United States v. National Bank of Commerce, 472 U.S. 713 (1985)

The case United States v. National Bank of Commerce established the rule that, in the context of a tax levy, the IRS “steps into the shoes” of the taxpayer—meaning the IRS acquires only the rights the taxpayer has in the property subject to the levy.

This principle is referenced in later cases and IRS guidance, which state that when the IRS levies on property, it does not obtain greater rights than the taxpayer possessed. For example, in Internal Revenue Service v. Snyder, the Ninth Circuit explained that the IRS cannot enforce its liens on a taxpayer’s interest in an ERISA plan until the plan enters pay-out status, because the IRS merely steps into the shoes of the taxpayer and does not acquire any greater rights to property than the taxpayer himself enjoys, citing National Bank of Commerce as authority for this rule.