Most people never think about the word “survivorship” until a funeral. Then it becomes the most important word in the deed.

Florida tenancy by the entireties carries a right of survivorship. When one spouse dies, the other owns the property outright, automatically, without probate. When one spouse owes the IRS and the other does not, survivorship decides what happens to the federal tax lien. And the answer depends entirely on who dies first.

This guide is about property law and the federal tax lien. It is not an estate tax guide, and it does not cover the separate rules for collecting a deceased taxpayer’s debt from estate assets. It answers one narrow, practical question for Tampa families: what happens to the lien on entireties property when a spouse dies?

The starting point: the lien attaches to the liable spouse’s interest

In United States v. Craft, 535 U.S. 274 (2002), the Supreme Court held that the federal tax lien under IRC 6321 attaches to the rights a liable spouse holds in entireties property. That includes the right of survivorship itself. My guide on tenancy by the entireties and the federal tax lien explains the case.

The IRS published its reading of Craft in Notice 2003-60, and the Internal Revenue Manual carries the same rules at IRM 5.17.2.5.2.4. That guidance answers the survivorship question directly, in a question-and-answer format. The rules below come from that notice.

If the liable spouse dies first

Notice 2003-60 says that, as with joint tenancy with right of survivorship, if a taxpayer’s interest in entireties property is extinguished by operation of law at the taxpayer’s death, there is no longer an interest of the taxpayer to which the federal tax lien attaches. When the taxpayer dies, the surviving non-liable spouse takes the property unencumbered by the federal tax lien.

Read that again, because it surprises people. The lien attached to the liable spouse’s rights. At death, under Florida law, those rights end. The surviving spouse does not inherit them. The survivor’s ownership was always there; it simply expands. There is nothing left for the lien to grab.

The notice gives an example involving a mortgage: if the taxpayer predeceases the spouse and his or her interest is extinguished by operation of law, the federal tax lien will be extinguished, and the mortgage lien becomes the first lien on the property.

For a Tampa widow whose late husband owed the IRS from a failed business, that can mean the house she lives in is free of his separate tax lien. It does not mean the IRS forgets the debt. The IRS may still pursue other assets that belonged to him, including through his estate. But the entireties home is a different story.

If the non-liable spouse dies first

Now flip it. The spouse who owed nothing dies, and the spouse who owes the IRS survives.

Notice 2003-60 says that when a non-liable spouse predeceases the taxpayer, the property ceases to be held in a tenancy by the entirety, the taxpayer takes the entire property in fee simple, and the federal tax lien attaches to the entire property.

That is a dramatic change. Before the death, the IRS generally valued the taxpayer’s interest at one-half. After the death, the taxpayer owns 100 percent, and the lien reaches 100 percent. The notice’s mortgage example makes the same point from the other side: with the death of the taxpayer’s spouse, the taxpayer becomes the fee simple owner, and the federal tax lien attaches to that interest.

For a surviving spouse with an unresolved tax debt, this is the moment to get serious about resolution. A property that was awkward for the IRS to collect is now simple to collect, subject to the usual protections for a principal residence discussed in my guide to IRS seizure of a home in Tampa.

The exception that catches people: a broken tenancy

The “lien disappears” rule only works if the tenancy by the entireties was still intact when the liable spouse died. Notice 2003-60 is explicit: the rule that the federal tax lien does not survive the death of the taxpayer does not apply if the entireties estate previously has been terminated.

A tenancy by the entireties ends in several ways under Florida law:

  • A transfer to someone else. If the couple deeds the property to a child, a trust or a third party, the entireties estate ends. The notice says the lien will then be deemed to encumber a one-half interest in the hands of the transferee and will not be affected by the later death of either spouse.
  • A transfer between spouses. Deeding the property from both spouses to the non-liable spouse alone also ends the tenancy. The lien follows a one-half interest to the transferee spouse. My guide on retitling property to a spouse covers why that move often backfires.
  • Divorce. Florida converts entireties property to a tenancy in common on dissolution of marriage. Notice 2003-60 says entireties property subject to the lien and transferred after Craft to a non-liable spouse in a divorce remains encumbered in that ex-spouse’s hands.

The lesson is counterintuitive. Families sometimes try to “protect” the house by moving it out of joint names. In the tax lien context, leaving it as entireties property can actually preserve a survivorship outcome that a transfer would destroy.

Joint liabilities are not covered by any of this

Survivorship only helps when one spouse alone owes. If the tax came from joint returns, both spouses are liable. When either dies, the survivor still owes the joint debt and now owns the whole property. The lien attaches to the whole property in the survivor’s hands. Pull the account transcripts for every year and check whether each assessment is joint or separate. The transcripts are the only reliable answer.

Cleaning up the Hillsborough County records

Even when the law says the lien no longer attaches, the paper trail does not fix itself. The Notice of Federal Tax Lien recorded with the Hillsborough County Clerk stays in the Official Records. A title insurer will see it when the survivor tries to sell or refinance.

The cleanup usually involves:

  1. A certified death certificate.
  2. The recorded deed showing the property was held by husband and wife as tenants by the entireties.
  3. Evidence the tenancy was never broken, such as the absence of later deeds.
  4. Transcripts showing the tax was the deceased spouse’s separate liability.
  5. A request to the IRS for an appropriate certificate. IRC 6325(e) authorizes a certificate of nonattachment when the lien does not attach to a particular person’s property. IRS Publication 1450 explains how to request a release, and the IRS lien unit can tell you which certificate fits.

My guide on finding an IRS lien in the Hillsborough County records explains how to locate the recorded notice so you know exactly what you are asking the IRS to address.

Practical points for Tampa families

If one spouse owes the IRS and you own your home as tenants by the entireties, these are the takeaways:

  • Do not break the tenancy casually. A deed to one spouse or a trust changes the survivorship math.
  • If the non-liable spouse is seriously ill, understand that the surviving liable spouse may soon own the whole property subject to the whole lien. Resolution planning should start now.
  • If the liable spouse has died, do not assume the house is stuck. The IRS’s own guidance may say the lien is gone as to that property.
  • Keep the deeds. The entire analysis depends on how title was held and when.

Families going through a death have enough to deal with. If a federal tax lien is part of it, you can reach the firm’s Hillsborough County practice through GetIRSHelp.com.

Survivorship is either the best clause in your deed or the worst. The IRS already knows which.