Record and brief — United States v. Rodgers

Supreme Court brief1983

Ask Donna

What actually matters in this document.

Text

~ voned

FIL!

FES 8

OCTOBER TERM, 1981

UNITED STATES OF AMERICA, PETITIONER

Vv.

LUCILLE MITZY Bosco ROGERS, ET AL.

UNITED STATES OF AMERICA, PETITIONER

Vv.

JOERENE INGRAM, ET AL.

PETITION FOR WRiTS OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Rex E. LEE

Solicitor General

GLENN L. ARCHER, JR.

Assistant Attorney General

STUART A. SMITH

Assistant to the Solicitor General

WILLIAM S. ESTABROOK

WYNETTE J. HEWETT

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

VEN OUUICIe VOUrt, U.o.

1982

QUESTIONS PRESENTED

1. Whether the existence of a state homestead law

exempts real property from forced sale uneler the

Internal Revenue Code to satisfy the delinquent fed-

eral tax liability of one of the owners of a home-

stead, where the other owner occupying the homestead

is not a delinquent taxpayer and is characterized yy

State law as having an estate in land.

2. Whether, in a foreclosure action brought by the

United States under Section 7403(¢) of the Internal

Revenue Code (26 U.S.C.), a federal court is em-

powered to order the sale of homestead real property

to enforce a federal tax lien that attaches to a delin-

quent taxpayer's interest in the property, where there

is another owner occupying the homestead who is not

a delinquent taxpayer.

(1)

TABLE OF CONTENTS

Page

EE an ee eee ee _ 1

PI acicaisdeniel dailies tachah neaieainiacniniaemnatintentnen tie 2

Statutes and regulation involved sali 2

Statement 2

Reasons for granting the petition —................. ; 8

SEI ane ae + ae eS 20

Appendix A .. la

Appendix B 25a

Appendix C 33a

Appendix D 35a

Appendix E a

"ERIS PERCE Oe ee SOS ee OP 39a

I TU cictaciscirsieihlinaertepinaindeiatabainiih dabei inal picetlnieniciia 4la

TABLE OF AUTHORITIES

Cases :

Ackerman, In re, 424 F.2d 1148 ‘ 16

Aquilino v. United States, 363 U.S. 509 ................. 15

Bonner v. City of Prichard, Alabama, 661 F.2d

1206 Ma 9

Broday Vv. United States, 456 F.2d 1097 .................. 16

Carter v. United States, 399 F.2d 340 00. 10

Fink Vv. O’Neil, 106 U.S. 272 ................000--c0-seeceeeeesees 13,17

Folsom v. United States, 306 F.2d 361 .................... 18

Herndon Vv. United States, 501 F.2d 1219 .......... 4, 8, 14, 17

Jones V. Kemp, 144 F.2d 478 .200........-.-22.-cccccceeeeeeoeeee 9

Mulcahy V. United States, 388 F.2d 300 .................. 16

Shambaugh Vv. Scofield, 182 F.2d 345 2.00000. 17

Shaw v. United States, 331 F.2d 493 —.......0.... 14

Tillery V. United States, 630 F.2d 775 ................... 9

(mI)

Cases—Continued Page

United States v. Bess, 357 U.S. 51 .. 14,17

United States v. Boyd, 246 F.2d 477, cert. denied,

I ci 19, 20

United States v. Dallas National Bank, 152 F.2d

582, modified on another ground, 167 F.2d 468.. 17

United States v. Eaves, 499 F.2d 869 ...................... 9,19

United States v. Estes, 450 F.2d 62 0.0.0.0... 17

United States v. Heasley, 283 F.2d 422 ................ 4, 8,14

United States v. Heffron, 158 F.2d 657, cert. de-

Bs Tee Ts TE hiititincntecndidctestctdiinisiictsncnseiniaal 4, 8,14

United States v. Hershberger, 475 F.2d 677 ........ 4-5, 9, 15

United States v. Kocher, 468 F.2d 503, cert. de-

a a a cata 9,19

United States v. Mitchell, 403 U.S. 190 ................ 13, 14, 16

United States v. Morrison, 247 F.2d 285 ............... 19, 20

United States v. Overman, 424 F.2d 1142 _........... 9, 16, 19

United States v. Trilling, 328 F.2d 699 0.0... 9,19

Washington Vv. United States, 402 F.2d 3, cert. de-

RE ee ame 9,19

Weitzner v. United States, 309 F.2d 45, cert. de-

ee I STEED Wid itaieneicheemnrtncuteninscnteneiiniceaicdinicemnes 15

Statutes and regulation :

Internal Revenue Code of 1939 (26 U.S.C. (1940

ed.)):

a endian 13

a 13

Internal Revenue Code of 1954 (26 U.S.C.):

OR iain ge ide lea nnntsa ssstnestecnshbiiabils 11-12

do cnicinelabtgilaties 12

I 11

I hi 12

KS ESTO a eee 12

ESSE SLOTS ee 2,18, 41a

Section 6884(a) .......................... 4, 12, 18, 16, 41a-42a

I i a el 4, 12-13, 43a

I 2, 5, 12, 17, 48a

I eel 18, 438a-44a

EIT NCEE re 18, 44a

Section 7403 (c) 9, 18, 44a

Statutes and regulation—Continued Page

Rev. Stat. 3187, 3188 (1878 ed.) sail 13

SO a 20

Treasury Regulations on Procedure and Adminis-

tration, Section 301.6334-1(c) (26 C.F.R.)....2, 44a-45a

Miscellaneous:

H.R. Rep. No. 1337, 83d Cong., 2d Sess. (1954) .... 13

S. Rep. No. 1622, 83d Cong., 2d Sess. (1954) ....... 12

Iu the Supreme Court of the United States

OCTOBER TERM, 1981

No.

UNITED STATES OF AMERICA, PETITIONER

Vv.

LUCILLE MI1Tzy Bosco ROGERS, ET AL.

UNITED STATES OF AMERICA, PETITIONER

Vv.

JOERENE INGRAM, ET AL.

PETITION FOR WRITS OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

The Solicitor General, on behalf of the United

States of America, petitions for writs of certiorari

to review the judgments of the United States Court

of Appeals for the Fifth Circuit in these cases.

OPINIONS BELOW

The district court did not issue an opinion in either

case. The opinion of the court of appeals in Rogers

(App. A, infra, la-24a) is reported at 649 F.2d 1117.

(1)

The court’s opinion in Ingram (App. B, infra, 25a-

32a) is reported at 649 F.2d 1128.

JURISDICTION

The judgments of the court of appeals in both

cases were entered on July 6, 1981 (Apps. C and D,

infra, 33a-36a). On September 28, 1981, the court

of appeals denied the government’s petitions for re-

hearing with suggestions for rehearing en banc (App.

E and F, infra, 37a-39a). By orders dated Decem-

ber 18 and January 18, 1982, Justice White extended

the time within which petitions for writs of certiorari

could be filed in these cases to February 5, 1982.

The jurisdiction of this Court is invoked under 28

U.S.C. 1254(1).

STATUTES AND REGULATION INVOLVED

Sections 6334 and 7403 of the Internal Revenue

Code of 1954 (26 U.S.C.), and Section 301.6334-1(c)

of the Treasury Regulations on Procedure and Ad-

ministration (26 C.F.R.), are set forth in App. G,

infra, 41a-44a.

STATEMENT

1. Rogers. On October 24, 1937, Philip S. Bosco

and respondent Lucille Mitzi Bosco Rodgers’ were

married. In 1955, they obtained as community prop-

erty the residential real property involved in this

suit, which they occupied with their children as their

homestead (App. A, infra, la-2a). In 1971 and 1972,

the Internal Revenue Service issued assessments to-

taling $927,284.79 for federal wagering taxes, penal-

ties and interest, against Philip for the taxable years

1 Respondent’s name was inadvertently misspelled in the

caption of the case.

1966 through 1971 (App. A, infra, 2a). These taxes

remained unpaid at the time of Philip’s death on

November 6, 1974 (ibid.). After Philip’s death, re-

spondent continued to occupy the property as her

homestead. The couple’s children have married and

have left their parents’ home. Respondent thereafter

remarried and now occupies the homestead property

with her present husband. At the time this suit was

filed, respondent held no property belonging to Philip

other than the homestead property and certain per-

sonal property having value less than $500 (ibid.).

The government instituted this suit in the United

States District Court for the Northern District of

Texas against respondent and Philip’s son, daughter

and executor for the purposes of reducing to judg-

ment the assessments against Philip, enforcing the

tax liens against any property belonging to him and

obtaining a deficiency judgment in the amount of any

unsatisfied part of the liability (App. A, infra, 2a).

In response, the defendants moved for summary judg-

ment on the ground that they held no property belong-

ing to Philip other than certain personal property of

limited value and the real property which respondent

claimed as a homestead (App. A, infra, 2a-3a). The

district court granted summary judgment in favor

of respondents (App. A, infra, 3a).

The court of appeals affirmed (App. A, infra, 1a-

24a).? In so holding, the court acknowledged (App.

A, infra, 6a), that nonhomestead community prop-

erty may be reached in its entirety by the govern-

ment in order to satisfy the tax debts of either spouse.

2 The district court also awarded respondents attorney’s fees

of $3,000 (App. A, infra, 3a, 23a-24a). However, the court of

appeals reversed this aspect of the district court’s judgment,

concluding “that the district court acted outside of its dis-

cretion in awarding attorney’s fees to [respondents]” (id. at

24a). The attorney’s fee question is not before the Court.

It further acknowledged that under Section 6334(a)

and (c), “the homestead interest of a taapayer spouse,

i.e., that of one who himself has tax liability, clear'y

cannot by itself defeat a federal tax lien” (App. A,

infra, 7a; emphasis in original). Those provisions of

the Internal Revenue Code enumerate particular

items of property that are exempt from levy and fur-

ther stipulate that no other property shall be exempt

from levy. The court concluded that “the federal tax

liens in this case clearly attached to the deceased tax-

payer spouse’s interest in the realty claimed as a

homestead” (id. at 8a). As a result, the court ac-

knowledged that the tax liens “could be executed

against that interest if his was the only interest in

the homestead, or if both spouses were delinquent tax-

payers and the liens had attached to each spouse’s

interest in the homestead” (ibid.; emphasis in

original).

The court, however, resisted the conclusion that the

tax liens may be foreclosed or enforced against the

taxpayer spouse’s interest in realty claimed as a

homestead when the other spouse, having an equal

interest in the homestead property, has no tax liabil-

ity. It noted that the authorities were divided on the

question whether the government may foreclose its

tax lien on a taxpayer spouse’s homestead interest,

if a nontaxpayer spouse had an interest in the home-

stead pronerty. The Ninth® and Eighth* Circuits

had held that the government could foreclose its tax

lien in these circumstances.

But the court below followed the opposite conclu-

sion reached in United States v. Hershberger, 475

8 United States v. Heffron, 158 F.2d 657 (9th Cir.), cert.

denied, 331 U.S. 831 (1947).

* United States v. Heasley, 283 F.2d 422 (8th Cir. 1960);

Herndon vy. United States, 601 F.2d 1219 (8th Cir. 1974).

F.2d 677 (10th Cir. 1973). There, the Tenth Circuit

reasoned that if a homestead is merely an exemption

from general creditors under state law, the nontax-

payer spouse’s interest will not prevent execution of

a federal tax lien on the taxpayer spouse’s interest.

If, on the other hand, state law characterizes a home-

stead interest as an estate in land, as it did in Hersh-

berger, the Tenth Circuit held that a federal tax lien

may not be foreclosed against the homestead as long

as the nontaxpayer spouse’s interest exists “der

state law (App. A, infra, 9a-lla). Since the court

below determined that a Texas homestead interest is

an undivided, vested estate in land, it similarly ruled

that the government could not foreclose its federal

tax liens on the homestead interest of Philip as long

as respondent, the nontaxpayer spouse, maintained

her interest in the homestead (id. at 19a-23a).

In support of its ruling, the court below relied on its

prior decisions holding that in a foreclosure action

brought by the government under Section 7403 of

the Code, the federal courts cannot require the sale

of property to foreclose a federal tax lien that at-

taches to the interest of only one of the owners of

the property (App. A, infra, 14a-17a). The court,

however, acknowledged that four other circuits have

taken the opposite view, holding that the courts

should, at the behest of the government, order the

sale of the entire jointly held property in order to

satisfy the tax liability of one of the joint tenants

(id. at 16a n.12).

2. Ingram. During their marriage, Donald and

respondent Joerene Ingram acquired as community

property, a residence located in Dallas, Texas, and

claimed this property as their homestead under Texas

law. In 1972 and 19738, the Internal Revenue Service

made assessments against Donald Ingram under Sec-

tion 6672 of the Code relating to unpaid taxes with-

held from employees’ wages of the Dallas Auto Dam-

age Appraisers, Inc., of which Donald Ingram was

president. The tax liabilities related to the period

from the first quarter of 1971 through the second

quarter of 1972. After payments on account of these

liabilities were made, there remained unpaid

$9,330.51, plus interest. In addition, in 1973, an

assessment was made in the amount of $283.33, plus

interest, against Donald and Joerene Ingram relating

to their joint income tax liability for 1971. This

amount remains unpaid (App. B, infra, 26a).

On March 19, 1975, at which time the Ingrams

were seeking a divorce, their residence was destroyed

by fire (App. B, infra, 26a).° In connection with

their divorce proceedings, they entered into a prop-

erty settlement agreement in which they agreed that

Donald would convey his interest in the real property

to respondent. After the property was conveyed to.

Laurel Bates, as trustee for respondent, attempts to

sell the property failed. Respondent also received

notice from the City of Dallas Department of Hous-

ing and Urban Rehabilitation that unless she com-

plied with local ordinances, the remains of the resi-

5 The home was insured and the proceeds of the fire insur-

ance policy, approximately $50,000, were deposited into the

registry of the Domestic Relations Court where their divorce

proceedings were pending. Joerene and Donald Ingram en-

tered into a property settlement agreement, which provided,

inter alia, that the parties would divide the proceeds equally

and that Donald would convey his interest in the real property

to Joerene in exchange for $1,500 to be paid from the proceeds

of the insurance policy (App. B, infra, 26a-27a).

In addition, Joerene and Donald agreed that they would file

separate income tax returns for 1974, that Donald would pay

any income tax on joint income for 1974, and that he would

“hold [his] Wife harmless for any deficiencies or assessments

for the years 1971 through 1973” (App. B, infra, 27a).

dence would be demolished. Following a hearing,

notice requiring demolition was given. Respondent

and Laurel Bates thereupon instituted this action in

state court to quiet title to the property, to remove

the liens that encumbered it, and to enjoin demolition

of the improvements located on the property (App.

B, infra, 27a).

The suit was removed to the United States District

Court for the Northern District of Texas. There-

after, the United States filed a counterclaim against

respondent and Donald Ingram, who was added as

a defendant, seeking foreclosure of its tax liens for

the sole liability of Donald Ingram for unpaid with-

holding taxes and for the joint liability of Donald and

Joerene Ingram for unpaid income taxes. Respond-

ent sought summary judgment urging that the prop-

erty was insulated from creditors’ claims because it

was her homestead. Pursuant to a stipulation of the

parties, the property was sold and the proceeds (ap-

proximately $16,250) were deposited into the registry

of the district court, pending the outcome of the suit."

The government opposed respondent’s motion for sum-

mary judgment on the ground that there was a mate-

rial question of fact concerning whether she had

abandoned the homestead. In addition, the govern-

ment filed a cross-motion for summary judgment on

its counterclaim on the ground that the state home-

stead exemption was ineffective against the federal

tax liens.’ The district court granted the govern-

* The parties agreed that their rights, claims, and priorities

would be determined as if the sale had not taken place, and

that the proceeds would be divided according to their respec-

tive interests (see App. B, infra, 28a).

™The government also sought summary judgment on its

cross claims against the competing creditors on the ground

ment’s motion for summary judgment (App. B, infra,

28a-29a).

On the authority of its decision in Rogers,* the

court of appeals reversed. It held that if respondent

maintained her homestead interest in the property,

the government was not entitled to enforce its tax

lien based on Donald Ingram’s withholding tax liabil-

ity. The court, however, affirmed the judgment inso-

far as the district court had permitted the govern-

ment to satisfy its claim relating to the joint income

tax liability from the proceeds of sale. An issue of

fact remained as to whether respondent continued

to maintain her interest in the property as a home-

stead which she could assert against a levy by the

Internal Revenue Service for the purpose of satisfy-

ing her former husband’s federal withholding tax

liability. The court therefore remanded the case for

that determination (App. B, infra, 3la-32a).

REASONS FOR GRANTING THE PETITION

In holding that a state homestead law exempts real

property from forced sale to satisfy the delinquent

federal tax liabilities of one of the owners, where

the other owner occupying the homestead is not a

delinquent taxpayer and is characterized by state

law as having an estate in land, the court of appeals

acknowledged (App. A, infra, 9a-10a) that its deci-

sion conflicted with those of two other circuits in

United States v. Heffron, 158 F.2d 657 (9th Cir.),

cert. denied, 331 U.S. 831 (1947); United States v.

Heasley, 283 F.2d 422 (8th Cir. 1960); Herndon v.

United States, 501 F.2d 1219 (8th Cir. 1974). The

that the tax liens had priority over their interests (App. B,

infra, 28a-29a).

* The court of appeals consolidated the case for oral argu-

ment with Rogers (App. A, infra, 3a n.3).

decision below, however, followed the opposite con-

clusion of the Tenth Circuit in United States v.

Hershberger, 475 F.2d 677 (1973). Accord: Jones

v. Kemp, 144 F.2d 478, 480 (10th Cir. 1944); Til-

lery v. Parks, 630 F.2d 775 (10th Cir. 1980).

Moreover, the court of appeals’ ruling that in a

suit brought by the government under 26 U.S.C.

7403(c), a federal court may not order the sale of

real property to foreclose an unquestionably valid tax

lien that attaches to a delinquent taxpayer’s interest

in property, where there is another owner who is not

a delinquent taxpayer, concededly conflicts with the

decisions of four other circuits upholding the govern-

ment’s right to foreclose its tax liens on jointly held

property to satisfy the tax liabilities of one of the

owners (see App. A, infra, 16a n.12). United States

v. Trilling, 328 F.2d 699, 702-703 (7th Cir. 1964);

Washington v. United States, 402 F.2d 3, 6-7 (4th

Cir. 1968), cert. denied, 402 U.S. 978 (1971) ; United

States v. Overman, 424 F.2d 1142, 1146 (9th Cir.

