In the 2006 case EC Term of Years Trust v. United States, the U.S. Supreme Court ruled unanimously in favor of the government, upholding its right to seize property to satisfy a tax lien against an individual who had transferred his assets into a trust. The court held that federal law allows for such seizures when taxes are owed by beneficiaries or creators of trusts and there is no other way for them to be paid off. In this case, Billy Joe "Red" McCombs had moved significant assets into a trust known as EC Term of Years Trust while owing millions in back taxes from previous years' income. When he failed to pay these debts despite multiple notices and opportunities, the IRS seized certain properties owned by the trust as payment towards his debt.

In the dissenting opinion for EC Term of Years Trust v. United States, Justice John Paul Stevens argued that the Court's majority decision was incorrect in its interpretation of 28 U.S.C. § 2410(a). He contended that this law does not grant a waiver to sovereign immunity for quiet title actions involving property on which the federal government has a lien. According to Justice Stevens, such an interpretation is inconsistent with both historical and legal precedent regarding waivers of sovereign immunity, which are traditionally construed narrowly. Furthermore, he asserted that Congress did not intend to allow private parties to challenge the validity or priority of federal tax liens through quiet title actions when it enacted § 2410(a). Instead, he believed this provision merely allows individuals who claim an interest in property subject to a federal lien to seek judicial determination about whether their claims have priority over those of other non-federal entities also claiming interests in said property.