Fox Rothschild LLP’s claim to collect attorneys’ fees from a client’s $750,000 settlement takes precedence over the IRS’s tax lien on the same amount, according to a decision by a Nevada federal court. The firm had represented Timothy Blixseth in a Chapter 7 involuntary bankruptcy action initiated by a group of creditors in 2011. The proceedings were dismissed, and Fox Rothschild subsequently filed notices of liens for their fees. This lien was perfected before Blixseth resolved his federal tax liabilities. The court concluded that because Fox’s lien became enforceable before the IRS’s tax lien, their interest holds priority.
For additional details, please read the full article on Bloomberg Tax.