1970) ; United States v. Kocher, 468 F.2d 503, 506-

507 (2d Cir. 1972), cert. denied, 411 U.S. 931

(1973). See also United States v. Eaves, 499 F.2d

869, 870-871 (10th Cir. 1974).

If the decision below is permitted to stand, the

government will be barred from foreclosing its valid

tax liens against property subject to state homestead

laws in those states in the Fifth (and now the Elev-

enth)* and Tenth Circuits where the nontaxpayer’s

* The decisions of the former Fifth Circuit, as that court

existed on September 30, 1981, handed down by that court

prior to the close of business on that date, are biading prece-

dent in the Eleventh Circuit. Bonner v. City of Prichard,

Alabama, 661 F.2d 1206, 1207 (11th Cir. 1981).

interest in the homestead is characterized by state

law as an estate in land, rather than as an exemption

from creditors. Our examination of state law indi-

cates that those states are Texas, Alabama, Missis-

sippi, Georgia, Louisiana,” Kansas, Oklahoma, and

Wyoming. Conversely, the government will be able

to enforce its lien in these circumstances in Florida,

New Mexico, Utah, and in all of the states in both

the Eighth and Ninth Circuits, which have refused to

subject the government’s statutory tax collection pre-

rogatives to the nuances of state homestead law.

Large amounts are potentially at stake. The Internal

Revenue Service advises that as a result of the deci-

sion below, revenue collection will be reduced by

$800,000 each year in Texas alone.

As we shall show, the differences in results within

the states of the Fifth (and now the Eleventh) and

Tenth Circuits rest upon distinctions in state law

that are entirely unrelated to the Internal Revenue

Service’s statutory tax collection authority under the

federal tax statutes. Similarly situated delinquent

taxpayers should be subject to the same remedies of

tax collection prescribed by Congress without regard

to their state of residence. The disparity in treatment

created by the decision below is unfair to tax-

payers and the Internal Revenue Service alike. Res-

1° Although the court of appeals had previously held that

the Louisiana homestead exemption laws were not effective

against federal tax liens (Carter v. United States, 399 F.2d

340, 342 (5th Cir. 1968)), the decision below interpreted

Carter to hold that the Louisiana homestead exemption did

not affect the validity of the government’s tax lien, but refused

to permit foreclosure of that lien. (See App. A, infra, 14a-l5a

&n.11.) We have therefore classified Louisiana as a state in

which the government will no longer be able to foreclose its

lien.

olution of the conflicts among the courts of appeals

on the questions presented is therefore necessary in

order to establish a uniform national rule governing

the Internal Revenue Service’s ability to foreclose tax

liens on a delinquent taxpayer’s interest in home-

stead property.

Finally, by holding that a federal court cannot

order the sale of property to enforce a tax lien that

concededly attaches to the interest of one of its own-

ers, the decision below severely impedes the govern-

ment’s tax collection authority in the Fifth and Elev-

enth Circuits in all cases where the delinquent tax-

payer’s assets are held jointly with other parties who

have no outstanding tax liabilities. Since the govern-

ment cannot enforce its tax liens against homestead

realty in the affected states as long as the nontax-

payer owner maintains a homestead interest that is

characterized by state law as an estate in land, the

Internal Revenue Service will be required to bear the

additional burden of monitoring delinquent accounts

to ascertain whether such homestead interests have

continued. Moreover, it will be necessary for the gov-

ernment to initiate litigation to reduce assessments

to judgment and to refile its liens under 26 U.S.C.

6323(g) to keep them current, in order to avoid the

expiration of the statute of limitations on collection

and to protect its interest against competing credi-

tors. The restrictions imposed by the decision below

upon the collection of concededly valid tax liabilities

represented by valid liens calls for review by this

Court.

1. Congress has prescribed that if any person neg-

lects or refuses to pay federal taxes, after assessment,

notice and demand, the amount of the unpaid taxes

“shall be a lien in favor of the United States upon

all property and rights to property, whether real or

personal belonging to such person” (26 U.S.C. 6321).

Generally, the Internal Revenue Code provides that

the lien “shall arise at the time the assessment is

made and shall continue until the liability for the

amount so assessed * * * is satisfied or becomes unen-

forceable by reason of lapse of time” (26 U.S.C.

6322).

A lien, however, is not self-executing but requires

enforcement if the tax assessment which it secures

is to be collected. Congress has therefore conferred

broad powers upon the Secretary of the Treasury

to take whatever administrative actions are neces-

sary to insure the collection of taxes from persons

whose accounts are delinquent. Thus, Section 7403

of the Code authorizes the Attorney General, at the

request of the Secretary of the Treasury, to bring

actic..s to enforce liens. Moreover, Section 6331(a)

of the Code authorizes the Secretary to collect un-

paid taxes by “levy upon all property and rights to

property * * * belonging to such person or on which

there is a lien * * *.” Section 6331(b) defines “levy”

to include “the power of distraint and seizure by any

means.” There are nine enumerated exemptions set

forth in Section 6334(a) for property exempt from

levy." The list of exemptions is extremely narrow

and is intended to be exclusive. Accordingly, Section

6334(c) provides that “[n]otwithstanding any other

1! The nine exemptions are: (1) wearing apparel and school

books; (2) fuel, provisions, furniture and personal effects not

exceeding $500 in value; (3) books and tools of a trade; (4)

unemployment benefits; (5) undelivered mail; (6) certain an-

nuity and pension payments; (7) workmen’s compensation ;

(8) judgments for support of minor children; and (9) mini-

mum exception for wages, salary, and other income.

law of the United States, no property or rights to

property shall be exempt from levy other than the

property specifically made exempt by subsection (a).”

Section 6334 of the Code has its roots in comparable

statutory provisions dating back more than a cen-

tury. See Rev. Stat. 3187, 3188 (1878 ed.) ; Sections

3691 and 3692 of the Internal Revenue Code of 1939

(26 U.S.C. (1940 ed.)). Although the list of enum-

erated exemptions from levy has been modernized in

the 1954 codification, and the Tax Reform Acts of

1969 and 1976, Congress reaffirmed in 1954 the fun-

damental principle that “[p]rovisions of State law

cannot grant an exemption from levy, and this sub-

section makes it clear that no other provision of Fed-

eral law shall exempt property from levy.” S. Rep.

No. 1622, 83d Cong., 2d Sess. 578 (1954); H.R. Rep.

No. 1337, 83d Cong., 2d Sess. A409 (1954).

This Court has accordingly interpreted the Internal

Revenue Service’s statutory authority to levy upon

the property of a delinquent taxpayer in the light

of Congress’s intention that the enumerated list in

Section 6334(a) shall constitute the sole source of

exemptions from levy. As a unanimous Court ob-

served in United States v. Mitchell, 403 U.S. 190, 205

(1971), with respect to Section 6334(c), “[t]his lan-

guage is specific and it is clear and there is no room

in it for automatic exemption of property that hap-

pens to be exempt from state levy under state law.

United States v. Bess, 357 U.S. 51, 56-57 (1958);

Shambaugh v. Scofield, 182 F.2d 345 (CA5 1942);

United States v. Heffron, 158 F.2d 657 (CAQ),

cert. denied, 331 U.S. 831 (1947); Treas. Reg.

§ 301.6334-1(c). See Birch v. Dodt, 2 Ariz. App. 228,

407 P.2d 417 (1965).” Accord: Fink v. O’Neil, 106

U.S. 272, 276 (1882).

The Court’s approving citations of the Ninth Cir-

cuit’s Heffron decision (both in Mitchell and previ-

ously in United States v. Bess, 357 U.S. 51, 57

(1958)) and of the Treasury Regulation are signifi-

cant. In Heffron, the court upheld our submission,

rejected by the court below, that a state homestead

law cannot insulate a delinquent federal taxpayer’s

interest in real property from forced sale, even where

another owner occupying the homestead has no out-

standing tax liabilities. The Treasury Regulation

cited by the Court is similarly explicit on the question

presented here. It states that “[n]Jo provision of a

State law may exempt property or rights to property

from levy from the collection of any Federal tax.

Thus, property exempt from execution under State

personal or homestead exemption laws is, neverthe-

less, subject to levy by the United States for collection

of its taxes’’ (emphasis supplied). Accord: United

States v. Heasley, supra; Herndon v. United States,

supra; Shaw v. United States, 331 F.2d 493 (9th Cir.

1964).

2. Despite the foregoing authorities, the court be-

low permitted the Texas homestead law to insulate

respondents from the Internal Revenue Service’s stat-

utory authority to seize, sell, or foreclose its lien upon

property to satisfy the unpaid liabilities of delinquent

taxpayers. Its rationale rests upon a two-step anal-

ysis. First, the court held that the Texas homestead

law created a present undivided interest in each

owner of the real property, and was not merely an

exemption from creditors. Second, the court held that

respondents’ interests in the properties could not be

reached by the government’s liens because they had

no outstanding tax liabilities. Rather, the delinquent

taxpayers were their deceased or former husbands

and only the husbands’ interests were subject to fore-

closure. However, since respondents had the right of

occupancy and use in the properties, the court con-

cluded that the district court could not order a sale

of the property in order to enforce the government’s

tax lien that admittedly attached to the husbands’

interests in the properties.”

We submit that, in relying upon the purported dis-

tinction between those homestead laws that create

a present interest and those that merely provide an

exemption from creditors,” the court below, and the

Tenth Circuit in Hershberger, erroneously focused on

respondents’ interests in the properties rather than

those of the delinquent taxpayers. It is, however, the

interests of the delinquent taxpayers, and not re-

spondents’ interests, that are subject to collection

under federal law for satisfaction of the unpaid tax

liabilities. The only relevant question to be asked

under state law is whether the taxpayers had inter-

ests in the property to which the liens attached.

Aquilino v. United States, 363 U.S. 509 (1960). And

it is undisputed that both taxpayers had interests in

the real properties to which the government’s liens

attached. The fact that respondents likewise had in-

12 The protection afforded respondents from foreclosure by

the decision below is not limited to the particular properties at

issue. Rather, the court below suggested that respondents

could exchange their homesteads for new homesteads without

having to satisfy the government’s lien (App. A, infra, 22a

n.17).

13 It was on this basis that the court below distinguished its

prior decision in Weitzner v. United States, 309 F.2d 45 (5th

Cir. 1962), cert. denied, 372 U.S. 913 (1963) (Florida home-

stead law that provides an exemption from creditors does not

insulate property from federal tax collection despite occupancy

of nontaxpayer spouse). See App. A, infra, 12a-14a & n.10.

terests in the properties did not serve to divest the

delinquent taxpayers of their interests or put those

interests beyond the reach of the tax collector.

Hence, the characterization of respondents’ inter-

ests under state law is entirely irrelevant. Indeed,

the fact that other parties share rights of possession,

ownership and control over property with a delin-

quent taxpayer does not automatically prevent the

United States from enforcing its tax lien against

such property. For example, in the case of commu-

nity property, such as the real property involved

here, not only may the government’s tax lien be en-

forced, but the entire property may be subjected to

the payment of either spouse’s federal tax liability.

Broday v. United States, 455 F.2d 1097, 1100-1101

(5th Cir. 1972) (applying to Texas community prop-

erty the rule in United States v. Mitchell, swpra) ;“

see also Mulcahy v. United States, 388 F.2d 300, 302

(5th Cir. 1968) ; United States v. Overman, 424 F.2d

1142 (9th Cir. 1970): In re Ackerman, 424 F.2d

1148 (9th Cir. 1970).

Moreover, given the exclusive character of the

enuinerated list of exemy;..ons set forth in Section

6334(a) of the Code (see page 12, supra), the par-

ticular characterization given a homestead exemption

under state law (property right vs. exemption) can

hardly be controlling, since Congress has not seen

fit to provide an exemption for homesteads, however

™ The court below sought to distinguish Broday on the

ground that it involved nonhomestead community property

(see App. A, infra, 18a n.15). But there is no basis for the

distinction. The principle applied by Broday is consistent

with our submission that a federal tax ‘ien can be enforced

against property in which both the tax'-«yer and a nontax-

payer have interests under state law.

characterized, from forced sale and foreclosure under

the internal revenue laws. Whatever policies may

underlie state homestead laws and their characteriza-

tion as interests in land or exemptions from private

creditors’ claims, they do not affect the federal tax

remedies available to the government under the In-

ternal Revenue Code. “Such state laws ‘are not laws

for the United States * * * unless they have been

made such by Congress itself’.” United States v. Bess,

supra, 357 U.S. at 57, quoting Fink v. O’Neil, supra,

106 U.S. at 276. As the Eighth Circuit properly con-

cluded in Herndon v. United States, supra, 501 F.2d

at 1223, “[t]he federal levying statute could be con-

sidered the ‘supreme law of the land’ in relation to

state exemption statutes. To hold otherwise would

allow states to create statutorily or otherwise present

property interests in homesteads so as to allow a

homestead to be exempt from a federal tax levy.”

3. In holding that the government could not fore-

close its liens on the real properties at issue by seek-

ing an order of sale of the property, the decision

below erroneously rests on the further ground that

respondents had no outstanding tax liabilities.“ As

the court saw the matter, a federal court in a fore-

closure action brought by the United States under

26 U.S.C. 7403 cannot enforce a federal tax lien by

ordering the sale of the property where there are

% The court below thereby distinguished its prior decisions

holding that the same Texas law did not insulate homestead

property from federal tax collection procedures on the ground

that both spouses had outstanding tax liabilities in those cases.

See Shambaugh v. Scofield, 182 F.2d 345, 346 (1942) ; United

States v. Dallas National Bank, 152 F.2d 582, 585 (1946),

modified on another ground, 167 F.2d 468-469 (1948); United

States v. Estes, 450 F.2d 62, 65 (1971). See App. A, infra,

12a; cf. App. B, infra, 30a.

joint owners of the property who are not delinquent

taxpayers.

But this conclusion—first adopted by the court be-

low in Folsom v. United States, 306 F.2d 361

(1962)—is expressly refuted by the language of Sec-

tion 7403(a), which broadly authorizes the Attorney

General to direct a civil action to be filed in a federal

district court “to enforce the lien of the United

States * * * with respect to such tax or liability or

to subject any poperty, o[f] whatever nature, of the

delinquent, or in which he has any right, title, or

interest, to the payment of such tax or liability”

(emphasis supplied). Moreover, Section 7403(b) re-

quires that “[a]ll persons having liens upon or claim-

ing any interest in the property” be made parties

to the action. Finally, Section 7403(c) empowers the

court to order “a sale of such property”—not the sale

of an “interest” in the property—and direct “dis-

tribution of the proceeds of such sale according to the

findings of the court in respect to the interests of the

parties and the United States.” Thus, the statute

expressly authorizes the district court to subject the

interests of persons other than the taxpayer (such as

respondents) to an involuntary sale in the course of

enforcing the government’s lien on the taxpayer’s

interest in the property.

It is therefore plain that Congress has authorized

the sale of property in which a delinquent taxpayer

has any interest, not simply property in which he has

the sole interest. The enforcement of federal tax liens

cannot, as the decision below erroneously concluded,

be confined to the sale of the delinquent taxpayer’s

interest in jointly held property. Indeed, as we have

pointed out (supra, page 9), in square conflict

with the court below, four other circuits have uni-

formly held that a federal district court can order

the sale of property to enforce a federal tax lien upon

a delinquent t2xpayer’s partial interest in the prop-

ert;. United Stuvtes vy. Trilling, 328 F.2d 699, 702-

703 (7th Cir. 1964); Washington v. United States,

402 F.2d 3, 6-7 (4th Cir. 1968), cert. denied, 402

U.S. 978 (1971); United States v. Overman, 424

F.2d 1142, 1146 (9th Cir. 1970); United States v.

Kocher, 468 F.2d 503, 506-507 (2d Cir. 1972), cert.

denied, 411 U.S. 931 (1973) ; see also United States v.

Eaves, 499 F.2d 869, 870-871 (10th Cir. 1974). As the

court below acknowledged (App. A, infra, 16a n.12),

“Tijn those circuits the government therefore is en-

titled to sell the entire joint tenancy property rather

than just the taxpayer’s interest therein.” Indeed, as

the Second Circuit observed in United States vy. Kocher,

supra, 468 F.2d at 507, if the government were

forced to acquire a delinquent taxpayer’s interest in

jointly held property, and then seek partition under

state law, it might well require separate lawsuits,

which would undoubtedly reduce the financial recov-

ery of the government and also injure the taxpayer,

insofar as the sale of his property interests would

yield a lesser amount.

Surely Congress did not intend the tax collector

to suffer delay by having to await the termination of

occupancy of a homestead, or having to assume part-

nership or other partial interests in property together

with a delinquent taxpayer’s spouse or co-owners, in

order to garner the uncertain yields of partition. In-

stead, to provide for prompt and efficient collection

of the revenues, Congress authorized the forced sale

of the entire property in which a delinquent tax-

payer has an interest.”

16 United States v. Boyd, 246 F.2d 477 (5th Cir. 1957), and

United States v. Morrison, 247 F.2d 285 (5th Cir. 1957), upon

which the court below relied (App. A, infra, 16a-17a), do not

CONCLUSION

The petition for writs of certiorari should be

granted. The Court may wish to consolidate the

cases.

Respectfully submitted.

Rex E. LEE

Solicitor General

GLENN L. ARCHER, JR.

Assistant Attorney General

Stuart A. SMITH

Assistant to the Solicitor General

WILLIAM S. ESTABROOK

WYNETTE J. HEWETT

Attorneys

FEBRUARY 1982

support the broad proposition that the district court has

equitable discretion to refuse to order a sale of property to

foreclose a valid tax lien that attaches to the interest of one

of the owners of the property. In Boyd, the court simply

indicated that the district court has discretion not to order

foreclosure if the lien did not exist or was junior to other liens,

or if the property did not belong to the taxpayer. In those

circumstances, “a decree of foreclosure would be neither ap-

propriate nor effective” (246 F.2d at 481). Similarly, the

reference to discretion in Morrison was addressed to the dis-

trict court’s ability in a quiet title action under 28 U.S.C.

2410 to “take whatever action is necessary to assure that the

Government’s lien is fully and effectually respected in accord-

ance with its established rank” (247 F.2d at 291). Under that

provision, a private party who brings an action that affects

property on which the United States has or claims a lien may

name the United States as a party.

-—xipueddy

APPENDIX A

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

UNITA

Nos. 79-3358, 80-1020

UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT

LUCILLE Mitzy Bosco RoGERrs, Individually and as

surviving spouse of PHILIP S. Bosco, ET AL.,

DEFENDANTS-APPELLEES

July 6, 1981

Appeals from the United States District Court

for the Northern District of Texas

Before CHARLES CLARK, TATE and WIL-

LIAMS, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

This case presents the interesting question whether

the federal government may foreclose a federal tax

lien on the Texas homestead of a delinquent taxpayer

in order to satisfy the delinquent taxpayer’s tax li-

ability, when the taxpayer’s spouse, also having an

interest in the homestead, has no federal tax liability.

