Source: http://co.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180314_0000334.DCO.htm/qx
Timestamp: 2019-04-19 18:28:14+00:00

Document:
This matter is before the Court on the Government's Motion for Entry of Decree of Sale and to Appoint a Receiver to Enforce Lien, wherein the Government argues that Advanced Floor Concepts (AFC) should be sold pursuant to 28 U.S.C. § 7403(c) to satisfy Defendant Michael Wilhite's long-outstanding restitution obligations. (Doc. # 168.) Mr. Wilhite and his wife Darla Wilhite (the Wilhites, collectively) challenge the motion (Doc. # 177), and for the following reasons, the Court grants it.
Mr. Wilhite's restitution obligation was imposed under the Mandatory Victim's Restitution Act (MVRA) and created a lien in favor of the Government. 18 U.S.C. 3613(a). The Government's action to enforce its lien in this case is therefore “in every real sense a proceeding in court to collect a tax.” United States v. Holmes, 727 F.3d 1230, 1235 (10th Cir. 2013).
26 U.S.C. § 6321 (emphasis added.) Congress intended the lien “to reach every interest in property that a taxpayer may have.” United States v. National Bank of Commerce, 472 U.S. 713, 719-20 (1985). “Stronger language could hardly have been selected to reveal a purpose to assure the collection of taxes.” U.S. v. Craft, 535 U.S. 274 (2002).
Although broad, a federal tax lien may only reach a debtor's “property or rights to property” to the extent that state law recognizes the subject interest as property. Id. at 722. In other words, the government “steps into the shoes of the [debtor] and acquires whatever rights to the property the [debtor] possessed” under state law. Kane v. Captical Guardian Trust Co, 145 F.3d 1218, 1221 (10th Cir. 1998.) In looking to state law, courts consider “the substance of the rights state law provides, not merely the labels the State gives these rights or the conclusions it draws from them.” Craft, 535 U.S. at 279.
This Court has already concluded that Mr. Wilhite has a 73.9% ownership interest in AFC under Colorado state law, and that this 73.9% interest constitutes property or rights to property under the federal tax lien statute. (Doc. # 159 at 16.) See Craft, 535 U.S. at 286 (The federal tax lien attaches to “an individual partner's interest in the partnership, that is, to the fair market value of his or her share in the partnership assets.”); LaFond v. Sweeney, 345 P.3d 932, 939 (Colo.App. 2012); aff'd, 343 P.3d 939 (Colo. 2015) (partnership law principles provide guidance when examining LLCs because they share many important characteristics and the language of the acts are similar).

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