## Facts

- Rohn Drye owed the United States approximately $325,000 in unpaid federal income taxes, and valid federal tax liens existed under 26 U.S.C. § 6321.
- Drye’s mother died intestate in Arkansas, leaving an estate of about $233,000; under Arkansas intestacy law, Drye was the sole heir.
- Drye was appointed administrator of the estate and later executed a written disclaimer of all interests in the estate.
- Under Arkansas law, the disclaimer treated Drye as having predeceased the decedent, diverted the inheritance to his daughter, and generally prevented creditors from reaching the disclaimed property.
- Drye’s daughter became administrator and transferred the estate assets into the Drye Family 1995 Trust, with a spendthrift clause and discretionary distributions for beneficiaries’ health, maintenance, and support.
- The IRS filed a notice of federal tax lien and served a notice of levy directed at trust-held accounts; the trust filed a wrongful levy action, and the Government counterclaimed to enforce the tax liabilities and reach the trust assets.

## Issues

1. Whether an heir’s power under state law to accept an inheritance or disclaim it constitutes “property” or “rights to property” under 26 U.S.C. § 6321.
2. Whether a state-law disclaimer that diverts an inheritance and blocks creditor remedies can prevent a federal tax lien from attaching to the taxpayer’s interest.

## Decision

- The Supreme Court unanimously affirmed.
- The Court held that Drye’s right, upon his mother’s death, to take the estate or redirect its value by disclaimer was “property” or “rights to property” within the meaning of § 6321.
- The federal tax lien attached when Drye acquired that state-law right, and the later disclaimer could not defeat the federal lien.
- The Government could reach the value represented by Drye’s disclaimed inheritance, including as converted into trust assets.

## Legal Principles

- State law determines the existence and scope of the taxpayer’s rights and interests; federal law determines whether those rights amount to “property” or “rights to property” for § 6321.
- “Property” for § 6321 is construed broadly to include valuable, legally protected rights with economic value, including the power to control or channel value to others.
- A state-law device that retroactively treats a taxpayer as never having owned an interest (such as a disclaimer) cannot divest or limit a federal tax lien once the taxpayer has acquired a qualifying right.
- Debtor-protective state rules, including creditor limits tied to disclaimers and spendthrift-like protections, do not control the reach of a federal tax lien when the taxpayer had a meaningful right of control over the value at issue.

## Conclusion

Drye’s ability under state law to accept his inheritance or redirect it through disclaimer was a federally cognizable property right, so the federal tax lien attached upon his mother’s death and remained enforceable despite the disclaimer and subsequent transfer of estate assets into a trust.


Drye v. United States, 528 U.S. 49 (1999)