desigtlefed in the
IiabiIity under section 2aDI: o t
executor ekctr r special lien in favor Of
mBrE,,,,t
rererredto in sedian W24A
(Li) Notice n l lien b filed In
the United States under wction 6324A.
paragraph (b)of 8 30f.6324A-1
aceordener with / 301.63fi(&t of thim
relating ( 0 special lien for csta* tnxes
of this ch npter) An interest in pmp*
SLaDICI,
deferred ~ ' ~ d ~ r s e c l i o
61
nm
s Qrf31MA
may be designated as seclion B l M lien
The section 6324A l i ~ ncontinue* until
(a, in e f T ~ c prior
t
to its repeal by the
only
to the extent such internst
the liabiliv ror the deterred hmwni i a
fion~rnicRecovery Tax A d of 1981),
the detem]
be expected to
ralisiied or becornem untnforceablt by
r u t h lien shall be treered am the
pcdd la, defined in paragraph (ej(3) of
reason of lapse 01 time. The provisio~a
furnishing 01 I bond with reaped to rhe
this wclionl. Property designated,
of f 3M.(L32Cl[clnrtlaiing lo r e l e ~ l or
t
amounl TOT which the lime tor payment
however, need not be property included
has been extended under section 8168. IT in the
=state.
lien or discharge of property, shell apply
a n election ham been made under section
(2) Maximum
of mquired
to this paragraph { c ) [ l ] .
(21 Requirement dot lien be fi!ed T h e
6324A. the execulot may nol thereafter
pmperty. T h e iair market value of the
lien impored by lection B324.4 ir not
substitute a bond pursuant to section
ptoperty ~ q u i r e by
d the district dimtor
valid against m purchaser [ a 1 defined in
in lieu o l that hen. If a bond ha#
10be designated a s section 6168 lien
been rupplied under section 2204,
property with re3pect to any estate ahall paragrm~h(I) of 1 m-m23[hb1).holder
of a cecurity interest [am defined in
howtver,the e~eculormay. by Sling r
not be greater lhan the mum oi the
paragraph (a] o l 8 3Ql.WZXhklb
proper notice of election and agrcemcnt, deferred amount ~ n !he
d rtqulted
mechanic'm lienor [IS defined in
subrlitute 4 lien u d e r seclion 6324A for Intereel amount, am these fenns
paragraph (bl of I 3[)1.WIhklL
any pad or all o l such bond. See
dchned in peragrepha (e) (11 end (2) of
judgment lien creditor (as defined in
$ 4 20.6324A-1 and 3M.6324A-I for rules Ihia setlion. However, ~ h parlit'
c
10the
paragraph (B]of 1 301.NZ3[W-I] until
relating to r fipeciel lien under seclion
agreemen( referred to in rechion 6324A
notice of the lien ir filed. Oncc lied. the
63?4A.
(c)may voluntarily designate prapertJ
Par. 3. Section 20 6324A-1 i s revised to having e fair market value [n exctea of
notice of lien rtrnslnr effective without
r e a d es set fuiih below.
that rum. She rair market value or the
being reEiled.

,

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Federal k~,gister: Vn?. +$I,
I

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Nu, fib / Tuaadey Fftbiuap
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I

!a) Pririrr'ri~r.hlthoilgh a notice o! I:zn
under ~ection&321A had been properly
filed, that lien i~
not volid[j) TO tht extent provided in mctim
&323(b)f6). relating to reel property tax
and specid rnsessment liens. regardlers
of whether ruch liens ceme hlo
arir,enm before or after the filing of
notice d Federal tax lien;
Iii) In fie
of my
property
rubject ta lien lor reprir OF
improvement. r B against r mechenie'r
lienor, whether or no1 ~ u c lien
h came
into txletence before or after the notice
of tax tien wer filed: md
(iii]As mga insl eny ~ecurityintenst
me1 forlh in reetion 0323(c)[3], relating to
teal property cunrtruction or
improvement financing sgreernentr.
regadlew whether much r e d l y
hterent csme fnlo existence betwe or
rRer filing of Ihe nolice d tax hen.
However, paragr~phlb](3)(ii].nd (iii)
of thia rection shall not mppIy to m y
mcwity interns1 &at came inlo
existence after the date of fdhg of
notice (in manner ~imilarto notice
tiled under mction 8323(r)) &at payment
or the deremd amount hat been
,

,

eccelers'ed
Or
8166Alh)
1.1 in erred prior618b'g'
to its repeal
by Ihc EEon~micRecovery Tax Act of
leal).
f d) R d ~ oredischarge ofliPn. For

konomic Recovery Tax Acl oflm).

fr) Appliwtion of definitions. Ln ths

of deficiency. Beparate deremd
emount mqulrecl interert amount, md
delemrl period mhall be determined am of
the due date at tht b t inetallrnent after
the deficiency ir prorated to
inrtallmenta undtr rectinri 6166 or
(as in
pdDr to npd by hE
-Be

Economic Recovsry Tax

PART ~ ~ + A M E N W ]

# So1.8321A-f 1-(
Pu.4. Paregraphs (a], fi)(l)[iv), fi]Ill.
and JF) of 8 gIT,.6324A-1 ere amended by
~ddingthe phrase "[as in effect prior to
Ilr repeal by Economic Recovery Tax
lmY 'Iter
each
Ihe phram
U6166* 'ppePn'

This Treasury decision is issued wdcr
the authority contained in seetionr

6324AIa) end 7805 of the Internal
Revenue Code of 1954 t90 Slat. 18BA
Slat. 817; 26 U.S.C. 6324A(a1.7805).
Approved by the Office of Management
mnd Budget under control number 1515
051m
R ~ a c o s L- 1 l G
Comm~ai-r

Appravcd:jmnuar). a 1981.
La
A.cciabnr Stcmlury of*e rmsury.
p ~ o wsplnwtw.w4
r

chaplet.

r-E#IL-

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' 13) &fermiperi&
The d e k ~ ~ e t
p e r i d i s ~ h period
c
for which khe
payment of tax t m deferred punuant to
the election under .ection 0166 or 81[aa effectpfior to its repeal by

AIer relating to releace 01h e lieu
impored by wclion W24A w dirchaqv
of the atelion 6166 lien property, ree
section 8325 and f 501 .m&1 of lhir

(c) &]initions. For gurpobcs d
~ e c t i o nDZCA of chjm wction[I 1 DeIerrcd umounr Tht dcfemd
ernounl ir the eggmgalr amount o i
estate ton deferred undtr reciion B168 w
6'166A [as in effecl prior to ib ~ p e by
d
the Economic Recovty Tax M of I ~J I
determined am o l the dale prercribed by
rectinn B i S l [a)for peymeni of h e crtrlt
tax.
(2) Required inkrest omounf T h
required inlertst mmount i~k?w
aggre ale ~ m o u nal
l lnlered payable
over ! e Lml Iour y t a n of the defehal
period. For purpose1 of computing h e
required interett amount, the Intereat
rate preecn'bed by mettion B621 in cffsct
on ihe date prrruibed by rection
6151(e) fo; payment of he crtrte tax
ahall be used for computing Iht intereal
for the bmt four yeara of the deferral
period The +percent intemrt rate
prescribed by rection 661111f) rheU apply
to the exienl pmvided in that wction.
For purposea of computing i n k s t
during deferral period* beginning rhsr
December 31, 1882, interesl ahell k
wmpouaded daily.

7 . ' 1 ~ W 4 I F.ulca an,f Rexvla\irins
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4469
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