NOT RECOMMENDED F OR F ULL-TEXT PUBLICATION File Na me: 11a0580n.06 No. 10-1498 UNITED STAT ES COURT OF AP P EALS F OR THE S IXTH CIRCUIT UNI TED STATES OF AMERI CA, Plaintiff - Appellee ,

v. DEB ORAH A. B ARCZY K Def endant - Appellant.

______________________________ ) ) ) ) ) ) ) ) ) ) ) ON APPEALFROM THE UNI TED STATES DI STRI CT COURT FOR THE E ASTERN DI STRI CT OF MI CHI GAN

Before: G RIF F IN and WH ITE, Circuit Jud ges; and WATSO N, Distric t Judge. *
PE R CURIAM . Debor ah A. Ba rczy k (“Mr s. Ba

rczy k”) appea ls from the distric t co u rt ’s order allowing the United States to f orec lose on its tax lien and sell rea l pr operty jointly owned by
Mrs. Ba rczy k and h er t ax -delinquent husband as t enants by the entirety

. Mrs. Ba rczy k, who does
not owe unpaid taxes to the United States, arg ues that her survivorship interest in the proper ty should
prec lu d e the Government from selli ng it and, alternatively , that the di strict court erre d in ref using
to deter mine the actuarial value of her owne rship interest and instead awarding her a fifty perc ent share . We AFF I RM.

The Honor able Micha el H. Watson, United States District Judge for the Souther n District * of Ohio, sitting by

desig nation.I

Def endant- Appellant Mrs. Ba rczy k appea ls the district court’s g rant of summary judgme nt in favor of the United S tates in this tax-li en fore closure action. We adopt the district court’s descr iption of the fac tual backg round:

Since 1979, [Ronald S . Ba rczy k (“Mr . Ba

rczy k”) a nd Debor ah A. Ba

rczy k, a marrie d couple,] own a residenc e at 6091 Niles Dr i ve, in Troy , Michig an (“the Niles Property ”), as tenants by the entireties. The Niles Property is fre e and clea r of debt, and, a ccor ding to De fenda nts, worth approximately

$200,000.
Fr om 1996 to 2006, inclusive, Mr. and Mrs. Ba rczy k filed individual fede ral tax returns under the status of “mar ried filing separ ate l y . ” Du ri ng these y ear s, Mr. Ba rczy k failed to pay larg e amounts of fede ral income taxes. As a result, sever al tax liens wer e cre ated in favor of the United States, wh ich attache d to all of Mr. Ba rczy k’s prope rty

and prope rty

rig hts, including the N iles Property

. I n Marc h 2009, the Gover nment broug ht this action to reduc e Mr. Ba rczy k’s tax debt to judgme nt (Count I ), and fore close the liens that arose by virtue of this debt (Count I I ). Specifica lly , the Gover nment seeks to have the Niles Property fore closed and sold, with proce eds distributed ac cording to the parties’ respe ctive intere sts. On September 21, 2009, this Court enter ed a defa ult judgme nt ag ainst Mr. Ba rczy k, in the amount of $528,771.55 plus statutory interest and ac cruals until paid . . . .
Mrs. Ba rczy k is not liable for the taxes at issue in this case . She was named as a defe ndant beca use of her interest in the Niles Proper ty

. Mrs. Ba rczy k filed a motion for summary judgme nt seeking a deter mination that the United States “ca nnot leg ally order the sale of the Property , beca use such a sale would, in violation of law, depriv[e] her of her survivorship expectancy in the Property .” I n the al terna tive, if the court deter mined that the Ni l es Property could be fore closed and sold, she soug ht a deter mination that instead of splitt ing the proce eds of the sa le equa lly (50/50) betwe en her self and the United S tates, she should “re ceive a larg er perc entag e of the net proce eds based upon actua rial [evidence]

