[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6324A-1]

[Page 260-261]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                               Collection
 
Sec. 301.6324A-1  Election of and agreement to special lien for estate 
tax deferred under section 6166 or 6166A.

    (a) Election of lien. If payment of a portion of the estate tax is 
deferred under section 6166 or 6166A (as in effect prior to its repeal 
by Economic Recovery Tax Act of 1981), an executor of a decedent's 
estate who seeks to be discharged from personal liability may elect a 
lien in favor of the United States in lieu of the bonds required by 
sections 2204 and 6165. This election is made by applying to the 
Internal Revenue Service office where the estate tax return is filed at 
any time prior to payment of the full amount of estate tax and interest 
due. The application is to be a notice of election requesting the 
special lien provided by section 6324A and is to be accompanied by the 
agreement described in paragraph (b) (1) of this section.
    (b) Agreement to lien--(1) In general. A lien under this section 
will not arise unless all parties having any interest in all property 
designated in the notice of election as property to which the lien is to 
attach sign an agreement in which they consent to the creation of the 
lien. (Property so designated need not be property included in the 
decedent's estate.) The agreement is to be attached to the notice in 
which the lien under section 6324A is elected. It must be in a form that 
is binding on all parties having any interest on the property and must 
contain the following:
    (i) The decedent's name and taxpayer identification number as they 
appear on the estate tax return;
    (ii) The amount of the lien;
    (iii) The fair market value of the property to be subject to the 
lien as of the date of the decedent's death and the date of the election 
under this section;
    (iv) The amount, as of the date of the decedent's death and the date 
of the election, of all encumbrances on the property, including 
mortgages and any lien under section 6324B;
    (v) A clear description of the property which is to be subject to 
the lien, and in the case of property other than land, a statement of 
its estimated remaining useful life; and
    (vi) Designation of an agent (including the agent's address) for the 
beneficiaries of the estate and the consenting parties to the lien for 
all dealings with the Internal Revenue Service on matters arising under 
section 6166 or 6166A (as in effect prior to its repeal by Economic 
Recovery Tax Act of 1981), or under section 6324A.
    (2) Persons having an interest in designated property. An interest 
in property is any interest which as of the date of the election can be 
asserted under applicable local law so as to affect the disposition of 
any property designated in the agreement required under this section. 
Any person in being at the date of the election who has any such 
interest in the property, whether present or future, or vested or 
contingent, must enter into the agreement. Included among such persons 
are owners of remainder and executory interests, the holders of general 
or special powers of appointment, beneficiaries of a gift over in 
default of exercise of any such power, co-tenants, joint tenants, and 
holders of other undivided interests when the decedent held a joint or 
undivided interest in the property, and trustees of trusts holding any 
interest in the property. An heir who has the power under local law to 
caveat (challenge) a will and thereby affect disposition of the property 
is not, however, considered to be a person with an interest in property 
under section 6324A solely by reason of that right. Likewise, creditors 
of an estate are not such persons solely by reason of their status as 
creditors.
    (3) Consent on behalf of interested party. If any person required to 
enter into the agreement provided for by this paragraph either desires 
that an agent act for him or her or cannot legally bind himself or 
herself due to infancy or other incompetency, a representative 
authorized under local law to bind the interested party in an agreement 
of this nature is permitted to sign the agreement on his or her behalf.
    (4) Duties of agent designated in agreement. The Internal Revenue 
Service will contact the agent designated in the agreement under 
paragraph (b)(1) on all matters relating to continued qualification of 
the estate under section 6166 or 6166A (as in effect prior to

[[Page 261]]

its repeal by Economic Recovery Tax Act of 1981) and on all matters 
relating to the special lien arising under section 6324A. It is the duty 
of the agent as attorney-in-fact for the parties with interests in the 
property subject to the lien under section 6324A to furnish the Service 
with any requested information and to notify the Service of any event 
giving rise to acceleration of the deferred amount of tax.
    (c) Partial substitution of bond for lien. If the amount of unpaid 
estate tax plus interest exceeds the value (determined for purposes of 
section 6324A(b)(2)) of property listed in the agreement under paragraph 
(b) of this section, the Internal Revenue Service may condition the 
release from personal liability upon the executor's submitting an 
agreement listing additional property or furnishing an acceptable bond 
in the amount of such excess.
    (d) Relation of sections 6324A and 2204. The lien under section 
6324A is deemed to be a bond under section 2204 for purposes of 
determining an executor's release from personal liability. If an 
election has been made under section 6324A, the executor may not 
substitute a bond pursuant to section 2204 in lieu of that lien. If a 
bond has been supplied under section 2204, however, the executor may, by 
filing a proper notice of election and agreement, substitute a lien 
under section 6324A for any part or all of such bond.
    (e) Relation of sections 6324A and 6324. If there is a lien under 
this section on any property with respect to an estate, that lien is in 
lieu of the lien provided by section 6324 on such property with respect 
to the same estate.
    (f) Section 6324A lien to be in lieu of bond under section 6165. The 
lien under section 6324A is in lieu of any bond otherwise required under 
section 6165 with respect to tax to be paid in installments under 
section 6166 or section 6166A (as in effect prior to its repeal by 
Economic Recovery Tax Act of 1981).
    (g) Special rule for estates for which elections under section 6324A 
are made on or before August 30, 1980. If a lien is elected under 
section 6324A on or before August 30, 1980, the original election may be 
revoked. To revoke an election, the executor must file a notice of 
revocation containing the decedent's name, date of death, and taxpayer 
identification number with the Internal Revenue Service office where the 
original estate tax return for the decedent was filed. The notice must 
be filed on or before January 31, 1981 (or if earlier, the date on which 
the period of limitation for assessment expires).

(Approved by the Office of Management and Budget under control number 
1545-0754)

(Secs. 2032A and 7805 of the Internal Revenue Code of 1954 (90 Stat. 
1856, 68A Stat. 917; 26 U.S.C. 2032A, 7805); secs. 6324A(a) and 7805 of 
the Internal Revenue Code of 1954 (90 Stat. 1808, 68A Stat. 917; 26 
U.S.C. 6324A(a), 7805))

[T.D. 7710, 45 FR 50747, July 31, 1980, as amended by T.D. 7941, 49 FR 
4469, Feb. 7, 1984]