I. Facts

The facts in this case are not in dispute. In 1955,

appellee Lucille Mitzy Bosco Rodgers * and her husband

1 Mrs. Rodgers’ name was inadvertently misspelled in the

caption of the case.

at that time, Philip S. Bosco, acquired as community

property a residence in Dallas, Texas, which they

occupied with their children as their homestead under

Texas law.’ In 1971 and 1972, the federal government

made assessments against Philip S. Bosco for federal

wagering taxes in the amount of $927,284.79, plus

penalties and interest, for the taxable years 1966

through 1971. When Philip S. Bosco died in 1974,

these taxes remained unpaid, as they do today. Mrs.

Rodgers herself has no federal tax liability.

After her husband’s death, Mrs. Rodgers continued

to occupy the residence as her homestead. Her chil-

dren of the marriage have since married and moved

to their own homes. Mrs. Rodgers has remarried

and now resides in the residence with her second

husband. She plans to continue to maintain the resi-

dence as her homestead. At the time this suit was

filed, she held no property that belonged to her

deceased husband other than the homestead and

certain personal property of less than $500.00 in

value.

On September 23, 1977, the government instituted

this suit in the United States District Court for the

Northern District of Texas in order to: (1) reduce

to judgment the tax assessment made against Mrs.

Rodgers’ deceased husband; (2) enforce the federal

tax liens against all the property that belonged to

the deceased taxpayer, including his interest in the

Texas homestead of Mrs. Rodgers; and (3) obtain

a deficiency judgment for any unsatisfied amount of

the tax liability of the deceased taxpayer. Appellees,

Mrs. Rodgers, her two adult children, and the execu-

tor of her deceased husband’s estate, moved for sum-

? See Tex. Const. art. XVI, §§ 50-52.

mary judgment on the ground that the federal tax

liens may not defeat Mrs. Rodgers’ interest in the

homestead. They also asserted that they were en-

titled to recover, under 42 U.S.C. $1988 (1976),

attorney’s fees in the amount of $3,000.00. The

government filed a cross-motion for partial summary

judgment on the questions whether the federal tax

lien could be enforced against the homestead and

whether appellees, defendants below, were entitled

to recover attorney’s fees.

On August 2, 1979, the district court denied the

government’s motion and granted summary judgment

in favor of appellees. The court also awarded appel-

lees attorney’s fees in the amount of $3,000.00. The

government filed notice of appeal from the district

court’s summary judgment ior appellees together

with the award of attorney’s fees. The government

then filed a second appeal of the district court’s

amended judgment after the district court granted the

government’s motion to alter or amend the district

court’s earlier judgment to one of on'y partial judg-

ment in favor of appellees. This change in the judg-

ment has no relevance to the substantive issues on

appeal. These two appeals have been consolidated be-

fore us.° We now address the propriety of the sum-

mary judgment for and attorney’s fees award to

appellees separately.

*In addition, this case was consolidated for oral argument

with the separate case of Ingram V. City of Dallas Department

of Housing and Urban Rehabilitation, slip op. p. 8754, ——

F.2d —— (5th Cir. 1981), which involved the enforcement

of a federal tax lien against a Texas homestead when one

spouse was solely liable for one federal tax and both spouses

were liable for a separate, second federal tax.

Il. Lien Foreclosure

Under the Internal Revenue Code of 1954, if a

taxpayer neglects or refuses to pay federal taxes

upon assessment, notice, and demand by the govern-

ment, a lien arises upon “all property and rights

to property” belonging to the delinquent taxpayer.

26 U.S.C. §§ 6321, 6322 (1976). The Secretary of

the Treasury or his delegate may bring an action

to enforce a tax lien “to subject any property, of

whatever nature, of the delinquent, or in which he

has any right, title, or interest . . .” to the payment

of his taxes. Id. § 7403(a).

The questions of whether and to what extent a

taxpayer has “property” or “rights to property” are

determined under the applicable state law. Slodov v.

United States, 436 U.S. 238, 256, n.19, 98 S.Ct. 1778,

1789 n.19, 56 L.Ed.2d 251 (1978) ; Aquwilino v. United

States, 363 U.S. 509, 512-13, 80 S.Ct. 1277, 1279-80,

4 L.Ed.2d 1365 (1960); Broday v. United States,

455 F.2d 1697, 1099 (5th Cir. 1972). Once it has

been determined under state law that the taxpayer

owns property or rights to property, however, fed-

eral law controls for the purpose of determining

whether a lien will attach to and be enforceable

against such property or rights to property. United

States v. Mitchell, 403 U.S. 190, 204-05, 91 S.Ct.

1763, 1771-72, 29 L.Ed.2d 406 (1971); Broday v.

United States, 455 F.2d at 1099.

The realty involved in this case was, at the time

of the attachment of the federal tax liens, the com-

munity property of Mrs. Rodgers and the now-

taxpayer under Texas law. See Tex. Fam.

Code Ann. § 5.01 (Vernon 1975). Each spouse there-

fore owned an undivided one-half interest in the

property. Free v. Bland, 369 U.S. 63, 82 S.Ct. 1089,

8 L.Ed.2d 180 (1962). In addition, the land was

also the Boscos’ homestead. Under Texas law, home-

stead property possesses different attributes and

confers different interest to each spouse than does

nonhomestead property.* Unlike nonhomestead prop-

erty in Texas, a Texas homestead, whether the sepa-

rate property of either spouse or community property,

is exempt from forced sale, may not be alienated

except on consent of both spouses, and, to the extent

consistent with federal law, may not be encumbered

by liens other than purchase money, property tax,

and materialmen’s liens. Tex. Const. art. XVI, § 50;

Tex.Fam.Code Ann. §5.81 (Vernon 1975). The

homestead also may not, on the death of one of the

spouses, be partitioned among the deceased spouse’s

heirs during the life-time of the surviving spouse, so

long as the surviving spouse chooses to occupy it as

a homestead, or so long as the guardian of the minor

children may be permitted by law to occupy it. Tex.

Const. art. XVI § 52. Each spouse possesses these in-

terests in the homestead separately and distinctly

from those of the other spouse.

Having determined that the deceased delinquent

taxpayer had an undivided one-half interest in the

homestead community property under Texas law, we

turn now to federal law to determine whether the

federal tax liens attached to and may be executed

against his property interest, notwithstanding the

lack of tax liability on the part of his spouse, Mrs.

Bosco, now Mrs. Rodgers, and the absence of any tax

liens on her undivided one-half interest in the prop-

erty.

* See also the related discussion, infra, addressing the ques-

tion whether the Texas homestead pru isions merely grant an

exemption from creditors, or instead confer a property right.

The resolution of this case would have been greatly

simplified had the property in this case been merely

community property, without also being homestead

property, since it is clear that nonhomestead cor -

munity property may be reached by the government

for the tax debts of either spouse. See Broday v.

United States, 455 F.2d 1097 (5th Cir. 1972) (levy

upon Texas community property checking account

to satisfy antenuptial federal tax debt of one spouse).

The presence of a tax liability limited to only one

spouse would have been irrelevant.

This case, however, is complicated by the combined

facts that the property involved is also homestead

property and that only one spouse has federal tax

liability. As one commentator points out:

[T }here is a conflict in the cases as to whether a

tax lien is valid upon a homestead interest. It

has been held that the states cannot carve out

homestead exemptions from the effect of the

Federal tax liens. The resolution of this issue

may depend upon whether there is involved a

single interest of the taxpayer who is subject to

tax liability, or whether both spouses have an

interest while only one is under a tax liability.

9 J. Mertens, Law of Federal Income Taxation § 54.52

(1977) (footnotes omitted). Thus, contrary to the

government’s assertion, the presence of homestead

property in this case renders inapplicable the rule of

Broday, supra, which involved nonhomestead rather

than homestead community property.’

5 We also distinguish, for the same reason, United States v.

Mitchell, 403 U.S. 190, 91 S.Ct. 1763, 29 L.Ed.2d 406 (1971),

United States v. Dallas Nat. Bank, 152 F.2d 582 (5th Cir.

1945), modified on other grounds, 164 F.2d 489 (5th Cir.

1947), and Davis v. Birdsong, 275 F.2d 113 (5th Cir. 1960).

In Mitchell, the Supreme Court held that the government

In analyzing the issue before us, we note at the

outset that the homestead interest of a taxpayer

sp use, i.e., that of one who himself has tax liability,

clearly cannot by itself defeat a federal tax lien.

Section 6334(a) of the Internal Revenue Code of

1954, 26 U.S.C. § 6334(a) (1976), specifies certain

property that is to be exempt from a levy to satisfy

federal tax liability. Homestead property is not

could collect delinquent taxes of a married Louisiana couple

from the wife’s one-half interest in their community property,

even though the wife had, after the dissolution of the mar-

riage, “renounced” her community “gains” under Louisiana

law. In Dallas Nat. Bank, this Court allowed the enforcement

of a federal tax lien against the delinquent taxpayer’s income

obtained from a testamentary trust of which she was a bene-

ficiary and which contained, among other things, the testator’s

homestead. Finally, in Davis, this Court held that, in order

to collect the “transferee liability” of a widow, as a trans-

feree of assets from her deceased husband’s estate, for the

income tax liability of her deceased husband, the government

could execute a tax lien on the nonhomestead realty that had

been set aside under Georgia law to the taxpayer’s widow

as “year’s support.” Since these cases did not involve fore-

closure of tax liens on homestead property, they do not con-

trol in the instant case.

* Section 6334(a) provides, in pertinent part:

Enumeration.—There shall be exempt from levy—

(1) Wearing apparel and school books. * * *;

(2) Fuel, provisions, furniture, and personal effects.

(3) Books and tools of a trade, business, or profession.

*-* *.

(4) Unemployment benefits. * * *.

(5) Undelivered mail. * * *.

(6) Certain annuity and pension payments. * * *.

(7) Workmen’s compensation. * * *.

(8) Judgments for support of minor children, * * *.

(9) Minimum exemption for wages, salary, and other

income, * * *.

26 U.S.C. § 6834(a) (1976).

listed in § 6334(a) as exempt property. The Code

further provides, in § 6334(c) :

standing any other law of the United States, no

property or rights to property shall be exempt

from levy other than the property specifically

made exempt by [§ 6334 (a) ].

26 U.S.C. § 6334(c) (1976). Section 6334(c) thus

would preclude the classification of homestead prop-

erty as exempt property under § 6334(a). This con-

clusion is made clear by § 301.6334-1(c) of the Treas-

ury Regulations promulgated by the Commissioner

of Internal Revenue under the Code:

rights to property are exempt from levy except

the property specifically exempted by section

6334(a). No provision of a State law may ex-

empt property or rights to property from levy

for th2 collection of any Federal tax. Thus,

property exempt from execution under State

personal or homestead exemption laws is, never-

theless, subject to levy by the United States for

collection of its taxes.

26 C.F.R. § 301.6334-1(c) (1980). Hence, the fed-

eral tax liens in this case clearly attached to the

deceased taxpayer spouse’s interest in the realty

claimed as a homestead. They also undoubtedly could

be executed against that interest if his was the only

interest in the homestead, or if both spouses were

delinquent taxpayers and the liens had attached to

each spouse’s interest in the homestead. See United

States v. Estes, 450 F.2d 62 (5th Cir. 1971) ; Sham-

baugh v. Scofield, 132 F.2d 345 (5th Cir. 1942).

That the liens attached to the taxpayer spouse’s

homestead interest, however, does not necessarily

mean that they may be foreclosed or otherwise en-

forced in a particular manner.’ The authorities are

divided over the question whether the government

may execute a tax lien against a taxpayer spouse’s

interest in realty claimed as a homestead when the

other spouse, having an equal interest in the home-

stead property, has no tax liability. The Ninth Cir-

cuit has held, in United States v. Heffron, 158 F.2d

657 (9th Cir. 1947), cert. denied, 331 U.S. 831, 67

S.Ct. 1510, 91 L.Ed. 1845 (1947), that a federal tax

lien may be levied against a delinquent taxpayer

spouse’s one-half interest in the proceeds of the sale

by the trustee in bankruptcy of the California home-

stead of the bankrupt taxpayer and his spouse in

order to satisfy the taxpayer spouse’s tax liability.

Rejecting the nontaxpayer spouse’s effort to obtain

a $2,500.00 exemption provided under California law

from the amount of the taxpayer spouse’s one-half

interest levied upon, the court stated that exemptions

prescribed by state laws are “ineffective” againt fed-

eral tax liens. Jd. at 659.

The Eighth Circuit is in accord with the Ninth

Circuit’s holding and reasoning in Heffron. In both

United States v. Heasley, 283 F.2d 422 (8th Cir.

7 Compare Tillery v. Parks, 680 F.2d 775 (10th Cir. 1980),

in which the Tenth Circuit permitted attachment of a federal

tax lien on a taxpayer spouse’s one-half interest in the home-

stead notwithstanding the effect on the alienability of the

nontaxpuyer spouse’s one-half interest, with United States v.

Hershberger, 475 F.2d 677 (10th Cir. 1973), in which the

Tenth Circuit disallowed foreclosure, on the homestead to

satisfy the federal tax liability of taxpayer spouse, due to the

homestead interest of the nontaxpayer spouse.

10a

1960)and Herndon v. United States, 501 F.2d 1219

(8th Cir. 1974), the Eighth Circuit held that the

government may foreclose its tax lien on the tax-

payer spouse’s homestead interest in order to collect

that spouse’s unpaid taxes, notwithstanding the non-

taxpayer spouse’s interest in the homestead property.

The court in Heasley followed the reasoning in

Heffron that state homestead exemptions are of no

effect against federal tax liens. 283 F.2d at 427.

The Herndon court based its decision on its view that

the Code provisions, discussed above, ancillary regula-

tion, and supremacy clause of the United States Con-

stitution dictate such a result. 501 F.2d at 1223.

Other authorities have reached the opposite result

in determining whether the government may execute

a federal tax lien against the homestead interest of a

taxpayer spouse when the other spouse possesses an

equal interest in the homestead and he or she has no

tax liability. The Tenth Circuit has, in United States

v. Hershberger, 475 F.2d 677 (10th Cir. 1973),

adopted an analytical approach which focuses upon

the nature of the interest created by the particular

state’s homestead laws. The Tenth Circuit has made

a distinction between a homestead interest as an

exemption under state law and a homestead interest

as a property right under state law. Under this dis-

tinction, if a homestead is merely an exemption from

general creditors under state law, then the nontax-

payer spouse’s interest therein will not prevent execu-

tion of a federal tax lien upon the taxpayer spouse’s

interest in the homestead. United States v. Hersh-

berger, 475 F.2d at 682. If, however, state law

confers more than a mere exemption, and instead

raises a homestead interest to the status of a present

property: right, then a federal tax lien may not be

lla

foreclosed against the homestead property for as long

as the nontaxpayer spouse’s interest therein exists

under state law. Id. In Hershberger, the court, find-

ing that the Kansas homestead laws confer a present

property right rather than a mere exemption, held

that the government could not enforce its tax lien

against the Kansas homestead interest of the de-

linquent taxpayer spouse so long as the nontaxpayer

spouse maintained the property as her homestead,

due to the nontaxpayer spouse’s undivided one-half

property interest in the homestead. /d.*

This distinction has also been applied by the Ninth

Circuit. See Shaw v. United States, 331 F.2d 493,

497 (9th Cir. 1964) (finding a California homestead

to be mere exemption and, accordingly, that nontax-

payer spouse could not remove federal tax lien from

homestead as cloud upon her one-half interest). The

Eighth Circuit, however, has rejected the validity

of this distinction, and has also, as discussed supra,

disagreed with the view that a nontaxpayer spouse’s

interest in a homestead might defeat a federal tax

lien. See Herndon v. United States, 501 F.2d at

1222-23.

The government contends that the law in this Cir-

cuit is consistent with that of the Eighth Circuit and,

® Earlier, the Tenth Circuit had stated, in dicta in Jones v.

Kemp, 144 F.2d 478, 480 (10th Cir. 1944), that a nontax-

payer spouse has an indivisible, vested interest in a homestead

which, if the person’s marriage is valid so as to entitle him

or her to claim a homestead interest, cannot be subject to

levy and sale for the federal tax liability of the taxpayer

spouse. The court in Jones permitted foreclosure, however,

since the nontaxpayer spouse’s marriage was invalid and she

accordingly could not claim a homestead interest under Okla-

homa law.

12a

as reflected in Heffron, the Ninth Circuit.’ The gov-

ernment asserts that this Court’s decisions in Sham-

baugh v. Scofield and United States v. Estes, in which

we permitted federal levy on Texas homesteads,

shouid govern the instant case. We disagree. Both

Shambaugh and Estes are distinguishable from the

instant case. In each of those cases, both spouses

possessed federal tax liability. Hence, the federal

lien in each case attached to the homestead interests

of both spouses. The granting of lien foreclosure in

Shambaugh and Estes simply reflected the supremacy

of a federal tax lien over the homestead interest of

a delinquent taxpayer. In contrast, the case ai hand

involves the tax liability of only one spouse. The

tax liens here, therefore, attached only to the tax-

payer spouse’s interest in the homestead property;

the interest of the nontaxpayer spouse, Mrs. Bosco,

now Mrs. Rodgers, is free of any tax liens. Despite

this freedom, however, Mrs. Rodgers’ interest in the

homestead property obviously would be seriously af-

fected by any foreclosure on the interest of the

deceased taxpayer spouse. Shambaugh and Estes

therefore do not apply in the situation before us.

See Morgan v. Moynahan, 86 F.Supp. 522, 525 (S.D.

Tex. 1949).

This Court has previously dealt on one other oc-

casion with the attempt by the government to enforce

a federal tax .ien against the homestead interest of

a delinquent taxpayer spomse despite the equal inter-

* The law in the Ninth Circuit is somewhat unclear, since

the Ninth Circuit has used both the “homestead exemptions

are of no effect” approach of the Eighth Circuit, see United

States v. Heffron, 158 F.2d at 659, and the exemption-property

right distinction of the Tenth Circuit. See Shaw v. United

States, 331 F.2d at 497.

