# Record and brief — United States v. Rodgers > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385008_1984%3A0 ## Record - **Collection:** Supreme Court brief - **Document type:** Record and brief - **Published:** January 1, 1983 - **Citation:** 461 U.S. 677 ## 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. D 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) IV 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 Vv 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) 2 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. 4 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). 5 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- 6 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). 7 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). 10 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. 11 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 12 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. 13 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). 14 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- 15 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. 16 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. 17 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. 18 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 19 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 20 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 la APPENDIX A UNITED STATES COURT OF APPEALS FIFTH CIRCUIT UNITA Nos. 79-3358, 80-1020 UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT v. 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. 2a 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. 3a 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. 4a 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, 5a 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. 6a 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 7a 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). 8a listed in § 6334(a) as exempt property. The Code further provides, in § 6334(c) : (c) No other property exempt.—Notwith- 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: (c) Other property. No other property or 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). 9a 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 v. 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. (c) Adjudication and Decree.—The court 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 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 (c) Other property.—No other property or 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 v. 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- 3 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). 4 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 la 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. (c) ADJUDICATION AND DECREE.—The court 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 v. 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 ae 14 14 21 37, 42 35, 40 39 IV 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 [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385008_1984%3A0. Public record. Not legal advice.