. . . that

2she is likely to live longe r than he r husband, a nd that her inter est in the net proc eeds f rom the sale of the proper

ty is more than 50%.” The United States filed a cross-motion for summary judgme nt seeking an order allowing it to “for eclose the fede ral tax liens that have attache d t h e Ni l es Drive Property , order the judicial sale of the proper ty , and order the distribution, afte r the costs of sale, of one-ha lf of the sale proce eds to the United States and one-ha lf of the sale proce eds to Mrs. Ba rczy k.” The district court g rante d the United States’s motion for summary judgme nt, denied Mrs.
Ba rc z y k’s motion, and order ed that the United States “is authorized to fore close on its tax l i en s
ag ainst defe ndant Ronald Ba rczy k in t h e am ount set forth above pursuant to a judicial sale of the
proper ty commonly known as 6091 Niles Drive, Troy , Michig an 48089, and that defe ndant Debor ah
Ba rczy k is e ntitled to half of the proce eds from any such judicial sale.” Mrs. Ba rczy k filed a Rule 59(e) motion to alter or amen d t h e j u d gm ent, which the district court denied, and then timely
appea led.
II A This Court revie ws a district court’s summary judgme nt deter mination de novo. La Quinta Corp. v. Heartland P r o

ps. LLC , 603 F.3d 327, 335 (6th Cir. 2010). Summary judgme nt is
appropr iate if, viewing the evidenc e in the light most favor able to the nonmoving party , “the movant shows that there is no g enuine dispute as to any materia l fac t and the movant is entitled to judgme nt

as a matter of law.” Fe d. R. Civ. P. 56(a) ; see also La Quinta Corp. , 603 F.3d at 335. We “re view

cross motions for summary judgme nt under this standard as well, evalua ting eac h motion on its own merits.” La Quinta C orp. , 603 F.3d a t 335.

3B

Mrs. Ba rczy k first arg ues that the Gover

nment cannot fore close and sell the Niles Property beca use doing so would destroy the survivorship interest g uara nteed by her tenanc y by the entirety

. When a person fails to pay o u t s t an d ing taxes afte r a demand, the I nterna l Revenue Code
empower s the Gover

nment to place a lien “upon all proper ty and rig hts to proper

ty , whether rea l or
persona l, belong ing to such person.” I .R.C. § 6321, 26 U.S.C. § 6321. The Gover nment may then enfor ce the lien by filing an action in district court and naming as p ar t i es all persons having an interest in the pro p er t y subject to the lien. Id. § 7403(a) -(b)

. I f the court finds in favor of the Gover nment, the court may enfor ce the lien by “dec ree [i ng ] a sale of such proper t y . . . and a distribution of the proce eds of such sale acc ording to the finding s of the court in resp ec t t o the interests of the parties and of the United States.” Id. § 7403(c) . The purpose of this sche me “is to

ensure the prompt and cer tain enfor ceme nt of the tax laws in a sy stem rely ing primarily on self-r eporting .” United States v. Rodgers , 461 U.S. 677, 683 (1983). For eclosure and forc ed sale, with proce eds of the sale divided equitably betwee n the United States and other parties claiming an interest in the proper

ty , will normally be the proper resolution of a § 7403 action. See id. at 693-94 1 (“[W] e mus t rea d the s tatute t o contemplate, not mere ly the s ale of the delinquent t ax p ay er 's own interest, but the s ale of the entire proper ty (as long as the United St ates has any ‘cla im or i ntere st’

