In the United States v. Sandra L. Craft case of 2001, the Supreme Court ruled that a federal tax lien could be attached to one spouse's interest in property held as "tenancy by entirety," even if only one spouse was responsible for the tax debt. The court decided this based on its interpretation of Section 6321 of the Internal Revenue Code which states that such liens can attach to “all property and rights to property” belonging to a delinquent taxpayer. In this case, Don Craft had transferred his entire interest in their jointly owned home solely into his wife’s name, Sandra L.Craft, without receiving any payment or consideration from her after he became aware of his significant federal income-tax liabilities for several years prior. The IRS then sought to seize Mr.Craft's half-interest in their former marital home under section 6321 despite Michigan law recognizing it as tenancy by entirety (property ownership exclusive between married couples). The Supreme Court found that Mr.Craft did have an individual right over half-property during marriage and thus allowed IRS seizure.

In the dissenting opinion for United States v. Sandra L. Craft, Justice Thomas argued that Michigan law did not give Mrs. Craft a property interest in her husband's half of their jointly owned home sufficient to create a federal tax lien under 26 U.S.C § 6321. He contended that the majority misinterpreted both state and federal law by concluding otherwise, thereby expanding the reach of federal tax liens beyond what Congress intended or authorized. Justice Thomas pointed out that under Michigan law, neither spouse has an individual ownership interest in entireties property; instead they each have "a single indivisible interest" which is held by them as one entity - not separately as individuals. Therefore, he reasoned that Mr. Craft could not transfer any part of his interest in entirety property to satisfy his separate debt because he had no divisible share to transfer. Furthermore, Justice Thomas criticized the majority for disregarding long-standing principles governing interpretation of tax statutes and ignoring clear legislative history indicating Congress' intent to respect state-law limitations on creditors' rights when it enacted § 6321. He concluded with concerns about potential implications this ruling might have on other areas where Federal Government interacts with State-property laws such as bankruptcy proceedings or environmental regulations.