18a

est in the homestead of the other spouse and the ab-

sence of tax liability of the latter. On that occasion,

this Court utilized the distinction between an exemp-

tion and a property right subsequently employed by

the Tenth Circuit in Hershberger and the Ninth Cir-

cuit in Shaw. In Weitzner v. United States, 309 F.2d

45, 47-48 (5th Cir. 1962), cert. denied, 372 U.S. 913,

83 S.Ct. 727, 9 L.Ed.2d 720 (1963), this Court was

faced with facts identical in all relevant respects to

those in the instant case, except that a Florida home-

stead rather than a Texas homestead was involved.

In Weitzner, we first quoted with approval the state-

ment of one commentator that, although “‘[i]t is

well settled that state exemption laws do not protect

property against federal tax liens,’” id. at 47-48

(quoting 9 J. Mertens, Law of Federal Income Taxa-

tion § 54.52, at 102). the resolution of the issue

whether a federal tax lien is valid upon a homestead

interest “ ‘may depend upon whether there is involved

a single tax interest of the taxpayer who is subject

to tax liability, or whether both spouses have an in-

terest while only one spouse is under tax liability.’ ”

Id. (quoting 9 J. Mertens, Law of Federal Income

Taxation § 54.52, at 102). We then stated that “[i]f

it is determined that a wife does not have, during the

lifetime of her husband, a property right in a home-

stead ..., we need proceed no further and the Gov-

ernment should prevail.” Jd. at 48 (emphasis added).

Finding that a Florida homestead interest was an ex-

emption rather than a property right under Florida

law, id., we allowed the government to foreclose its

tax lien against the taxpayer spouse’s interest in the

homestead property despite the nomtaxpayer spouse’s

homestead interest. Although we did not expressly

indicate what the probable outcome would have been

ld4a

had the Florida homestead laws conferred a property

right rather than merely creating an exemption, our

reasoning implied that foreclosure of the lien would

not, have been permitted in such event."

This position that foreclosure of a federal tax lien

on 2 homestead will be denied when the nontaxpayer

spouse has a present property right in the homestead

property under state law is consistent with the rea-

soning and holdings of analogous cases of this Cir-

cuit. In Carter v. United States ex rel. D. I. R., 399

F.2d 340 (5th Cir. 1968), this Court disallowed fed-

eral levy in an action by a nontaxpayer spouse to

enjoin the government from foreclosing its tax lien

on the interest of her delinquent taxpayer spouse in

their Louisiana homestead, owned equally by the tax-

payer and herself. In doing so, we reasoned as fol-

lows:

[A]s an undivided one-half interest in the prop-

erty was owned by the [nontaxpayer spouse],

separate and apart from her husband, the [gov-

ernment] cannot now attempt to seize and sell

this interest on the theory that it comprises part

of the husband’s estate. The [government] is

precluded from asserting title to property al-

legedly in the estate of the debtor husband when

that property never formed part of his estate.

The undivided one-half interest of the [nontax-

1 This implication was correctly seen by the Tenth Circuit

in United States v. Hershberger, 475 F.2d at 682. Relying in

part upon Weitzner, the Hershberger court properly refused

federal levy in the same factual setting when the homestead

laws of the state involved in that case did create a property

right in the nontaxpayer spouse opposing tie levy of the tax

lien.

15a

payer spouse] is, therefore, immune from seizure

and sale by the [government].

Id. at 343."

Further, this Court held, in Folsom v. United

States, 306 F.2d 361 (5th Cir. 1962), that because

of the property interests of other cotenants, the gov-

ernment may not foreclose its federal tax lien on the

one-sixth cotenancy interest of a delinquent taxpayer

in nonhomestead realty. In language which applies

with equal validity to the situation in the instant

case, we said:

The Government has a right to pursue the prop-

erty of the taxpayer with all the force and fury

at its command and by proper procedure obtain

the last vestige of title and every right which

such taxpayer owns. The law does not authorize

the Government, however, in its pursuit, to force

1! The government notes that we also stated in Carter that

“the Louisiana homestead exemption laws are not effective

against federal tax liens. . . .” 399 F.2d at 342. The govern-

ment reasons from this statement that the Texas homestead

laws in the instant case are ineffective in every respect against

the federal tax liens involved here. The government, however,

has failed to read this language in the context of the entire

sentence. Follo.ving this language, we then said, in the same

sentence: “and, thus, the filing of the homestead exemption by

[the nontaxpayer spouse] and her husband did not affect or

destroy the validity of the government’s tax lien.” /d. (foot-

note omitted) (emphasis added). When the sentence is read

as a whole, one can see that the Louisiana homestead exemp-

tion laws were not “effective” to the extent or in the sense

that they did not “affect or destroy the validity” of the gov-

ernment’s liens. This statement is merely a reiteration of the

rule, discussed supra, that a federal tax lien prevails when

posed against the taxpayer spouse’s homestead interest stand-

ing alone.

16a

a public sale of the property of other joint

owners. . . . The Government is not a joint

owner or tenant in common and does not have

the property rights incident to such a relation-

ship.

Id. at 267. Underlying our reasoning was the view

ot this Circuit that, when a delinquent taxpayer

shares his ownership interest in property jointly with

other persons rather than being the sole owner, his

“property” and “rights to property” to which the

federal tax lien attaches under 26 U.S.C. § 6321,

and on which federal levy may be had under 26

U.S.C. § 7403(a), involves only his interest in the

property, and not the entire property. Jd.*

Finally, we point out that courts are not compelled

to foreclose a federal tax lien when the government

brings a foreclosure action. Instead, Congress in-

tended for courts to exercise their equitable powers

in deciding whether to allow such foreclosure. United

12 Other circuits, taking the opposite view, have held that

the government may reach the entire “property” in which

the taxpayer has an “interest” rather than being limited

merely to his “interest” in the property. In those circuits

the government therefore is entitled to sell the entire joint

tenancy property rather than just the taxpayer’s interest

therein. See United States v. Trilling, 328 F.2d 699, 702-03

(7th Cir. 1964); Washington v. United States, 402 F.2d 3,

6-7 (4th Cir. 1968), cert. denied, 402 U.S. 978, 91 S.Ct. 1641,

29 L.Ed.2d 145 (1971); United States v. Overman, 424 F.2d

1142, 1146 (9th Cir. 1970) ; United States v. Kocher, 468 F.2d

503, 506-07 (2d Cir. 1972), cert. denied, 411 U.S. 931, 93

S.Ct. 1897, 36 L.Ed.2d 390 (1973); see also United States v.

‘Eaves, 499 F.2d 869, 870-71 (10th Cir. 1974), approving

Trilling, but concluding that the question whether the entire

joint tenancy property or only the taxpayer’s interest therein

is to be sold should be resolved by the district court exercising

its discretion.

17a

States v. Boyd, 246 F.2d 477, 481 (5th Cir. 1957),

cert. denied, 355 U.S. 889, 78 S.Ct. 261, 2 L.Ed.2d

188 (1957) ; United States v. Morrison, 247 F.2d 285,

289-90 (5th Cir. 1957).

Accordingly, in this Circuit, when the federal gov-

ernment seeks to enforce a tax lien against the home-

stead interest of a delinquent taxpayer, and his or

her spouse has no tax liability, the outcome of the

case will turn on whether the homestead laws of the

particular state merely create an exemption from

general creditors or whether they instead confer a

present property right in the person possessing the

homestead interest.” If a homestead interest is merely

an exemption under state law, federal levy may be

had upon the taxpayer spouse’s homestead interest

despite the equal interest of the nontaxpayer spouse.

If, on the other hand, a homestead interest is, under

state law, a property right, possessed by the non-

taxpayer spouse at the time the lien attaches to the

taxpayer spouse’s interest,"* then the federal tax lien

18 The court in Herndon v. United States, 501 F.2d at 1221-

22, inaccurately characterized the law in the Fifth Circuit

on this point. That court incorrectly portrayed this Circuit

as being in agreement with the position, adopted by the Hern-

don court, that a federal tax lien may be foreclosed in the

situation involved in this case regardless of the nature of the

interest created by the state’s homestead laws. Id.

4 The homestead interest must be a present property right

at the time the lien attaches to the taxpayer spouse’s home-

stead interest rather than a future property interest or one

acquired after lien attachment. Thus, for example, the future

interests of the taxpayer spouse’s heirs or devisees which

become present possessory interests upon the nontaxpayer

spouse’s death, and the homestead interest in the property

of any subsequent spouse of the nontaxpayer spouse, may not

defeat the feders’ tax lien once the nontaxpayer spouse’s

homestead interes. nas ceased to exist under state law.

18a

may not be foreclosed against the homestead property

for as long as the nontaxpayer spouse maintains his

or her homestead interest under state law." To make

this determination in the case at hand, we must

analyze Texas law on the nature of a homestead in-

terest in that state.

45In Broday v. United States, this Court deciined to use

the distinction between an exemption and a property right

under state law in the context of enforcing a federal tax lien

against the nonhomestead community property interest of

the nontaxpayer spouse of a delinquent taxpayer. Quoting

United States v. Overman, 424 F.2d at 1145 (federal tax lien

enforced against community property—the nature of which is

not indicated—of Washington couple for tax liability of one

spouse), the Broday case stated that “all that section 6321

requires is that the interest be ‘property’ or ‘rights to prop-

erty.’ It is of no statutory moment how extensive may be

those rights under state law, or what restrictions exist in the

enjoyment of those rights.” 455 F.2d at 1101 (citation

omitted). The court concluded that “the right of the United

States to enforce its liens does not depend upon state laws

which regulate the rights of creditors generally and does not

depend upon whether the ‘exemption’ label is attached to the

particular statute in question.” Id.

Although this language in Broday would suggest that the

exemption-property right distinction should not be employed

in the instant case as well, Broday involved nonhomestead

community property, in contrast to Weitzner, which did in-

volve homestead community property and which relied on the

exemption-property right distinction to resolve the suit. Fur-

ther, the language in Broday has since been cited in only one

federal case, Short v. United States, 395 F.Supp. 1151, 1154

(E.D. Tex. 1975), a case similar to Broday in that it too in-

volved nonhomestead community property. Moreover, the rule

in Weitzner is consistent with our holdings in Carter and

Folsom. Additionally, the language in Broday viewed nar-

rowly, is actually dicta, since this Court specifically found

that the state statute involved in that case was an exemption

statute. 455 F.2d at 1101. We therefore follow the exemption-

property right distinction used by this Court in Weitzner.

19a

Although there are some cases to the contrary,”

the overwhelming weight of the authority in Texas

In Foster v. Johnson, 89 Tex. 640, 645, 36 S.W. 67, 69

(1896), the Texas Supreme Court stated:

The homestead right [of the surviving spouse] under the

constitution was not an estate in land, but simply a right

to use and occupy it for a specified purpose, upon the

contingency that it would cease whenever it was not

occupied and used for that purpose.

Several decades later, the Texas Supreme Court, relying on

Foster and the similar case of Lee v. McFarland, 19 Tex.

Civ. App. 292, 46 S.W. 281 (1898, writ ref’d) (citing Foster),

again stated:

[U]nder the law, [testator’s widow] could use the home

place so long as she saw fit to occupy same as a homestead.

This is not an estate. When the home place ceased to be

used as a homestead, the interest owned therein by her

deceased husband would go to the devisees described in

the will.

Dakan v¥. Dakan, 125 Tex. 305, 83 S.W.2d 620, 625 (1935)

(citations omitted). The statement in Dakan that a homestead

is not an “estate” was later cited by the court in White v.

Glenn, 138 S.W.2d 914, 919 (Tex. Civ. App.—Amarillo 1940,

writ dism’d judgmt cor.).

Viewed in isolation, these cases tend to suggest that a Texas

homestead interest is not a property right under Texas law.

Closer analysis of Texas law, however, reveals that, for

several reasons, the above four cases do not reflect Texas law

on the nature of a Texas homestead interest. First, the state-

ment in Foster, on which the other three cases ultimately

relied for the proposition that a homestead is not an “estate,”

was itself made on a somewhat weak foundation, in light of

language of the Texas Supreme Court in a case, Stallings v.

Hullum, 89 Tex. 431, 35 S.W. 2 (1896), decided the same

year as Foster. In Stallings, the Texas Supreme Court held

that an attempted conveyance by a husband alone of a home-

stead did not convey the wife’s interest nor did it even trans-

fer the husband’s one-half interest as soon as the land ceased

to be the couple’s homestead. Significantly, the T»xas Supreme

Court stated:

20a

law holds that a Texas homestead interest is a prop-

erty right in the nature of an estate in land. In

Woods v. Alvarado State Bank, 118 Tex. 586, 19

S.W.2d 35 (1929), the leading Texas case, the Texas

Supreme Court initially set out the distinction be-

tween a homestead interest as an exemption and one

as a property right:

Generally it may be said that there are two

concepts of the effect of constitutional and statu-

tory provisions relating to the homestead. One

is that these laws confer a mere privilege of

exemption, which operates to prevent the use of

the process of the court to sell certain property

for the payment of debts. The other is that the

homestead right is considered an estate in land

vested in the person designated by law.

It is not simply the alienation of the homestead right—

that is to say the right of occupancy—that is prohibited

[by Tex. Const. art. XVI, § 50] ; it is the alienation of the

property itself, the land or the lots, as the case may be

* * * The mere privilege of possession and enjoyment is

not the measure of her right in the homestead.

35 S.W. at 3 (emphasis added). The italicized portion of this

quotation places into serious question the weight to be accorded

the statement in Foster, quoted supra, that the Texas home-

stead right is merely one of use and occupancy.

Second, aside from reliance on one another, none of the

above four cases has been cited by either the Texas Supreme

Court or lower Texas state courts for the proposition, ad-

vanced by each of the four cases, that a Texas homestead is

not an “estate.” ;

Finally, the above four cases are contrary to the majority

of Texas cases on the subject of the nature of a Texas home-

stead interest, including the Texas Supreme Court’s most

recent pronouncement, in O‘Neil v. Mack Trucks, Inc., 542

S.W.2d at 114, that “[i]t is well established that the home-

stead right, when fixed, is an estate in land... .”

2la

19 S.W.2d at 35. After engaging in an extensive and

thorough analysis of the historical development of the

Texas homestead laws, the Texas Supreme Court con-

cluded:

[W Jhen the constitutional provisions and statutes

relating to the homestead are analyzed, we think

the conclusion is inescapable that their purpose

and effect is to create estates as distinguished

from mere privileges of exemption or possession.

19 S.W.2d at 37 (emphasis added).

The Texas Supreme Court reiterated this view of a

Texas homestead interest as being a property right

in the nature of an estate in land, in Paddock v.

Siemoneit, 147 Tex. 571, 218 S.W.2d 428 (1949):

In Texas, we have held that the homestead is to

be regarded as an estate created not only for

the protection of the family as a whole, but for

the units of the family. The wife has a vested

estate in the land of which she cannot be divested

during her life except by abandonment or a vol-

untary conveyance in the manner prescribed by

law.

218 S.W.2d at 436 (emphasis added). The great

majority of other Texas cases are in accord with this

position. See, e.g., O’Neil v. Mack Trucks, Inc., 542

S.W.2d 112, 114 (Tex. 1976), recalled on other

grounds, 551 S.W.2d 32 (Tex. 1977) (“homestead

right, when fixed, is an estate in land exempt from

execution”); Rancho Oil Co. v. Powell, 142 Tex. 63,

175 S.W.2d 960, 965 (1943) ; Cocke v. Conquest, 120

Tex. 43, 35 S.W.2d 673, 678 (1931) (estate in land) ;

Sargeant v. Sargeant, 118 Tex. 343, 15 S.W.2d 589,

593 (1929); Hargadene v. Whitfield, 71 Tex. 482,

22a

9 S.W. 475 (1888); W. 7. Rawleigh Co. v. Blackwell,

48 S.W.2d 754 (Tex. Civ. App.—Amarillo 1932, writ

dism’d); Sparks v. Robertson, 203 S.W. 622, 623

(Tex.Civ.App.—Austin 1947, writ ref’d); Crews v.

General Crude Oil Co., 287 S.W.2d 243 (Tex.Civ.

App.—-Beaumont 1955, no writ); Norman v. First

Bank & Trust, Bryan, 557 S.W.2d 797 (Tex.Civ.

App.—Houston [1st Dist.] 1977, writ ref’d n. r. e.).

In Evans v. Mills, 67 F.2d 840 (5th Cir. 1933),

this Court defined the nature of a Texas homestead

interest under Texas law in the same terms that the

Texas cases have employed:

A homestead interest in Texas is not, as in some

states, a mere exemption. It is a title in the

land, of which, according to the settled public

policy of the state, the owner may not be deprived

except by abandonment or by the conveyance

executed as required by statute.

Id. at 841 (citations omitted).

In light of the above authority, we must conclude

that a Texas homestead interest is more than an ex-

emption from the claims of general creditors under

Texas law. It is an undivided, vested property right

in land. Under our rationale in Weitzner and the

analogous cases of Carter and Folsom, it follows that

the government in the instant case may not foreclose

its federal tax liens on the homestead interest of the

deceased taxpayer—and thus on the homestead prop-

erty at all—for as long as Mrs. Rodgers, the non-

taxpayer spouse, complies with the requirements of

Texas law for maintaining one’s homestead.” Mrs.

17 Included in these laws would be, for example, those

relating to the exchange of one’s homestead for a new home-

stead. See, e.g., Eliis v. Light, 73 S.W. 551 (Tex. Civ. App.

1903, writ ref’d).

23a

Rodgers’ undivided one-half interest in the homestead

property vested when the property was purchased

during her marriage with the deceased taxpayer and

continued under Texas law“ after his death.” This

interest was, and continues to be, a property right

separate and apart from that of her deceased hus-

band, and may not at present effectively be destroyed,

as would be the result, by federal levy on the one-half

interest held by the deceased taxpayer during his

lifetime. The district court therefore correctly

granted summary judgment to appellees on the issue

of foreclosure of the federal tax liens on the home-

stead property involved here.

II. Attorney’s Fees

The government’s second contention is that the

district court abused its discretion in awarding attor-

ney’s fees to appellees under 42 U.S.C. § 1988 (1976).

We agree.

The Civil Rights Attorney’s Fees Awards Act of

1976 provides, in pertinent part:

{I]n any civil action or proceeding, by or on

behalf of the United States of America, to en-

force, or charging a violation of, a provision of

the United States Internal Revenue Code, .. .

the court, in its discretion, may allow the prevail-

ing party, other than the United States, a reason-

able attorney’s fee as part of the costs.

42 U.S.C. § 1988 (1976). In order for a taxpayer

to be eligible te recover attorney’s fees under § 1988

1% Tex. Const. art. XVI, § 52.

*® Under Texas law, it is clear that Mrs. Rodgers’ remar-

riage did not affect the homestead status of her interest in the

property. See Rancho Oil Co. v. Powell, 142 Tex. 63, 175

S.W.2d 960 (1943).