As the Court has rec og nized, whe re third parties hold a n interest in the proper

ty subject to 1 the Gover nment’s lien, forc ed sale of the e ntire prope rty “mig ht pose signific ant difficulties under the Due Process Clause of the Fifth Amendment.” Rodgers , 461 U.S. at 697. Howeve r, “[ t] o the extent that third-par

ty proper ty interests are ‘taken’ in the process, § 7403 provides compensation for that ‘taking ’ by requiring that the court distribute the proce ed s o f t h e sale ‘ac cording to the finding s of the court in respe ct to the interests of the parties and of the United States.’” Id. at 697-98. Thus, so long as third-par ty interest holders are compensa ted as require d by the statute, there is no Taking s-Clause proble m. 4in it), and the rec og nition of third-party interests t hroug h the m echa nism of j udicial valuation and distribution.”). 2 “[A]l though the definition of underly ing proper

ty interests is left t o s t ate law, the
conseque nces that attach to those interests is a matter left to fede ral law.” Rodgers , 461 U.S. at 683. “Ac cording ly , ‘[courts] look initially to state law to deter mine what rig hts the taxpay er has in the
proper t y the Gover

nment seeks to rea ch, then to fede ral law to deter mine whether the taxpay er' s state-de lineated rig hts qualify as ‘prope rty ’ or ‘rig hts to proper ty ’ within the compass of the fede ral tax l ien leg islation.’” United States v. Cr aft , 535 U.S. 274, 278 (2002). I f so, then a tax l ien may attach.
Un d er M i ch iga

n law, spouses with a tenancy by the entirety “have identical rights t o thei r marital home. I ndeed, spouses are entitled to equal interests in entireties proper ty in ever y situation contemplated by Michig an law. Spouses are ‘equa lly entitled to the rents, products, income, or profits

. . . of rea l

. . . proper ty held by them as tenants by the entirety .’” United States v. Barr , 617
F. 3 d 370, 373 (6th Cir. 2010) (quoting Mich. Comp. L aws § 557.71) (alter ations in ori gi n al ). Nonethele ss, eac h spouse individually has rig hts with respec t to the entities property , including the rig ht to use the proper ty , the right to exclude third parties from it, the right to a share of income produce d from it, the rig ht of survivorship, the rig ht to become a tenant in common with equal share s upon divorce , the rig ht to sell the proper ty with the [ot her spouse’s] consent and to rec eive half the proce eds from such a sale, the rig ht to place an encumbr ance on the proper ty with the [ot her spouse’s] consent, and

Section 7403 “does not require a dis trict court to authorize a f o rc ed sale under absolutely 2 all circ u m s t an ce s, and

. . . some limit ed room is left in the statute for the exercise of rea soned discretion.” Id. at 706; see also id. at 711 (“We do emphasize, howeve r, that the limit ed discretion acc orded by § 7403 should be exercised rig orously and sparing ly , keeping in mind the Gover nment' s para mount interest in prompt and cer tain collection of delinquent taxes.”). This discretionar y power to avoid forc ed sale under § 7403 is not at issue in the pre sent ca se. 5the rig ht to block [t he other spous e] fr o m s ell ing or encumbe ring the proper ty unilatera lly

. Craft , 535 U.S. at 282.
I n Rodgers , 461 U.S. 677, the Court considere d whether § 7 4 0 3 au t h o ri z ed forc ed sale of
proper ty jointly owned by spouses u n d er Texas’s homestead law when only one spouse owed delinquent taxes. The Court held that forc ed sale was permitted notwithstanding the non-delinquent spouse’s independe nt homestead interest in the proper ty under state law: “Whatever proper ty rig hts [of the non-delinquent spouse] attach to a homestead under Texas law are adequa tely discharg ed by the pay ment of compensa tion, and no further defe renc e to state law is require d.” Id. at 702. Rodgers addre ssed the interac tion of § 7403 an d h o m estea d-prope rty rig hts cre ated under Texas law. I n a footnote, the Court distinguished betwee n homestead proper ty and tenanc y -by -the-e ntirety proper ty , noting that there was at that time some authority for the position that “as a result of the peculiar leg al fiction g overning tenanc ies by the entirety in some States, no tax lien could attach [t o tenanc ies by the entirety ] in the fi rs t place beca use neither spouse possessed an independe nt interest in the
proper ty .” Id. at 702 n.31. The Court further noted that “ if the tenanc y by the en t i re ty case s are

