Tax Legal Services · Primary-source case analysis

Drye: A State-Law Disclaimer Does Not Defeat a Federal Tax Lien

By Aneeta Mishra and Timothy Chan

Published September 13, 2026

Drye v. United States explains why federal law, not a state relation-back rule, determines whether state-created rights are sufficiently valuable for a federal tax lien.

The taxpayer disclaimed an inheritance

Rohn Drye owed substantial federal taxes when his mother died intestate. As sole heir he could take the estate or disclaim it under Arkansas law. He disclaimed, causing the property to pass to his daughter, who placed it in a trust benefiting both of them.

State law identifies the taxpayer’s rights

State law determines what rights a person has in property. Drye possessed a valuable choice: he could accept the inheritance or direct it to the next taker by disclaiming. That control had economic value even though Arkansas law treated a disclaimer as relating back to the decedent’s death.

Federal law decides whether those rights are lienable

Once the state-created rights were identified, federal law determined whether they counted as property or rights to property under the federal lien statute. The Court held that Drye’s control over the inheritance was sufficient for the federal lien to attach.

A state exemption cannot narrow the federal lien

Arkansas could regulate transfer and creditor remedies under state law, but it could not remove a valuable right from the reach of a federal tax lien. The Court affirmed the judgment recognizing the United States’ interest.

Key takeaways

• Identify the taxpayer’s actual control over the asset under state law.
• Apply federal law to decide whether that control is lienable.
• Do not assume a state relation-back rule defeats a federal lien.
• Check whether the lien arose before any disclaimer or transfer.