24a

in his tax dispute with the government, he must be

the defendant in the lawsuit. Prince v. United States,

610 F.2d 350, 352 (5th Cir. 1980) ; Key Buick Co. v.

C. I. R., 613 F.2d 1306, 1308-09 (5th Cir. 1980). To

recover attorney’s fees, the defendant taxpayer must

demonstrate that the government’s action was frivo-

lous, unreasonable, or without foundation, although

he need not show subjective bad faith. Jones v.

United States, 613 F.2d 1311, 1313 (5th Cir. 1980).

In the case before us, appellees, defendants below,

failed to show even the slightest justification for the

attorney’s fee award that they requested and received.

There is no evidence whatsover that the government’s

action was frivolous, unreasonable, or without foun-

dation. To the contrary, the substantive legal issue

in this case was complex and difficult to resolve. The

government had ample justification for bringing this

suit, even though our decision is not in its favor.

We therefore are compelled to conclude that the dis-

trict court acted outside of its discretion in awarding

attorney’s fees to appellees. We reverse the district

court on this point.

To summarize, we affirm the district court’s grant-

ing of summary judgment to appellees on the issue

whether the government may execute its federal tax

liens on the Texas homestead involved here, but re-

verse the district court’s award of attorney’s fees to

appellees.

AFFIRMED IN PART AND REVERSED IN

PART.

25a)

APPENDIX B

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

Unit A

No. 79-3888

JOERENE INGRAM and LAUREL A. BATES, TRUSTEE,

PLAINTIFFS-APPELLANTS

CITY OF DALLAS DEPARTMENT OF HOUSING &

URBAN REHABILITATION, ET AL., DEFENDANTS

UNITED STATES OF AMERICA

(INTERNAL REVENUE SERVICE),

DEFENDANT-APPELLEE

July 6, 1981

Appeal from the United States District Court

for the Northern District of Texas

Before CHARLES CLARK, TATE and WIL-

LIAMS, Circuit Judges.

JERRE S. WILLIAYS, Circuit Judge:

This case involves an appeal from the summary

judgment granted the federal government in the gov-

ernment’s undertaking to foreclose its federal tax

liens on the Texas homestead of one of appellants,

Joerene Ingram, and her former spouse, Donald In-

gram, for the sole tax liability of Donald Ingram

relatinig to one federal tax and the joint tax liability

26a

of Donald and Joerene Ingram relating to another

federal tax.

During their marriage, Donald and Joerene In-

gram acquired, as community property, a residence

located in Dallas, Texas. They claimed this property

as their homestead under Texas law. See Tex. Const.

Art. XVI, §§ 50-52.

In 1972 and 1973, assessments were made under

§ 6672 of the Internal Revenue Code of 1954, 26

U.S.C. § 6672 (1976), against Donald Ingram, Presi-

dent of Dallas Auto Damage Appraisers, Inc.

(DADA), as the person responsible for the collection

and payment of social security and withholding taxes

from the wages of the employees of DADA. The

assessments related to unpaid taxes withheld from

wages of employees of DADA from the first quarter

of 1971 through the second quarter of 1972. After

payments on account of these liabilities were made,

there remains unpaid $9,330.51, plus interest.

In 1973, an assessment was made in the amount

of $283.33, plus interest, against both Donald In-

gram and Joerene Ingram relating to their unpaid

income tax for the taxable year 1971. This amount

remains unpaid at present.

On March 19, 1975, around which time the In-

grams were seeking a divorce, the Ingram’s residence

was destroyed by fire. The home was insured and the

proceeds of the policy, approximately $50,000, were

deposited into the registry of a Texas Domestic Re-

lations Court. On September 3, 1975, the Ingrams

obtained a divorce. Joerene Ingram was awarded

custody of the two children of the marriage. In con-

nection with the divorce, the Ingrams entered into

a property settlement agreement in which they agreed

to the disposition of their community property, in-

27a

cluding the real property claimed as their home-

stead. After the payment of sums previously ap-

proved by the state Domestic Relations Court, the

Ingrams agreed to divide the balance of the proceeds

equally. They further agreed that Donald Ingram

would convey his interest in the real property to

Joerene Ingram in exchange for $1,500.00, to be paid

from the proceeds of the sale of the property. With

respect to their taxes, the Ingrams agreed that they

would file separate income tax returns for the tax-

able year 1974, that Donald Ingram would pay any

income tax on joint income for 1974, and that he

would “hold Wife harmless for any deficiencies or

assessments for the years 1971 through 1973.”

The real property was conveyed to Laurel Bates,

as trustee for Joerene Ingram. Joerene Ingram tried

to sell the property, but was unable to find a pur-

chaser for it. Joerene Ingram then received notice

from the City of Dallas Department of Housing and

Urban Rehabilitation that unless she complied with

local ordinances the remains of the fire-damaged resi-

dence would be demolished. Following a hearing,

notice requiring demolition was given. Joerene in-

gram and Laurel Bates, appellants here, then in-

stituted this suit in Texas state court to quiet title

to the property, to remove the liens, and to enjoin

demolition of improvements located on the property.

The defendants were the United States, the City of

Dallas Department of Housing and Urban Rehabili-

tation, and several creditors claiming an interest in

the property.’

After the suit was removed to the United States

District Court for the Northern District of Texas,

1 White Rock National Bank, Northpark National Bank,

and E. M. Kahn & Company.

28a

the government counterclaimed against appellants and

Donald Ingram, added as a defendant on the counter- -

claim, for, inter alia, foreclosure of the tax liens for

the sole liability of Donald Ingram for unpaid with-

holding taxes and for the joint liability of Donald

and Joerene Ingram for unpaid income taxes. The

government also cross-claimed against the other

creditors. Appellants then sought summary judg-

ment against the government and the other creditors

on the ground that, as Joerene Ingram’s homestead

the property was insulated from creditors’ claims.

Pursuant to a stipulation of the parties that ap-

pellants’ legal position would not be prejudiced there-

by, the property was sold and the proceeds, approxi-

mately $16,250.00, were placed in an escrow account

pending the outcome of this suit. The stipulation

also disposed of all claims except those of the gov-

ernment and E. M. Kahn & Company, a defendant

creditor. The government opposed appellants’ mo-

tion for summary judgment on the ground that, in

view of the division of the first insurance proceeds

by the Ingrams and their intent, as allegedly re-

flected in the divorce decree, to sell the property,’

2 Defendant E. M. Kahn & Company claimed an interest in

the property by virtue of its judgment lien in the amount of

$389.42, plus costs, obtained on August 13, 1974. Defendant

White Rock Bank disclaimed any interest in the property,

and defendant Northpark National Bank failed to answer the

complaint. The City of Dallas Department of Housing and

Urban Rehabilitation consented to the sale of the property

and agreed that the purchaser would bear responsibility for

complying with local ordinances.

® The Ingrams’ property agreement incident to their divorce

provided in part that Joerene Ingram was to receive all title

and interest in the real property that had been the Ingrams’

residence, “subject to the payment to [Donald Ingram] of the

sum of $1,500.00 from the proceeds of the sale [of the prop-

erty] when sold.” (Emphasis added).

29a

there were material questions of fact concerning

whether the property remained Joerene Ingram’s

homestead. In addition, the government sought sum-

mary judgment on its counterclaims against Joerene

and Donald Ingram on the ground that even if the

property were a homestead, the state homestead ex-

emption laws were ineffective against the federal tax

liens.* The district court denied appellants’ motion

for summary judgment and granted, without expla-

nation, the government’s cross-motion for summary

judgment on its counterclaims.’ Appellants seek re-

view of this judgment.

Today this Court has decided United States v.

Rogers, slip opinion page 8740, —— F.2d —— (5th

Cir. 1981), a case similar to the one at hand in that

it too involved an attempt by the government to fore-

close its federal tax liens on Texas homestead prop-

erty to collect unpaid taxes. In Rogers, we discussed

at length the law in this and other circuits regarding

the enforceability of federal tax liens on state home-

stead property. Those legal principles are equally

valid with respect to the instant case. Accordingly,

if both spouses have federal tax liability, and the

federal tax assessment was made against both

spouses, then the government may foreclose its tax

lien against the homestead property owned equally by

the spouses. United States v. Estes, 450 F.2d 62 (5th

Cir. 1971); Shambaugh v. Scofield, 182 F.2d 345

*The government also sought summary judgment on its

cross-claims against the remaining creditors on the ground

that the sole creditor asserting a claim against the property,

E. M. Kahn & Co., acquired its judgment lien after notices of

the tax liens had been filed.

* The court also granted summary judgment to the gov-

ernment on its cross-claims against the other creditors.

30a

(5th Cir. 1942). If only one spouse is liable for the

federal taxes for which the assessment was made and

the lien arose, however, then the question whether

the federal government may execute that lien on

homestead property of the taxpayer and his or her

nontaxpayer spouse depends upon the nature of the

homestead interest under state law. If a homestead

interest is merely an exemption from general credi-

tors under state law, then federal levy may be had.

If, however, state law confers a present property

right to a person possessing a homestead interest,

then the lien may not be foreclosed for as long as the

nontaxpayer spouse maintains his or her homestead

interest under state law. United States v. Rogers,

slip opinion page 8743, —— F.2d at ——; Weitzner

v. United States, 309 F.2d 45, 47-48 (5th Cir. 1962),

cert. denied, 372 U.S. 913, 83 S.Ct. 727, 9 L.Ed.2d

720 (1963); see also United States v. Hershberger,

475 F.2d 677, 682 (10th Cir. 1973). Since a Texas

homestead interest is a property right under Texas

law, see United States v. Rogers, slip opinion page

8751, —— F.2d at , the government could not

levy a tax lien on a nontaxpayer spouse’s homestead

for as long as she maintained her homestead interest

under Texas law.

Applying these principles to the instant case, it is

clear that the government may foreclose its tax lien

on the proceeds from the sale of the homestead prop-

erty to collect the $283.33, plus interest, for the un-

paid isicome tax owed by both Joerene and Donald

Ingram. Both Joerene Ingram and Donald Ingram

are liable for this tax. Therefore, under Estes and

Shambaugh, any homestead interest Joerene Ingram

may have in those proceeds is subordinate to the

government’s lien relating to that tax. Since there

3la

is no genuine issue of material fact on this point, the

district court acted correctly in granting summary

judgment in favor of the government for levy of the

lien for the unpaid income tax. We affirm this por-

tion of the district court’s decision.

The district court erred, however, in granting sum-

mary judgment to the government to the extent that

the summary judgment also permitted the govern-

ment to execute its lien relating to the $9,330.51,

plus interest, in unpaid withholding taxes assessed

against Donald Ingram. Only Donald Ingram is li-

able for these taxes; Joerene Ingram has no liability

with respect to them. Accordingly, under Rogers and

Weitzner, the government could not reach the pro-

ceeds of the sale of the realty to collect this sum,

assuming Joerene Ingram maintained her homestead

interest in the property under Texas law.

There appears from the record, however, a genuine

issue of whether Joerene Ingram in fact maintained

her homestead interest se as to entitle her to assert

it now. Under Texas law, homestead property is

“abandoned,” or loses its homestead character, if the

use of the property is discontinued without the in-

tention of returning to it again. Long Bell Lumber

Co. v. Miller, 240 S.W.2d 405, 407 (Tex. Civ. App.—

Amarillo 1951, no writ). The Ingrams’ division of

the fire insurance proceeds,® their speculative intent,

* The mere fact that the Ingrams’ residence was destroyed

by fire and that the Ingrams received insurance proceeds

for the loss did not in itself destroy the Ingrams’ homestead

interest. Under Texas law, proceeds of an insurance policy

on a Texas homestead are exempt from levy by the same

provisions of the Texas Constitution that exempt the home-

stead itself; the proceeds stand in the place of that which

has been destroyed. Lee v. Honea, 349 S.W.2d i110, 111 (Tex.

Civ. App.—Forth Worth 1961, writ ref’d n.r.e.) ; Johnson Vv.

Hall, 163 S.W. 399, 402 (Tex. Civ. App..—Texarkana 1914, no

32a

as reflected in their divorce agreement,’ to sell the

property, and Joerene Ingram’s subsequent efforts to

sell the property—which, we note, began before the

stipulation of the parties that she could do so—-raise

the fact question whether Joerene Ingram had aban-

doned the homestead and lost her homestead interest.

Since there is a genuine issue of a material fact con-

cerning the existence of Joerene Ingram’s asserted

homestead interest, the district court erred in grant-

ing summary judgment to the government with re-

spect to the enforcement of the tax lien relating to

the $9,330.51 in unpaid withholding taxes, plus in-

terest. We accordingly reverse this part of the dis-

trict court’s judgment and remand for a trial to

determine whether Joerene Ingram continues to pos-

sess a homestead interest which she may assert

against federal levy for her former husband’s federal

withholding tax liability.

For the foregoing reasons, the judgment of the

court below is AFFIRMED IN PART AND RE-

VERSED AND REMANDED IN PART.

writ). The insurance policy proceeds are exempt from levy

for a period of six months from the date when the insured

had the right te demand payment from the insurance com-

pany. Walter Connally & Co. v. Hopkins, 195 S.W. 656, 661

(Tex. Civ. App.—Texarkana 1917), aff’d, 221 S.W. 1082

(Tex. Comm’n App. 1920, holding approved).

We cannot determine from the record the date on which

the Ingrams had the right to demand payment for their fire

loss from their insurance company. We thus cannot deter-

mine whether the six-month grace period under Texas law for

using the insurance proceeds to rebuild the homestead resi-

dence or to reinvest in a new one expired prior to the district

court’s order on January 31, 1979, allowing appellants to sell

the property without incurring any prejudice to their legal

rights in the litigation.

7 See note 3, supra.

33a

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Nos. 79-3358 & 80-1020

D.C. Docket No. CA-3-77-1291-C

UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT

versus

LUCILLE Mitzy Bosco RoceErs, Individually and as

surviving spouse of Philip S. Bosco, ET AL.,

DEFENDANTS-APPELLEES

Appeal from the United States District Court

for the Northern District of Texas

Before CHARLES CLARK, TATE and WILLIAMS, Cir-

cuit Judges.

JUDGMENT

_ This cause came on to be heard on the transcript

of the record from the United States District Court

for the Northern District of Texas, and was argued

by counsel;

ON CONSIDERATION WHEREOF, It is now

here ordered and adjudged by this Court that the

judgment of the said District Court in this cause be,

and the same is hereby, affirmed in part and re-

versed in part;

34a

IT IS FURTHER ORDERED that plaintiff-appei-

lant pay to defendants-appellees the costs on appeal,

to be taxed by the Clerk of this Court.

July 6, 1981

Issued As Mandate: Oct. 8, 1981

A true copy

Test:

GILBERT F. GANUCHEAU

Clerk

U.S. Court of Appeals

Fifth Circuit

By /s/ Betty G. Martinez

Deputy

New Orleans, Louisiana

85a

APPENDIX D

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 79-3888

D.C. Docket No. CA-3-77-0798-C

JOERENE INGRAM and LAUREL A. BATES, Trustee,

PLAINTIFFS-APPELLANTS

versus

CiTy OF DALLAS DEPARTMENT OF HOUSING &

URBAN REHABILITATION, ET AL., DEFENDANTS

UNITED STATES OF AMERICA,

(INTERNAL REVENUE SERVICE),

DEFENDANT-APPELLEE

Appeal from the United States District Court

for the Northern District of Texas

Before CHARLES CLARK, TATE and WILLIAMS, Cir-

cuit Judges.

JUDGMENT

This cause came on to be heard on the transcript

of the record from the United States District Court

for the Northern District of Texas, and was argued

by counsel ;

ON CONSIDERATION WHEREOF, It is now

here ordered and adjudged by this Court that the

36a

judgment of the said District Court in this cause be,

and the same is hereby, affirmed in part and re-

versed in part; and that this cause be and the same

is hereby remanded in part to the said District Court

in accordance with the opinion of this Court;

IT IS FURTHER ORDERED that defendant-ap-

pellee pay to plaintiffs-appellants the costs on appeal,

to be taxed by the Clerk of this Court.

| July 6, 1981

Issued As Mandate: Oct. 8, 1981

A true copy

Test:

GILBERT F. GANUCHEAU

Clerk

U.S. Court of Appeals

Fifth Circuit

By /s/ Betty G. Martinez

Deputy

New Orleans, Louisiana

87a

APPENDIX E

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

UNIT A

79-3358

No. 80-1020

UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT

versus

LUCILLE MITZy Bosco RocErs,

DEFENDANTS-APPELLEES

Filed Sep. 28, 1981

Appeal from the United States District Court

for the Northern District of Texas

ON SUGGESTION FOR REHEARING EN BANC

(Opinion July 6, 1981, 5 Cir., 198—, —— F.2d ——)

(September 28, 1981)

ORDER:

(X) Treating the suggestion for rehearing en banc

as a petition for panel rehearing, it is ordered that

the petition for panel rehearing is DENIED. No

member of the panel nor Judge of this Administra-

38a

tive Unit in regular active service having requested

that the Court be polled on rehearing en bane (Rule

35, Federal Rules of Appellate Procedure; Local

Fifth Circuit Rule 16; Fifth Circuit Judicial Council

Resolution of January 14, 1981), the suggestion ior

Rehearing En Banc is DENIED.

ENTERED FOR THE COURT:

/s/ J.S. Williams

United States Circuit Judge

39a

APPENDIX F

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

UNIT A

No. 79-3888

JOERENE INGRAM and LAUREL A. BATES, TRUSTEE,

PLAINTIFFS-APPELLANTS

versus

CiTy OF DALLAS DEPARTMENT OF HOUSING &

URBAN REHABILITATION ET AL., DEFENDANTS

UNITED STATES OF AMERICA,

(INTERNAL REVENUE SERVICE),

DEFENDANT-APPELLEE

Filed Sep. 28, 1981

Appeal from the United States District Court

for the Northern District of Texas

ON SUGGESTION FOR REHEARING EN BANC

(Opinion July 6, 1981, 5 Cir., 198—, —— F.2d ——)

(September 28, 1981)

ORDER:

(X) Treating the suggestion for rehearing en banc

as a petition for panel rehearing, it is ordered that

40a

the petition for panel rehearing is DENIED. No

member of the panel nor Judge of this Administra-

tive Unit in regular active service having requested

that the Court be polled on rehearing en banc (Rule

35, Federal Rules of Appellate Procedure; Local

Fifth Circuit Rule 16; Fifth Circuit Judicial Council

Resolution of January 14, 1981), the suggestion for

Rehearing En Banc is DENIED.