corr ect, they do no more than illust rate the proposition that, in the tax enfor ceme nt context, fede ral law g o v erns the conseque nces that attach to proper ty interests, but state law g overns whether any
proper ty interests exist i n the first plac e.” Id.
I n Craft , 535 U.S. 274, the Court expli citly addre ssed “wh et h er a tenant by the entirety
possesses ‘prope rty ’ or ‘rig hts to proper ty ’ to which a fede ral tax lien may attach.” Id. at 276. Craft

arose in circ umstances simil ar to the p re s en t case . A Michig an-r esident husband owed sever al hundred thousand dollars of unpaid income taxes, resultin g i n a fe d er al tax lien attaching to rea l

6proper

ty held by both s p ouses as tenants by the entirety

. Id. L ooking to Michig an law, the C ourt deter mined that tenants by the entirety eac h hold a number of proper ty rig hts in entireties proper ty and that those rig hts qualify as “prope rty ” or “rig hts to proper ty ” for the purposes of the fede ral taxlien statute, I .R.C. § 6321. Id. at 281-88. Thus, even though under Mi chig an law “[l] and held by husband and wife as tenants by entirety is not subject to levy under execution on judgme nt rende red
ag ainst either husband or wife alone,” Id. at 288 (quoting Sanford v. Bertr a u , 1 6 9 N. W

. 8 80, 881 (Mich. 1918 )) , p u rsuant to fede ral law, tax liens may attach. This is beca use “[ t] he int erpr etation of 26 U.S.C. § 6321 is a federa l question, and in answe ring that qu es t ion we are in no way bound by state courts’ answe rs to simil ar questions involving state law. As we elsewhe re have held, exempt
status under state law does not bind the fede ral collector .” Id. (interna l quotation marks and citation omitted). Craft did not a ddress whether , once a fede ral tax lien attache s to Michig an tenanc y -by -theentirety proper

ty , a district cour

t may , pursuant to § 7403, orde r for eclosure and for ced sa le of the
proper ty over the objections of the non-delinquent spouse. Mrs. Ba rczy k thus arg ues that, “bec ause under Michig an law, it would be impossibl e to destroy the survivorship expectancy of a spouse, . . . but permitting a judicial sale under Fe dera l law would destroy that survivorship expe ct an cy , ” a forc ed sale is impermissible beca use it is “ eff

ectively substitut ing Fe dera l la w for Michig an law.” After the parties filed their principal briefs in this case , a panel of the Six th Circuit decide d
Barr , 617 F.3d 370. Barr aff irmed a district court’s order of fore closure and forc ed sale of proper ty owned by spouses as tenants by the entirety under Michig an law. The primary issue in Barr was the defe ndant’s arg ument that “she is entitled to the vast majority of the sale proce eds of any fore closure sale.” Barr , 617 F.3d at 372-73. Mrs. Ba rc z y k ’s cl aim — that fore closure and forc ed sale is not

7available under § 7403 in any case involving a tenanc y by the entirety wher e only one spouse owes

u n p ai d t axes — was not direc tly addre ssed i n Barr

. Howeve r, i n rea ching the i ssue of the p ro p er valuation of the non-def

aulting spouse’s interest in the proper ty and the share of the fore closure- sale
proce eds to which she is entitled, the court’s ruling was implicitl y predic ated on the understanding that there is no bar to order ing a forc ed sale of entireties proper ty over the objection of a non-liable
spouse. Barr is persua sive authority on this point; but even if this issue has not been completely decide d by Barr , the district court was corr ect that it ha s the power to order fore closure and sale of entireties pr operty

to which a f

eder al tax li en has a ttached. The law is clea

r that under the fede ral tax code courts “look initially to state law to deter mine what rights t he tax pay er has in the property the Government seeks to rea ch, then to fede ral law to deter mine whether the taxpay er' s state-de lineated rig hts qualify as ‘prope rty ’ or ‘rig hts to proper ty ’ within the compass of the federa l tax lien leg islation.” Craft , 535 U.S. at 278 (citation and some internal quotation marks omitted). Thus, “ althoug h the def inition of underly ing pr operty interests i s l ef t to state law, the conseque nces that attach to those interests is a matter left to fede ral l aw . ” Rodgers , 461 U.S. at 683. I t is now without question that fede ral tax liens may attach to tenanc y -by

