How is the priority of a federal tax lien determined?

The priority of a federal tax lien is determined by the date of filing or recording. In the context of tax law, this means that once a federal tax lien is filed with the appropriate government entity, it establishes a legal claim against the property of the debtor for the amount owed to the federal government. This recording date is crucial because it dictates the position of the lien against other claims or liens that might exist on the property.

Liens that are filed later will generally be subordinate to earlier-filed liens, hence the importance of the timeline. This principle ensures that when multiple claims exist against a property, the order of recording establishes priority, which ultimately affects the rights of creditors in the event of foreclosure or liquidation of the debtor's assets.

The other options do not accurately reflect how the priority of a federal tax lien is determined, as income analysis, property type, and state laws are not the primary factors in establishing the lien's precedence. Instead, it is specifically the date the lien is filed that holds significance in the determination of priority.