ENTERED FOR THE COURT:

/s/ J.S. Williams

United States Circuit Judge

4la

APPENDIX G

Internal Revenue Code of 1954 ( 26 U.S.C.) :

SEc. 6334. PROPERTY EXEMPT FROM LEVY.

(a) Enumeration.—There shall be exempt from

levy—

(1) Wearing apparel and school books.—

Such items of wearing apparel and such

school books as are necessary for the tax-

payer or for members of his family;

(2) Fuel, provisions, furniture, and per-

sonal effects.—If the taxpayer is the head

of a family, so much of the fuel, provisions,

furniture, and personal effects in his house-

hold, and of the arms for personal use, live-

stock, and poultry of the taxpayer, as does

not exceed $500 in value;

(3) Books and tools of a trade, business,

or profession.—So many of the books and

tools necessary for the trade; business, or

profession of the taxpayer as do not exceed

‘in the aggregate $250 in value;

(4) [as added by Section 406, Social Se-

curity Amendments of 1958, Pub. L. No. 85-

840, 72 Stat. 1013, and amended by Section

104(c) (1), Federal Tax Lien Act of 1966,

Pub. L. No. 89-719, 80 Stat. 1125] Unem-

ployment benefits.—Any amount payable to

an individual with respect to his unemploy-

ment (including any portion thereof payable

with respect ‘to dependents) under an un-

employment compensation law of the United

States, of any State, or of the District of

-Columbia or of the Commonwealth of Puerto

Rico.

42a

(5) [as added by Section 812, Excise Tax

Reduction Act of 1965, Pub. L. No. 89-44,

79 Stat. 36] Undelivered mail.—Mail, ad-

dressed to any person, which has not been

delivered to the addressee.

(6) [as added by Section 104(c) (2),

Federal Tax Lien Act cf 1966, Pub. L. No.

89-719, 80 Stat.] Certain annuity and

pension payments.—Annuity or pension pay-

ments under the Railroad Retirement Act,

benefits under the Railroad Unemployment

Insurance Act, special pension payments re-

ceived by a person whose name has been

entered on the Army, Navy, Air Force, and

Coast Guard Medal or Honor roll (38 U.S.C.

562), and annuities based on retired or re-

tainer pay under chapter 73 of title 10 of

the United States Code.

(7) [as added by Section 104 (c. 2),

Federal Tax Lien Act of 1966, Pub. L. No.

89-719, 80 Stat. ——] Workmen’s Com-

pensation.—Any amount payable to an in-

dividual as workmen’s compensation (in-

cluding any portion thereof payable with

respect to dependents) under a workmen’s

compensation law of the Commonwealth of

Puerto Rico.

(8) [as added by Section 945(a), Tax

Reform Act of 1969, Pub. L. No. 91-172,

83 Stat. 487, and amended by Section 1209

(c), Tax Reform Act of 1976, Pub. L. No.

94-455, 90 Stat. 1520] Judgments for sup-

port of minor children.—If the taxpayer is

required by judgment of a court of compe-

tent jurisdiction, entered prior to the date of

levy, to contribute to the support of his

minor children, so much of his salary, wages,

48a ‘

or other income as is necessary to comply

with such judgment.

(9) [as added by Section 1209(a) Tax

Reform Act of 1976, Pub. L. No. 91-172, 83

Stat. ——], Minimum Exemption for wages,

salary, and other income.—Any amount

payable to or received by an individual as

wages or salary for personal services, or as

income derived from other sources, during

any period, to the extent that the total of

such amounts payable to or received by him

during such period does not exceed the ap-

plicable exempt amount determined under

subsection (d).

* * * * *

(ec) No Other Property Exempt. —Notwithstand-

ing any other law of the United States, pe prop-

erty or rights to property shall be exempt from

levy other than the property specifically made

exempt by subsection (a).

Sec. 7408. AcTION TO ENFORCE LIEN OR TO

SUBJECT PROPERTY TO PAYMENT OF TAX.

(a) Filing.—In any case where there has

been a refusal or neglect to pay any tax, or to

discharge any liability in respect thereof, whether

or not levy has been made, the Attorney General

or his delegate, at the request of the Secretary

may direct a civil action to be filed in a district

court of the United States to enforce the lien of

the United States under this title with respect

to such tax or liability or to subject any prop-

erty, of whatever nature, of the delinquent, or in

which he has any right, title, or interest, to the

payment of such tax or liability. For purposes

44a

of the preceding sentence, any acceleration of

payment under section 6166(g) shall be treated

as a neglect to pay tax.

(b) Parties —All persons having liens upon

or claiming any interest in the property involved

in such action shall be made parties thereto.

after the parties have been duly notified of the

action, proceed to adjudicate all matters involved

therein and finally determine the merits of all

claims to and liens upon the property, and, in all

cases where a claim or interest of the United

States therein is established, may decree a sale

of such property, by the proper officer of the

court, and a distribution of the proceeds of such

sale according to the findings of the court in

respect to the interests of the parties and of the

United States. If the property is sold to satisfy

a first lien held by the United States, the United

States may bid at the sale such sum, not exceed-

ine the amount of such lien with expenses of

sale, as the Secretary or his delegate directs.

(d) Receivership.—In any such proceeding, at

the instance of the United States, the court may

appoint a receiver to enforce the lien, or, upon

certification by the Secretary or his delegate dur-

ing the pendency of such proceedings that it is

in the public interest, may appoint a receiver

with all the powers of a receiver in equity.

Treasury Regulations on Procedure and Administra-

tion (1954 Code) (26 C.F.R.):

§ 301.6334-1 Property exempt from levy.

45a

rights to property are exempt from levy except

the property specifically exempted by section

6334(a). No provision of a State law may ex-

empt property or rights to property from levy

for the collection of any Federal tax. Thus,

property exempt from execution uncer State per-

sonal or homestead exemption laws is, neverthe-

less, subject to levy by the United States for

collection of its taxes.

® ©. 8. covennment paimtine orice; 1962 ses27s 776

uonIsoddg

* § Offise-Supreme Court

7“ FILED

NO. 81-1476

In The

Supreme Court of the United States

October Term, 1981

Unrrep STATES OF AMERICA,

Petitioner

Vv.

Lucitiz Mitzi Bosco RoceErs, ET AL.,

Respondent

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED COURT OF APPEALS

FOR THE FIFTH CIRCUIT

RESPONDENT'S BRIEF IN OPPOSITION

Ww. D. Exuiorr

Moore & Peterson

2400 One Dallas Centre

Dallas, Texas 75201 ‘“w,

(214) 651-1721

Counsel for Respondent

YAR B 1982

U.S

TABLE OF AUTHORITIES

Adickes v. S. H. Kress & Co., 398 U.S. 144 (1970)

Aquilino v. United States, 363 U.S. 509 (1960) ... 3.

Carter v. United States ex rel. D.I.R., 399

F.2d 340 (5th Cir. 1968) . es

Cook v. Burnley, 78 U.S. (11 Wall.) 659 (1867) .. Ss

Hopt v. Utah, 114 U.S. 488 (1885)

Post v. Jones, 60 U.S. (19 How.) 150 (1856) ......

Russell v. Southard, 53 U.S. (12 How.) 139 (1851) ....

United States v. Bess, 357 U.S. 51 (1958) .............

United States v. Boyd, 246 F.2d 477 (5th Cir.),

cert. denied, 355 U.S. 899 (1957). ...........

United States v. Brosnan, 363 U.S. 237 (1960) ...........

United States v. Durham Lumber Co., 363

U.S. 522 (1960) .

United States v. ecco 247 F.2d 285 (th

Cir. 1957) Sacislapcieupaeibaladabaseaptinssceecacsttetained ies

Statutes:

Internal Revenue Code of 1954 (26 waned

Section 7403(c) .....

In The

Supreme Court of the Finited States

October Term, 1981

No. 81-1476

Unrrep States or AMERICA,

Petitioner

Lucitzz Mirzi Bosco Rocers, &T AL.,

Respondent

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED COURT OF APPEALS

FOR THE FIFTH CIRCUIT

RESPONDENT’S BRIEF IN OPPOSITION

The respondent, Lucitttz Mrrzi Bosco Ropcrrs, respect-

fully requests that this Court deny the petition for writ of

certiorari, seeking review of the opinion of the Fifth Circuit

in this case. That opinion is reported at 649 F.2d 1117.

QUESTION PRESENTED

With all due respect, the Solicitor General misperceived

the issue in this case, which is:

1. Whether the exercise by the District Court of equitable

discretion authorized by Congress [26 U.S.C. §7403(c)] is

+The respondent’s mame was inadvertently misspelled in the

caption of the case.

reviewable, when the Government did not claim in the Court

of Arpeals that the District Court abused its discretion, and

the record reflects facts supporting the exercise of discretion

by the District Court.

REASONS WHY THE WRIT SHOULD BE DENIED

1. Review is inappropriate, because the District Court

had statutory discretion, exercised its discretion

on competent evidence, and the Government did

not contend in the Court of Appeals that the District

Court abused such discretion.

The sole issue in this case is whether the Supreme Court

should review the exercise of discretion by the District Court.

Based on competent evidence, the District Court held, pur-

suant to Section 7403(c) of the Internal Revenue Code of

1954, as amended, 26 U.S.C. §7403(c) (App. A, infra la),

that the Government could not enforce the federal tax lien

of Respondent’s delinquent and deceased taxpayer husband,

who was solely responsible for the tax liability, by foreclosing

on the homestead property interest of Respondent, the non-

taxpayer wife who had no tax liability. At no time in this

controversy has the Government asserted that the District

Court abused its discretion in not ordering foreclosure of the

homestead of Respondent.

For the Supreme Court to review this case would violate

the Court’s ancient rule that it does not review discretionary

decisions of a lower court in the absence of a claim of abuse

of discretion. Cook v. Burnley, 78 U.S. (11 Wall.) 659 (1867) ;

Post v. Jones, 60 U.S. (19 How.) 150 (1956). It is also time-

honored that the Supreme Court does not review issues that

were not presented to the Court below.

Section 7403 (c) of the Code does not compel the District

Court to order foreclosure in this case. Congress simply pro-

vided that the District Court “may” decree a sale of the

property sought to be foreclosed to satisfy a tax debt. United

States v. Boyd, 246 F.2d 477, 481 (5th Cir.) , cert. denied, 355

U.S. 899 (1957); United States v. Morrison, 247 F.2d 285

(5th Cir. 1957).

Absent a Government claim in the Court of Appeals that

the District Court abused its equitable powers in refusing to

order foreclosure, this case does not present reviewable issues.

2. The suggested conflict of decisions does not warrant

a review by this Court, for each case properly de-

pends upon its own facts and the property rights

created by the laws of the various States.

The supposed conflict in the decisions, of which much is

made by the Government, is a natural and proper result of

our federal system. This Court has repeatedly looked to state

law in determining the extent of property and rights to prop-

erty to which a Government tax lien attaches. United States

v. Bess, 357 U.S. 51, 55 (1958); United States v. Brosnan,

363 U.S. 237, 240 (1960) ; Aquilino v. United States, 363 U.S.

509, 512-513 (1960). Conflicting decisions are therefore logical

and appropriate since the law of each state governs the extent

of the property and rights to property of the taxpayer used

to satisfy a federal tax lien.

The Government dramatically urges that the conflict be-

tween circuits necessitates a review by this Court.’ There is

no need to look for a conflict in decisions between the various

* The Government for the first time in this case asserts that this

case will result in $800,000 lost tax revenue from simply the State

of Texas in only one year. (Pet. p. 10). The record is devoid of any

support for the Government’s remarkable claim. Also, this Court

has consistently condemned this practice of first presenting factual

assertions to this Court. Russell v. Southard, 53 U.S. (12 How.)

139, 158-159 (1851); Hopt v. Utah, 114 U.S. 488, 491-492 (1885);

Adickes v S. H. Kress & Co., 398 U.S. 144, 157-158 n.16 (1970).

circuits. This Court merely has to look to different States

within the original Fifth Circuit Court of Appeals’ to find the

much-feared conflicting decisions. As the Fifth Circuit pointed

out below, its earlier decision of Weitzner v. United States,

309 F.2d 45 (5th Cir. 1962) , cert. denied, 372 U.S. 913 (1963),

presents the identical facts with those of the instant case,

except that a Florida homestead, rather than a Texas home-

stead was involved. The Fifth Circuit, however, examined

Florida law and found that a Florida homestead interest was

an exemption from creditors, rather than a property right.

The Court allowed the Government to foreclose its tax lien

against the taxpayer spouse’s interest in the homestead

property despite the nontaxpayer spouse’s homestead in-

terest. But when the Fifth Circuit was faced with a Texas

homestead in the instant case, or a Louisiana homestead in

Carter v. United States ex rel. D.I.R., 399 F.2d 340 (5th Cir.

1968), the Court of Appeals reached a different conclusion.

These different cases turn on the diversity of state law,

which this Court has observed present a situation that is

based upon logic and sound legal principles. Aquilino v.

United States, 363 U.S. 509, 514 (1960). Inasmuch as the

Government has unsuccessfully sought before to persuade

this Court that efficient tax administration requires over-

turning this Court’s gemstone rule that state laws must he

applied to ascertain taxpayers’ property rights, its argument

should again be rejected. Compare United States v. Durham

Lumber Co., 363 U.S. 522 (1960) with Aquilino v. United

States, 363 U.S. 509 (1960). Congress, by granting discre-

tion to the District Court, likewise recognized that varying

States laws and facts would result in differing decisions.

* Ignoring the Eleventh Circuit only for the purpose of this

discussion.

CONCLUSION

For the above reasons, the Petition for a Writ of Certiorari

should be denied.

Respectfully submitted,

Moore & Peterson

2400 One Dallas Centre

Dallas, Texas 75201

Counsel for Respondent

~ yypuaddly

APPENDIX A

Internal Revenue Code of 1954 (26 U.S.C.):

SEC. 7403. ACTION TO ENFORCE LIEN OR TO SUB-

JECT PROPERTY TO PAYMENT OF TAX.

(a) FILING. — In any case where there has been a re-

fusal or neglect to pay any tax, or to discharge any liability

in respect thereof, whether or not levy has been made, the

Attorney General or his delegate, at the request of the Secre-

tary, may direct a civil action to be filed in a district court of

the United States to enforce the lien of the United States

under this title with respect to such tax or liability or to

subject any property, of whatever nature, of the delinquent,

or in which he has any right, title, or interest, to the payment

of such tax or liability. For the purposes of the preceding

sentence, any acceleration of payment under section 6166 (g)

shall be treated as a neglect to pay tax.

(b) PARTIES. — All persons having liens upon or claim-

ing any interest in the property involved in such action shall

be made parties thereto.

shall, after the parties have been duly notified of the action,

proceed to adjudicate all matters involved therein and finally

determine the merits of all claims to and liens upon the

property, and, in all cases where a claim or interest of the

United States therein is established, may decree a sale of such

property, by the proper officer of the court, and a distribution

of the proceeds of such sale according to the findings of the

court in respect to the interests of the parties and of the

United States. If the property is sold to satisfy a first lien

held by the United States, the United States may bid at the

sale such sum, not exceeding the amount of such lien with

expenses of sale, as the Secretary directs.

JaUlg SJOUON Nag

| Office. Sunene han

- supreme , US.

FILED

JUN 15 1982

No. 81-1476 ALEXANDER L. STEVAS,

CLERK

In the Supreme Court of the Ginited States

OCTOBER TERM, 198i

UNITED STATES OF AMERICA, PETITIONER

LUCILLE Mitz! Bosco RODGERS, ET AL.

UNITED STATES OF AMERICA, PETITIONER

Vv.

JOERENE INGRAM, ET AL.

ON WRITS OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES

Rex E. Lee

Solicitor General

Gienn L. Arcuer, Jr.

Assistant Attorney General

Stuart A. SMITH

Assistant to the Solicitor General

Wituiam 8. Estaprook

Wynetre J. Hewett

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTIONS P™ESENTED

1. Whether the existence of a state homestead law in

a community property state exempts real preperty from

forced sale under the Internal Revenue Code to satisfy

the delinquent federal tax liability of one spouse, where

the other spouse occupying the homestead is not a delin-

quent taxpayer and where state law characterizes a

homestead interest as an estate in land.

2. Whether, in a foreclosure action brought by the

United States under Section 7403(c) of the Internal Reve-

nue Code, a federal court is empowered to order the sale

of homestead real property to enforce a federal tax lien

that attaches to a delinquent taxpayer’s interest in the

property, where the delinquent taxpayer’s spouse

occupying the homestead does not have outstanding tax

liabilities.

()

TABLE OF CONTENTS

eo a a ee ew he we

Il.

A state homestead law in a community property state

does not exempt real property from forced sale under

the Internal Revenue Code to satisfy the delinquent

federal tax liability of one spouse, where the other

spouse occupying the homestead is not a delinquent

taxpayer and where state law characterizes a home-

stead interest as an estate in land .................

A. Congress has vested the Commissioner of Internal

Revenue with broad power to collect delinquent

PLP: sbacecasusttasunbisudnence sence

B. State homestead laws do not insulate a taxpayer's

property from collection and forced sale to satisfy

Per eee ee

A federal court in a foreclosure action brought by the

United States under Section 7403(c) of the Internal Rev-

enue Code is empowered to order the sale of homestead

real property to enforce a federal tax lien that attaches

to a delinquent taxpayer’s interest in the property,

where the spouse occupying the homestead does not

have outstanding tax liabilities ....................

TABLE OF AUTHORITIES

Cases:

Ackezinan, In re, 424 F.2d 1148 ..............000.