the-e ntirety proper

ty in Michig an. See Craft , 535 U.S. at 288. Fur ther, the Supreme Court has held that, once a t ax l i en p roper ly attache s to jointly -held marital proper ty — in Rodgers , Texas homestead proper

ty — a district court may order a forc ed sale of that proper ty

. Rodgers , 461 U.S.
at 693-94. Mrs. Ba

rczy k arg ues t h at d i ff

erence s in the rig hts flowing from homestead proper ty under Texas law and entireties proper ty under Michig an law require a depar ture from the rule set out in Rodgers

. Howeve r, in so arg uing, Mrs. Ba rczy k confuse s the two analy

tical steps dictated by the Supreme Court’s case s. As the district court explained, “Mrs. Ba rczy k’s argume nt confla tes the

8differ ent analy ses us ed t o deter mine when a lien attache s to proper ty , and how to enfor ce it. The former require s considera tion of state law; the latter does not.” Craft has s ettled the question whether a tax lien may attach to entireties proper ty in Michig an, looking in part to Michig an law to deter mine whether the delinqu en t t ax p ay er had proper ty rig hts in the entireties proper ty

. And Rodgers direc ts that once a tax lien attache s, fede ral law g overns and permits forc losure and forc ed sale. See Rodgers , 461 U.S. at 693-94 (“[W] e must rea d the statute [§ 7403 ] t o co n t em plate, not

mere ly the sale of the delinquent taxpay er’ s own interest, but the sale of the entire proper ty (as long

as the United Stat es h as an y ‘claim or interest’ in it), and the rec og nition of third-par ty interests throug h the mecha

nism of judicial valuation and distribution.”). Thus, we AFF I RM the order of the district court permitting the g overnme nt to forc lose and sell the Proper t y . Al though losing 3

owner ship of the Niles Property as a result of her husband’s tax d eli nquency is cer tainly a harsh
outcome for Mrs. Ba

rczy k, t h at result is compelled by the expansive rea ch of the enfor ceme nt provisions of § 7403. C
Mrs. Ba rczy k next arg ues that, if a forc ed sale is permitted, she is entitled to more than fifty
perc ent of the proce eds beca use, actua

rially , she is likely to outlive her husband an d t h us has a
g rea ter probability of exercising her survivorship interest. Howeve r, tha t a r g u me n t is n o w fore closed

This outcome is consistent with the determinations of ot her circuits in simil ar ca s es . S ee 3 Popky v. United States , 419 F.3d 242, 244 (3d Cir. 2005) (holding that a fede ral tax lien may attach to tenanc y -by -the-e ntiret y p roper ty in Pennsy lvania, and validating judicial sale of the proper ty pursuant to the lien); In re Ple tz , 221 F.3d 1114, 1118 ( 9th Cir. 2000) (“Fe dera l law .

. . expli citly allows a lien cre ditor like the I RS to sell not only a debtor' s interest i n a p ro p erty , but the entire proper ty held as a tenanc y by the entirety by the debtor and his nonde btor wife.” ); United States v. Dave nport , 106 F.3d 1333, 1336-37 (7th Cir. 1997) (re ly ing on Rodgers to deter mine that a fede ral court may order the forc ed sale of tenanc y -by -the-e ntirety proper ty in I llinois once a fede ral tax lien has attac hed). 9by Barr

. Barr reje cted the non- delinquent defendant-spouse ’s arg ument that she wa s entitled to a
g rea ter share of the proce eds of the fore closure sale “bec ause she was likely to outlive her husband, [and thus] her interest in the home was more than fifty perc ent of the value of the home.” Barr , 617 F.3d at 372. The court held that beca use tenants by the entirety “have equal interests in their home, division acc ording to their interests results in an equal distribution of the proce eds of the sale of that home.” Id. at 373. Thus, the non-de faulting spouse “is entitled to fifty perc ent of the pr ocee ds of the fore closure sale of the home,” with the other fifty perc ent g oing to the Gover nment to satisfy the defa ulting spouse’s t ax debt. Id. Barr ’s fifty -per cent rule is binding on this panel. See Syke s v. Anderson , 625 F.3d 294, 319 (6th Cir. 2010) (“ This panel is without authority to overrule binding
prec edent, becaus e a published prior panel decision ‘re mains controlling authority unless an inconsistent decision of t he United States Supreme Court require s modification of t he decision or this Court sitti ng en banc overr ules the prior decision.’” (quoting Salmi v. Sec'y of Health & Human Servs. , 774 F.2d 685, 689 ( 6th Cir. 1985))).
Barr leave s open a narr ow opportuni ty for non-liabl e spouses to avoid t he presumption of equal division of the fore closure- sale proce eds. Discussing Supreme Court dicta in Rodgers , Barr
notes that “ Rodgers used actua rial valuation only out of nece ssity

. . . . No such nece ssity exis ts here , and [t he non-def

aulting spouse] prese nts no compelling rea son why this court should not apply the presumption of equal spousal life expectancy implicit in Michig an law.” Id. at 374. Howeve r, it is
not nece ssary to evalua

te here the extent of any “compe lling rea son” ex ce p t i o n l ef t open by Barr beca use, as in Barr , Mrs. Ba

rczy k prese nts no compelling rea son for depar ting from the presumption of equal division. Mr. and Mrs. Ba rczy k are of simil ar ag es (appr ox imately five y ear s’ differ ence ),

so this is not a case wher e an aty pically -wide ag e differ ence indicates that one spouse is near ing the

10end of life while the other expects to exercise rig hts in the entireties proper ty for many more y ear s. Mrs. Ba rczy k identifies no other potentially compelling fac tors. There fore , the district court’s deter mination that the proce eds of the fore closure sale should be split equally betwee n Mrs. Ba rczy k and the United States is AF FI RMED.
III
We AF F IRM the judg ment of the district cour t.

11No. 10-1498

United States v. Barc

zyk HELE NE N. WHITE , Circuit Judge (conc urring ). As the majority opinion notes, we are bound by the fifty -per cent- allocation rule announce d in United States v. Barr , 617 F.3d 370, 373 (6th Cir. 2010). I write sepa

rate ly , howeve r, t o note m y disag ree ment with the rea soning a nd outcome of Barr

. Gover

ning Supreme Court prec edent makes clea r that the fede ral g overnme nt has the power
to fore close and forc e sale of t enanc y -by -the-e ntirety proper ty in Michig an. Until Barr , howeve r, it was unresolved in this circ uit how to distribute the proce eds of a post-fore closure forc ed sale. As observe d by Chief J udg e Ba tchelder in her partial dissent in Barr , “[t] he weig ht of fede ral law arg ues strong ly ag ainst the majority opinion’s conclusion th at [ a n o n -d efa ulting spouse] is entitled to a simple fifty

perc ent intere st be cause she is a tenant by the entire ties.” Id. at 379 (B atche lder, C.J .,

concur ring in part and dissenting in part). L ike Chief J udg e Ba tchelder , I believe that an automatic fifty -per cent va luation of the non-defaulting spouse’s int ere st in the property is incorre ct, and that

co u rt s should consider actua rial evidenc e in calc ulating the spouses’ respe ctive share s in the
proper ty . Neve rtheless, be cause there is nothing to distinguish the fa cts of this case from those of
Barr , we are compelled to aff irm the district court’s valuation of Mrs. Ba rczy k’s interest in the Niles Property

.

12