Aquiline v. United States, 363 U.S. 509... 11-12, 21,

Bank of Texas v. Laguarta, 565 S.W.2d 363 ...... —

(IID

37, 42

35, 40

Cases—Continued Page

Bank of the United States v. Halstead, 23 U.S. (10

MLE RELL A Dae acon bs cebpadees’sseheseonys 22

Broday v. United States, 455 F.2d 1097 ........ sed 37

Buchan v. Buchan, 592 S.W.2d 367 ..............4. 39

Burk Royalty Co. v. Riley, 475 S.W.2d 566 ......... 38-39

Burnet v. Harmel, 287 U.S. 108 ...........0cceeeee 22

Burton v. Smith, 38 U.S. (13 Pet.) 464 ............. 15

Carter v. United States, 399 F.2d 340 ............4. 34

Cockerham v. Cockerham, 527 S.W.2d 162 .......... 37

Eggemeyer v. Eggemeyer, 554 S.W.2d 137 .......... 39

BD G, EAE, Fe ire GE cc ce ccssccccccccvccssce 31

Evans v. Mille, G7 F.2d 840 ......cccccccceccsceccs 39

Pe @; Bees A EE cecccnsicnscccccccence 10, 21

Folsom v. United States, 306 F.2d 361 ....... 12, 34, 41, 42

Glass City Bank v. United States, 326 U.S. 265 .. 15, 39-40

Herndon v. United States, 501 F.2d

DU 6b actcadceccennastanbecnees 5, 11, 12, 27, 28, 29, 45

Johnson v. Hall, 163 S.W. 399 ............ccceeeees 31

Jones v. Kemp, 144 F.2d 478 ........00ccceccceeeee

Kieferdorf v. Commissioner, 142 F.2d 723, cert. denied,

ein ha atkcce dah ehtees soesodens

Kyle v. McGuirk, 82 F.2d 212 ............eceeeeees

Lee v. Honea, 340 S.W.2d 110 ........ cc cece ccnnees

Love v. Hoffman, 499 S.W.2d 295, affg per curiam, 494

EL cncdnndeddn Ghapeedeedenc ese osetdces

Morgan v. Commissioner, 309 U.S. 78 ..........5+.

Mulcahy v. United States, 388 F.2d 300 ............

O’Neil v. Mack Trucks, Inc., 542 S.W.2d 112 .......

Paddock v. Siemoneit, 147 Tex. 571, S.W.2d 428 ....

Pan American Co. v. United States, 273 U.S. 456 ...

Randall v. H. Nakashima & Co., 542 F.2d 270 .....

Scaife Co. v. Commissioner, 314 U.S. 459 ..........

Shambaugh v. Scofield, 132 F.2d 345 ........... 25, 26,

Shaw v. United States, 331 F.2d 493 ...............

Sparks v. Robertson, 203 S.W.2d 622 ...............

Springer v. United States, 102 U.S. 586 ............

Tillery v. United States, 630 F.2d 775 ............-.

United States v. Acri, 348 U.S. 211 ...........0005-

Cnesee SES &

SERESERSES

Cases—Continued Page

United States v. Bess, 357 U.S.

Se eee 10, 15-16, 20, 21, 23, 25, 27, 31, 39

United States v. Boyd, 246 F.2d 477, cert. denied, 355

i Cr saictatextwed ¢4ntbManesenaveedssocn’ 43, 44, 45

United States v. Detroit Lumber Co., 200 U.S. 321 .. 45

United States v. Eaves, 499 F.2d 869 Ear pi rad wubse o¥ 13, 42

United States v. Estes, 450 F.2d 62 ................ 26

United States v. Halstead, 23 U.S. (10 Wheat.) 51 ... 22

United States v. Heasley, 283 F.2d 422 .......... 5, 11, 28

United States v. Heffron, 158 F.2d 657, cert. denied, 331

CGE sch ecnedeseiiedhbsksbdiedabubacs ve 5, 10, 25, 27

United States v. Hershberger, 475 F.2d 677 .... 5, 11, 34, 35

United States v. Kimbrell Foods, Inc., 440 U.S. 715 . 21

United States v. Kocher, 468 F.2d 503, cert. denied, 411

i, Mr os bedbiwe kisenewnsaneesese dine 13, 14, 26-27, 42

United States v. Mitchell, 403 U.S.

Bl cdanah olde ike bic ore e 10, 12, 24, 25, 27, 28, 36, 37, 38

United States v. Morrison, 247 F.2d 285 ........ 43, 44, 45

United States v. Musselman, 48 A.F .T.R,2d (P-H) 4 81-

6331 (S.D. Iowa Oct. 16, 1981) ........cccccccceee 28

United States v. Overman, 424 F.2d 1142 . 13, 26, 37, 41, 42

United States v. Raudry, 82-1 U.S.T.C. (CCH)® 9231

(W.D. Tex. Oct. 7, 1981), appeal pending, No. 82-1080

(filed Feb. 10, 1982 5th Cir.) ..............eeeee- 4i

United States v. Second National Bank of North Miami,

502 F.2d 535, cert. denied, 421 U.S. 912.......... 46

United States v. Snyder, 149 U.S. 210 .............. 22

United States v. Stutsman County Implement Co., 274

HL EE ct ck didadahcvGobuisnndhe hens s4aenneas 46

United States v. Trilling, 328 F.2d 699 .......... 13, 26, 42

Walter Connally & Co. v. Hopkins, 195 S.W. 656, affd,

SNUG GE nebncasdhsebdolsdnadhes c6cunewes 31

Washington v. United States, 402 F.2d 3, cert. denied,

PE ‘Adnoscen « cabesedbasvandewscvene 13, 26, 42

Wayman v. Southard, 23 U.S. (10 Wheat.) 1 ........ 22

Weitzner v. United States, 309 F.2d 45, eert. denied, 372

DT. can cneba Case denaeeeh shhssttotesredeces 35

Williams v. Williams, 569 S.W.2d 867 ............. 39-40

Cases—Continued Page

Woods v. Alvarado State Bank, 118 Tex. 586, 19S.W.2d

SD. bi cd bu wilibctecivedt< cane celibes ebeth eecdieiaind 39

Constitutions, statutes, regulations and rule:

United States Constitution, Art. I, Sec. 8 ........... 22

Act of July 14, 1798 ch. 75, 1 Stat. 597 et seq.:

I A SD 6 on coemebewe nds oes 04h hess 17

IED v cuvcccdbadpabeassoeeeseses 17

RE SE ME: b cinc nucuachounkesens dese 17

Act of Jan. 9, 1815, ch. 21, Section 26, 3 Stat. 173-174 18

Act of Mar. 2, 1861, ch. 68, Section 31, 12 Stat. 197 .. 18

Act of Aug. 5, 1861, ch. 45, Section 35, 12 Stat. 303-304 18

Act of June 30, 1864, ch. 173, Section 28 13 Stat. 232,

DE vnuedeeddnceusinetddds dine odtdaedteee 18

Act of Mar. 3, 1865, ch. 78, 13 Stat. 469, 471 ........ 18

Act of July 13, 1866, ch. 184, Section 9, 14 Stat. 101, 108 18

Excise Tax Reduction Act of 1965, Pub. L. No. 89-44

CP: EO Dic ct ccducvksacdcecdcesed 19

Federal Tax Lien Act of 1966, Pub. L. No. 89-719, Sec-

See Be, Ce ts BOE. ce ccvcccccdecdiecases 19

Internal Revenue Code of 1939 (26 U.S.C. (1940 ed.)):

SE Ki Wbbsw ec ddncuddocdbiccccccualecs 15

IED. SGbbhy oes cde cduedeadccteséctutoes 15

EE. 50 dobudbanccws dgudiblccedienées cave 9, 19

ES eee ee 9, 19

Internal Revenue Code of 1954 (26 U.S.C.)

DE iccoUie te davGneekuesdescedse 9, 15, 21, 36

DT iiss puvolkeliodubbes theceteactasut 15, 21

SEED. sé Gusdvecds wikvudtveces csdbevecuen 15, 21

OE GID «6 oc bi idcivcccccccssteeceweuss 32

ED UING a de'cdrtictwieecccecseccabunns 35, 36

emia GID oo oes sc vec senwoccccces 9, 16, 35, 36, 45

IED. Kc cove nctcudncanes<cccdsecdaseeen 9, 16

GD oss 6c 0cadcbedddvdsecevastigess 2, 9, 36, 45

Section 6334(a) ..............45. 4, 9, 10, 16, 17, 30, 37

BOW TIRED iis csc cccccscccecccccvcess 4, 9, 10, 16

Constitutions, statutes, regulations and rule—Continued Page

ee Tr eee) Creer a) eee 6

Section 7403 ....... 2 5, 9, 12, 34, 35, 36, 41, 42, 43, 45

Se Pr Mer here 12, 16, 41

Boctien FORD snd cc cidecbicc db deecQeh itis 13, 27, 41, 42

Social Security Amendments of 1958, Pub. L. No. 85-840,

ee UE OE io on oe ehck ans denednes 19

Tax Reform Act of 1969, Pub. L. No. 91-172, Section

CE, es. kona can eeneh nae nebenes 19

Tax Reform Act of 1976, Pub. L. No. 94-455, Section

eee, OO ONE, BOO etc cc dank ccblble dened cdot 19

Rev. Stat. (1878 ed.):

ES ee se a ca Ses ola bddvblcminbakhecves 9, 19

PS RD SER ins at ws 9, 19

I I ot ol eke aie te 44

Tex. Const. Ann. art. 16 (Vernon 1955):

Tex. Rev. Civ. Stat. Ann. art. 3834 (Vernon 1966) ...

Treasury Regulations on Procedure and Administration,

Section 301.6334-l(c) (26 C.F.R.) ........ 2, 10-11, 17,

Treasury Regulations, Part 69, art. 1204 (1926 Revenue

Tex. Fam. Code Ann. tit. 1, § 5.61(c) (Vernon 1975) . 37

a ler a al dB 17

i, che Ms acnctecanadtbananetenttéone 3

Miscellaneous:

American Bar Association, Final Report of the Commit-

tee on Federal Liens (1959), reprinted in House

Comm. on Ways and Means, 89th Cong , 2d Sess.,

Legislative History of the Federal Tax Lien Act of

BOGS CHEE ec cccncccvcsccccccccedadsbestlister. 30

8 Annals of Cong. 1564 (1851) ............0.0000005- 18

67 Cong. Globe (Pt. I) 700 (1865) .................-. 18

H.R. Rep. No. 1337, 83d Cong., 2d Sess. (1954) ..... 10, 17

Miscellaneous—Continued

H.R. Rep. No. 1884, 89th Cong., 2d Sess. (1966) ....

H.R. Rep. No. 94-658, 94th Cong., Ist Sess. (1975) ..

S. Rep. No. 1622, 83d Cong., 2d Sess. (1954)

S. Rep. No. 1708, 89th Cong., 2d Sess. (1966)

S. Rep. No. 94-938, 94th Cong., 2d Sess. (1976)

L. Simpkins, Texas Family Law With Forms (5th ed.

SUE 4.06.00 000 cgad dndeussubedamatasntennonaen

Vill

Page

9-10, 17

In the Supreme Court of the United States

OCTOBER TERM, 1981

No. 81-1476

UNITED STATES OF AMERICA, PETITIONER

LUCILLE Mitzi Bosco RODGERS, ET AL.

UNITED STATES OF AMERICA, PETITIONER

JOERENE INGRAM, ET AL.

ON WRITS OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES

OPINIONS BELOW

The district court did not issue an opinion in either case.

The opinion of the court of appeals in Rodgers (Pet. App.

la-24a) is reported at 649 F.2d 1117. The court’s opinion

in Ingram (Pet. App. 25a-32a) is reported at 649 F.2d

1128.

JURISDICTION

The judgments of the court of appeals in both cases

were entered on July 6, 1981 (Pet. App. 33a-36a). On

September 28, 1981, the ccurt of appeals denied the gov-

ernment’s petitions for rehearing with suggestions for

rehearing en banc (Pet. App. 37a-40a). By orders dated

(1)

December 18 and January 18, 1982, Justice White ex-

tended the time within which a petition for writs of cer-

tiorari could be filed in these cases to February 5, 1982.

The petition was filed on February 5, 1982, and granted

on March 29, 1982. The jurisdiction of this Court rests on

28 U.S.C. 1254(1).

STATUTES AND REGULATION INVOLVED

The pertinent provisions of Sections 6334 and 7403 of

the Internal Revenue Code of 1954 (26 U.S.C.) and Sec-

tion 301.6334-1(c) of the Treasury Regulations on Proce-

dure and Administration (26 C.F.R.) are set forth in the

appendix to the petition at 41la-45a.

STATEMENT

1. Rodgers. On October 24, 1937, Philip S. Bosco and

respondent Lucille Mitzi Bosco Rodgers' were married

(R. 39).* In 1955, they obtained as community property

the residential real property involved in this suit, which

they occupied with their children as their homestead

(Pet. App. la-2a). In 1971 and 1972, the Internal Revenue

Service issued assessments totalling $927,284.79 for

federal wagering taxes, penalties and interest, against

Philip for the taxable years 1966 through 1971 (id. at 2a).

These taxes remained unpaid at the time of Philip’s death

on November 6, 1974 (ibid.; R. 39). After Philip’s death,

respondent continued to occupy the property as her

! Respondent’s middle name and surname were inadvertently mis-

spelled in the caption of the case in the courts below. We employ the

correct spelling—Lucille Mitzi Bosco Rodgers.

2“R.” references are to the original record on appeal in the court of

appeals in each case. By order dated April 19, 1982, the Court

granted the motions of the parties to dispense with printing of joint

appendices.

homestead. The couple’s children have married and left

their parents’ home. Respondent thereafter remarried

and now occupies the homestead property with her pres-

ent husband. At the time this suit was filed, respondent

held no property belonging to Philip other than the home-

stead property and certain personal property having

value less than $500 (ibid.).

The government instituted this suit in the United

States District Court for the Northern District of Texas

against respondent and Philip’s son, daughter and ex-

ecutor, for the purposes of reducing to judgment the

assessments against Philip, enforcing the tax liens

against any property belonging to him, and obtaining a

deficiency judgment in the amount of any unsatisfied part

of the liability (Pet. App. 2a). In response, the defendants

moved for summary judgment on the ground that they

held no property belonging to Philip other than certain

personal property of limited value and the real property

which respondent claimed as a homestead (id. at 2a-3a). *

The government filed a cross-motion for partial summary

judgment asserting, inter alia, that the defendants’

homestead claim did not insulate the property from

enforcement of the federal tax liens and forced sale (id. at

3a). The district court granted partial summary judgment

in favor of respondents (ibid.). ‘

* Respondents also sought attorney’s fees an‘ the district court

awarded them such fees of $3,000 (Pet. App. 3a, 23a-24a). The court

of appeals, however, reversed this aspect of the district court’s

judgment, concluding “that the district court acted outside of its

discretion in awarding attorney’s fees to [respondents]” (id. at 24a).

Respondents have not sought review in this Court of the attorney's

fee question.

‘The district court did not dispose of the government’s claim for

judgment based on the assessments against Philip, but directed the

entry of a final judgment pursuant to Fed. R. Civ. P. 54(b) (R. 102).

The court of appeals affirmed (Pet. App. la-24a). In so

ruling, the court agreed that non-homestead community

property may be reached in its entirety by the govern-

ment in order to satisfy the tax debts of either spouse, and

that homestead property may be reached by the govern-

ment when both spouses are delinquent taxpayers (id. at

6a-8a). It further acknowledged that under Section

6334(a) and (c) of the Internal Revenue Code, which

enumerate particular items of property that are exempt

from levy, “the homestead interest of a taxpayer spouse,

i.e., that of one who himself has tax liability, clearly

cannot by itself defeat a federal tax lien” (Pet. App. 7a;

emphasis in original). The court therefore concluded that

“federal tax liens in this case clearly attached to the

deceased taxpayer spouse’s interest in the realty claimed

as a homestead” (id. at 8a). As aresult, the court acknowl-

edged that the tax liens “could be executed against that

interest if his was the only interest in the homestead, or if

both spouses were delinquent taxpayers and the liens had

attached to each syouse’s interest in the homestead”

(ibid., emphasis in original).

The court, however, resisted the conclusion that the

tax liens may be foreclosed or enforced against the tax-

payer spouse’s interest in realty claimed as a homestead

when the other spouse having an equal interest in the

homestead property, has no outstanding tax liability. It

noted that the authorities were divided on the question

whether the government may foreclose its tax lien on a

taxpayer spouse’s interest in property, if a nontaxpayer

spouse had a homestead interest in the property (Pet.

App. 9a-10a).

As the court below observed, the Ninth’ and Eighth*

Circuits had held that the government could foreclose its

tax lien in these circumstances. But the court followed the

opposite conclusion reached in United States v. Hersh-

berger, 475 F.2d 677 (10th Cir. 1973). There, the Tenth

Circuit reasoned that if a homestead is merely an exemp-

tion from general creditors under state law, the nontax-

payer spouse’s interest will not prevent execution of a

federal tax lier on the taxpayer spouse’s interest. If, on

the other hand, state law characterizes a homestead in-

terest as an estate in land, as the court found it did in

Hershberger, the Tenth Circuit held that a federal tax lien

may not be foreclosed against the homestead as long as

the nontaxpayer spouse’s interest exists under state law

(Pet. App. 9a-11a). Since the court below determined that

a Texas homestead interest confers an undivided, vested

estate in land, it ruled that the government could not

foreclose its federal tax liens on the interest of Philip as

long as respondent, the nontaxpayer spouse, maintained

a homestead interest in the property (id. at 19a-23a).

In support of its holding, the court below also relied on

its prior decision holding that in a foreclosure action

brought by the government under Section 7403 of the

Code, the federal courts cannot require the sale of proper-

ty to foreclose a valid federal tax lien that attaches to the

interest of only one of the owners of the property (Pet.

App. 14a-17a). The court, however, acknowledged that

four other circuits have taken the opposite view, holding

that the courts should, at the behest of the government,

order the sale of jointly held property and distribute the

5 United States v. Heffron, 158 F.2d 657 (9th Cir.), cert. denied,

331 U.S. 831 (1947).

* United States v. Heasley, 283 F.2d 422 (8th Cir. 1960); Herndon

v. United States, 501 F.2d 1219 (8th Cir. 1974).

proceeds attributable to a taxpayer’s interest in it to the

government in order to satisfy his tax liability (id. at 16a

n.12).

2. Ingram. During their marriage, Donald Ingram

and respondent Joerene Ingram acquired, as community

property, a residence located in Dallas, Texas, and

claimed this property as their homestead under Texas

law. In 1972 and 1973, the Internal Revenue Service

issued assessments against Donald Ingram under Section

6672 of the Code relating to unpaid taxes withheld from

wages of employees of the Dallas Auto Damage Apprais-

ers, Inc., of which Donald Ingram was president. The tax

liabilities related to the period from the first quarter of

1971 through the second quarter of 1972. After payments

on account of these liabilities were made, there remained

unpaid $9,330.51, plus interest. In addition, in 1973, an

assessment was made in the amount of $283.33, plus

interest, against Donald and Joerene Ingram relating to

their joint income tax liability for 1971. These amounts

remain unpaid (Pet. App. 26a).

On March 19, 1975, at which time the Ingrams were

seeking a divorce, their residence was destroyed by fire

(Pet. App. 26a).’ In connection with their divorce pro-

*The home was insured and the proceeds of the fire insurance

policy, approximately $50,000, were deposited into the registry of

the Domestic Relations Court where their divorce proceedings were

pending. Joerene and Donald Ingrain entered into a property settle-

ment agreement, which provided, inter alia, that the parties would

divide the proceeds equally and that Donald would convey his in-

terest in the real property to Joerene in exchange for $1,500 to be

paid from the proceeds of the sale of the property (Pet. App. 26a-

27a).

In addition, Joerene and Donald agreed that they would file sepa-

rate income tax returns for 1974, that Donald would pay any income

tax on joint income for 1974, and that he would “hold [his] Wife

harmless for any deficiencies or assessments for the years 1971

through 1973” (Pet. App. 27a).

ceedings, they entered into a property settlement agree-

ment in which they agreed that Donald would convey his

interest in the real property to respondent. After the

property was conveyed to Laurel Bates, as trustee for

respondent, attempts to sell the property failed. Respon-

dent also received notice from the City of Dallas Depart-

ment of Housing and Urban Rehabilitation that unless

she complied with local ordinances, the remains of the

residence would be demolished. Following a hearing,

notice requiring demolition was given. Respondent and

Laurel Bates thereupon instituted this action in state

court to quiet title to the property, to remove the liens

that encumbered it, and to enjoin demolition of the im-

provements located on the property (Pet. App. 27a).

The suit was removed to the United States District

Court for the Northern District of Texas (Pet. App. 27a).

Thereafter, the United States filed a counterclaim

against respondent and Donald Ingram, who was added

as a defendant, seeking foreclosure of its tax liens for the

sole liability of Donald Ingram for unpaid withholding

taxes and for the joint liability of Donald and Joerene

Ingram for unpaid income taxes. Respondent sought

summary judgment urging that the property was in-

sulated from creditors’ claims because it was her home-

stead. Pursuant to a stipulation of the parties, the proper-

ty was sold and the proceeds (approximately $16,250)

were deposited into the registry of the district court,

pending the outcome of the suit." The government

opposed respondent’s motion for summary judgment on

the ground that there was a material question of fact

concerning whether she had abandoned the homestead.

* The parties agreed that their rights, claims, and priorities would

be determined as if the sale had not taken place, and that the pro-

ceeds would be divided according to their respective interests (Pet.

App. 28a; R. 75).

In addition, the government filed a cross-motion for

summary judgment on its counterclaim on the ground

that the state homestead exemption was ineffective

against the federal tax liens.’ The district court granted

the government’s motion for summary judgment (Pet.

App. 28a-29a).

On the authority of its decision in Rodgers, " the court

of appeals reversed. It held that if respondent maintained

her homestead interest in the property, the government

was not entitled to enforce its tax lien based on Donald

Ingram’s withholding tax liability. The court, however,

affirmed the judgment insofar as the district court had

permitted the government to satisfy its claim relating to

the joint income tax liability from the proceeds of sale. An

issue of fact remained as to whether respondent con-

tinued to maintain her interest in the property as a home-

stead. If that were the case, she could assert her home-

stead interest as a defense against foreclosure by the

Internal Revenue Service for the purpose of satisfying

her former husband’s federal withholding tax liability.

The court therefore remanded the case for that

determination (Pet. App. 31la-32a).

SUMMARY OF ARGUMENT

Congress has prescribed that if any person neglects or

refuses to pay federal taxes, after assessment, notice and

demand, the amount of the unpaid taxes “shall be a lien in

favor of the United States upon ali property and rights to

liens had priority over their interests (Pet. App. 28a-29a).

” The court of appeals consolidated the case for oral argument with

Rodgers (Pet. App. 3a n.3).

property, whether real or personal, belonging to such

person” (26 U.S.C. 6321). A lien, however, is not self-

executing but requires enforcement if the tax assessment

which it secures is to be collected. Congress has therefore

conferred broad powers upon the Secretary of the

Treasury to take whatever administrative actions are

necessary to insure the collection of taxes from persons

whose accounts are delinquent. Thus, Section 7403 of the

Code authorizes the Attorney General, at the request of

the Secretary of the Treasury, to bring actions to enforce

liens.

Moreover, Section 6331(a) of the Code authorizes the

Secretary to collect unpaid taxes by “levy upon all proper-

ty and rights to property * * * belonging to such person

oron which thereisalien * * *.” Section 6331(b) defines

“levy” to include “the power of distraint and seizure by

any means.” There are nine enumerated exemptions set

forth in Section 6334(a) for property exempt from levy.

The list of exemptions is extremely narrow and is in-

tended to be exclusive. Accordingly, Section 6334(c) ex-

plicitly provides that “[nJotwithstanding any other law of

the United States, no property or rights to property shall

be exempt from levy other than the property specifically

made exempt by subsection (a).” Section 6334 of the Code

has its roots in comparable statutory provisions dating

back more than a century. See Rev. Stat. 3187, 3188 (1878

ed.); Sections 3691 and 3692 of the Internal Revenue Code

of 1939 (26 U.S.C. (1940 ed.)). Although the list of

enumerated exemptions from levy has been modernized

in the 1954 codification and in the Tax Reform Acts of

1969 and 1976, Congress reaffirmed in 1954 the fun-

damental principle that “[p}rovisions of State law cannot

grant an exemption from levy, and this subsection makes

it clear that no other provision of Federal law shall ex-

empt property from levy.” S. Rep. No. 1622, 83d Cong.,

2d Sess. 578 (1954); H.R. Rep. No. 1337, 83d Cong., 2d

Sess. A409 (1954).

This Court has accordingly interpreted the Internal

Revenue Service’s statutory authority to levy upon the

property of a delinquent taxpayer in the light of Con-

gress’s intention that the enumerated list in Section

6334(a) shall constitute the sole source of exemptions

from levy. As a unanimous Court observed in United

States v. Mitchell, 403 U.S. 190, 205 (1971), with respect

to Section 6334(c), “[tJhis language is specific and it is

clear and there is no room in it for automatic exemption of

property that happens to be exempt from state levy

under state law. United States v. Bess, 357 U.S. 51, 56-57

(1958); Shambaugh v. Scofield, 132 F.2d 345 (C.A. 5

1942); United States v. Heffron, 158 F.2d 657 (C.A. 9),

cert. denied, 331 U.S. 831 (1947); Treas. Reg. § 301.6334-

l(c). See Birch v. Dodt, 2 Ariz. App. 228, 407 P.2d 417

(1965).” Accord: Fink v. O’Neil, 106 U.S. 272, 276 (1882).

The Court’s approving citations of the Ninth Circuit’s

Heffron decision (both in Mitchell and previously in

United States v. Bess, 357 U.S. 51, 57 (1958)) and of the

Treasury Regulation are significant. In Heffron, the

court upheld our submission, rejected by the court below,

that a state homestead law cannot insulate a delinquent

federal taxpayer’s interest in real property from forced

sale, even where another owner occupying the homestead

has no outstanding tax liabilities. The Treasury Regula-

tion cited by the Court is similarly explicit on the question

presented here. It states that “[nJo provision of a State

law may exempt property or rights to property from levy

for the collection of any Federal tax. Thus, property

exempt from execution under State personal or home-

stead exemption laws is, nevertheless, subject to levy by

the United States for collection of its taxes” (26 C.F.R.

301.6334-1(c); emphasis supplied). Accord: United States

v. Heasley, supra; Herndon v. United States, supra.

Despite the foregoing authorities, the court below per-

mitted the Texas homestead law to insulate respondents

from the Internal Revenue Service's statutory authority

to seize, sell, or foreclose its lien upon property to satisfy

the unpaid liabilities of delinquent taxpayers. Its

rationale rests upon a two-step analysis. First, the court

held that the Texas homestead law created a present

undivided property interest in each spouse, of the real

property, and was not merely an exemption from credi-

tors. Second, the court held that respondents’ interests in

the properties could not be reached by the government's

liens because they had no outstanding tax liabilities.

Rather, the delinquent taxpayers were their deceased or

former husbands and only the husbands’ interests were

subject to foreclosure. However, since respondents had a

right of occupancy and use in the properties, the court

concluded that the district court could not order a sale of

the property in order to enforce the government’s tax lien

that admittedly attached to the husbands’ interests in the

properties.

In relying upon the purported distinction between

those homestead laws that create a present interest and

those that merely provide an exemption from creditors,

the court below, and the Tenth Circuit in United States v.

Hershberger, 475 F.2d 677 (1973), erroneously focused on

respondents’ interests in the properties rather than those

of the delinquent taxpayers. It is, however, the interests

of the delinquent taxpayers, and not respondents’ in-

terests, that are subject to collection under federal law

for satisfaction of the unpaid tax liabilities. The only

relevant question to be asked under state law is whether

the taxpayers had interests in the property to which the

liens attached. Aquilino v. United States, 363 U.S. 509

(1960). Here, it is undisputed that both taxpayers had

community property interests in the real properties to

which the government’s liens attached. Accordingly, the

tax lien attached to and became enforceable against their

interests, no matter how extensive or limited their in-

terests were. These interests weie extensive and, as

community property, was fully liable for the debts of

either spouse. See United States v. Mitchell, 403 U.S. 190

(1971). The fact that respondents likewise had interests in

the properties did not serve to divest the delinquent

taxpayers of their interests or put the properties beyond

the reach of the tax collector. “To hold otherwise would

allow states to create statutorily or otherwise present

property interests in homesteads so as to allow a home-

stead to be exempt from a federal tax levy.” Herndon v.

United States, supra, 501 F.2d at 1223.

In holding that the government could not foreclose its

liens on the real properties at issue by seeking an order of

sale of the property, the decision below erroneously rests

on the further ground that respondents had no outstand-

ing tax liabilities. As the court saw the matter, a federal

court in a foreclosure action brought by the United States

under 26 U.S.C. 7403 cannot enforce a federal tax lien by

ordering the sale of the property where there are joint

owners of the property who are not delinquent taxpayers.

Thus, the court concluded that the government was pro-

hibited from enforcing its lien even against the taxpayers’

admitted interests in the properties.

But this conclusion—first adopted by the court below in

Folsom v. United States, 306 F.2d 361 (1962)—is ex-

pressly refuted by the language of Section 7403(a), which

broadly authorizes the Attorney General to direct a civil

action to be filed in a federal district court “to enforce the

lien of the United States * * * with respect to such tax

or liability or to subject any property, off] whatever

nature, of the delinquent, or in which he has any right,

title, or interest, to the payment of such tax or liability”

(emphasis supplied). Moreover, Section 7403(b) requires

that “[aJll persons having liens upon or claiming any in-

terest in the property” be made parties to the action.

Finally, Section 7403(c) empowers the court to order “a

sale of such property”—not the sale of an “interest” in the

property—and direct “distribution of the proceeds of

such sale according to the findings of the court in respect

to the interests of the parties and of the United States.”

Thus, the statute plainly authorizes the district court to

subject the interests of persons other than the taxpayer

(such as respondents) to an involuntary sale in the course

of enforcing the government’s lien on the taxpayer’s in-

terest in the property.

It is therefore clear that Congress has authorized the

sale of property in which a delinquent taxpayer has any

interest, not simply property in which he has the sole

interest. The enforcement of federal tax liens cannot, as

the decision below erroneously concluded, be confined to

the sale of the delinquent taxpayer’s interest in jointly

held property. Indeed, four other circuits have uniformly

held that a federal district court can order the sale of

property to enforce a federal tax lien upon a delinquent

taxpayer’s partial interest in the property. United States

v. Trilling, 328 F.2d 699, 702-703 (7th Cir. 1964); Wash-

ington v. United States, 402 F.2d 3, 6-7 (4th Cir. 1968),

cert. denied, 402 U.S. 978 (1971); United States v. Over-

man, 424 F.2d 1142, 1146 (9th Cir. 1970); United States v.

Kocher, 468 F.2d 503, 506-507 (2d Cir. 1972), cert. denied,

411 U.S. 931 (1973); see also United States v. Eaves, 499

F.2d 869, 870-871 (10th Cir. 1974). As the court below

acknowledged (Pet. App. 16a n.12), “{iJn those circuits

the government therefore is entitled to sell the entire

joint tenancy property rather than just the taxpayer’s

interest therein.” If the government were forced to ac-

quire a delinquent taxpayer’s interest in jointly held

property, and then seek partition under state law, it

might well require separate lawsuits, which would

undoubtedly reduce the financial recovery of the govern-

ment and also injure the taxpayer, insofar as the sale of

his property interests would yield a lesser amount. See

United States v. Kocher, supra, 468 F.2d at 507.

Congress did not intend the tax collector to suffer delay

by having to await the termination of occupancy of a

homestead, or having to assume partnership or other

partial interests in property together with a delinquent

taxpayer’s spouse or co-owners in order to garner the

uncertain yields of partition. Instead, to provide for

prompt and efficient collection of the revenues, Congress

authorized the forced sale of the entire property in which

a delinquent taxpayer has an interest.

ARGUMENT

A STATE HOMESTEAD LAW IN A COMMUNITY PROP-

ERTY STATE DOES NOT EXEMPT REAL PROPERTY

FROM FORCED SALE UNDER THE INTERNAL REVE-

NUE CODE TO SATISFY THE DELINQUENT FEDERAL

TAX LIABILITY OF ONE SPOUSE, WHERE THE

OTHER SPOUSE OCCUPYING THE HOMESTEAD IS

NOT A DELINQUENT TAXPAYER AND WHERE STATE

LAW CHARACTERIZES A HOMESTEAD INTEREST AS

AN ESTATE IN LAND

A. Congress Has Vested The Commissioner Of Internal

Revenue With Broad Power To Collect Delinquent Tax

Liabilities

1. These cases present two important questions relat-

ing to the power of the Commissioner of Internal Reve-

nue to enforce the collection of valid and delinquent tax

liabilities, pursuant to uniform rules of nationwide

application, without regard to the provisions of state law

governing the rights of private creditors.

Congress has prescribed that if any person who is liable

for federal taxes neglects or refuses to pay them after

assessment, notice and demand, the amount of the unpaid

taxes “shall be a lien in favor of the United States upon all

property and rights to property, whether real or person-

al, belonging te such person” (26 U.S.C. 6321). Generally,

the lien “shall arise at the time the assessment is made

and shall continue until the liability for the amount so

assessed (or a judgment against the taxpayer arising out

of such liability) is satisfied or becomes unenforceable by

reason of lapse of time” (26 U.S.C. 6322). Thus, the

statutory tax lien is broadly cast to reach every interest in

property owned by the delinquent taxpayer. Examina-

tion of the present provisions, and their similar statutory

predecessors (Sections 3670 and 3671 of the Internal Rev-

enue Code of 1939 (26 U.S.C. (1940 ed.)), establishes that

“(s}tronger language could hardly have been selected to

reveal a purpose to assure the collection of taxes.” Glass

City Bank v. United States, 326 U.S. 265, 267 (1945).

After the lien created by Congress attaches to a delin-

quent taxpayer’s interests in property, in encumbers his

rights to the property and, in general, subsequently aris-

ing interests do not affect the lien." “[I]t is of the very

nature and essence of a lien, that no matter into whose

hands the property goes, it passes cum onere * * *.”

Burton v. Smith, 38 U.S. (13 Pet.) 464, 483 (1839); United

"' Congress has chosen to subordinate a federal tax lien to certain

other enumerated interests that arise before notice of the tax lien is

filed. A few specified interests (e.g., mechanic's liens) are entitled to

priority over a federal tax lien even where notice has been filed. See

26 U.S.C. 6323.

States v. Bess, 357 U.S. 51, 57 (1958). A federal tax lien,

however, is not self-executing. Rather, it requires

enforcement if the unpaid taxes it secures are to be col-

lected. Accordingly, Congress has conferred broad pow-

ers upon the Secretary of the Treasury to take affirma-

tive action to enforce collection of tax liens in aid of federal

revenues. Section 7403(a) of the Code therefore autho-

rizes the Attorney General, at the request of the Secreta-

ry of the Treasury, to institute a civil action in federal

district court “to enforce the lien of the United States

* * * or to subject any property, o[f] whatever nature,

of the delinquent, or in which he hes any right, title, or

interest, to the payment of such tax or liability.” Further-

more, in Section 6331(a), Congress has authorized the

Secretary “to collect such tax * * * by levy upon all

property and rights to property (except such property as

is exempt under Section 6334) belonging to such person or

on which there is a lien provided in this chapter for the

payment of such tax.” Section 6331(b) defines “levy” to

include “the power of distraint and seizure by any

means.” Congress also has made explicit in this regard

that “[iJn any case in which the Secretary may levy upon

property or rights to property, he may seize and sell such

property or rights to property (whether real or personal,

tangible or intangible).”

Section 6334(c) explicitly provides that the only ex-

emptions from federal collection procedures are those

enumera‘ 7d in Section 6334(a). In this respect, Section

6334(c) provides that “[nJotwithstanding any other law of

the United States, no property or rights to property shall

be exempt from levy other than the property specifically

made exempt by subsection (a).” The list of exemptions

has always been extremely narrow and is intended to be

exclusive. Indeed, there is no doubt that Congress re-

garded the exemptions enumerated in Section 6334(a) as

the exclusive exemptions from federal tax collection pro-

cedures. In enacting the present provision in 1954, Con-

gress reaffirmed the fundamental principle that “[pJrovi-

sions of State law cannot grant an exemption from levy,

and this subsection [6334(c)] makes it clear that no other

provision of Federal law shall exempt property from

levy.” S. Rep. No. 1622, 83d Cong., 2d Sess. 578 (1954);

H.R. Rep. No. 1337, 83d Cong., 2d Sess. A409 (1954).

Moreover, Treasury Regulations on Procedure and Ad-

ministration, Section 301.6334-1(c), specifies that proper-

ty made exempt by state personal property or homestead

exemptions is nevertheless subject to levy for collection

of federal taxes. See also Treasury Regulations Part 69,

Article 1204 (1926 Revenue Act).

The present version of Section 6334(a) exempts nine

categories of property from collection procedures. * The

statute, however, has its roots in comparable early reve-

nue measures enacted by Congress. See, e.g., Act of July

14, 1798, ch. 75, Sections 8, 9, 13, 1 Stat. 597, 600, 601,

exempting from distress to satisfy taxes which were im-

posed on land, dwelling houses and slaves, “tools or im-

plements of a trade or profession, beasts of the plough

necessary for the cultivation of improved lands, arms, or

the household utensils, or apparel necessary for a family”

and providing for collection of the tax first from “goods,

chattels or effects” and, if that source were insufficient,

from the land, or dwelling house that was encumbered by

the tax lien. One of the stated purposes for these provi-

® Section 6334(a) now exempts: (1) certain wearing apparel and

school books, (2) fuel, provisions, furniture and personal effects not

exceeding $500 in value, (

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.