Source: https://supreme.justia.com/cases/federal/us/326/265/
Timestamp: 2019-04-23 23:56:16+00:00

Document:
1. Section 3670 of the Internal Revenue Code, which provides that the amount of taxes owed the United States government by a taxpayer "shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person," and § 3671 create a continuing tax lien covering all property or rights to property owned by a tax delinquent at any time during the life of the lien, including property acquired after the lien arose. P. 326 U. S. 267.
2. Section 3678 shows a plain intent to subject to the tax lien "property owned by the delinquent" when suit to enforce the lien is filed, rather than only that owned when the lien arose. P. 326 U. S. 267.
Certiorari, 325 U.S. 844, to review affirmance of an order granting priority to the United States over a judgment creditor whose judgment was obtained after the tax lien arose but before the property in question was acquired.
Revenue Code. The Circuit Court of Appeals concluded that the statutory tax lien did cover after-acquired property, and accordingly affirmed the District Court's judgment for the United States. 146 F.2d 831. We granted certiorari because of statements made in the opinions of other courts which seemed to conflict with the conclusion below. United States v. Long Island Drug Co., 115 F.2d 983; United States v. Pacific Railroad, 1 F. 97.
"any property and rights to property, whether real or personal, or to subject any such property and rights to property owned by the delinquent, or in which he has any right, title, or interest, to the payment of such tax."
"a delinquent taxpayer may, at any time prior to the expiration of the statutory period of limitation, become possessed of property against which the lien may attach, thus making the tax liability enforceable through the lien."
"whenever it is reasonably possible that the taxpayer may, in the future, acquire property or property rights from which the tax liability may be satisfied."
And, in Graves v. Commissioner, 12 B.T.A. 124, 133, the Tax Board said that the lien applied, "of course, to all the property that the tax debtor subsequently acquired."
The bank's arguments on behalf of a statutory construction supporting its claims are without merit. We are told that to increase unduly the scope of the government's lien is unwise. But most of the objections raised would apply not merely to liens that cover after-acquired property, but also with equal force to most other types of liens. At any rate, the wisdom of legislation is a question for Congress. We are further told that the tax lien cannot attach to Maddas' claim, because the law of Pennsylvania, where this obligation arose, does not treat "future earning capacity" as "property rights to property." But the question of whether the tax lien covers future earning capacity is not before us. For the government here seeks to reach an already existing obligation for services rendered, which clearly falls within the statutory language. Cf. Matter of Rosenberg, 269 N.Y. 247, 199 N.E. 206. Moreover, the Congressional meaning is not to be determined by resorting to the local law of Pennsylvania. United States v. Snyder, 149 U. S. 210; Helvering v. Stuart, 317 U. S. 154, 317 U. S. 161-162.
Our conclusion is that the lien applies to property owned by the delinquent at any time during the life of the lien.
This is in accord with all the cases that have directly passed upon this question. [Footnote 5] As previously noted, there are two cases, which contain language which might lead to another conclusion. But nothing there said offers any persuasive reason for restricting the scope of the lien.
There is also a claim for 1936 taxes which raises different questions that need not be considered here.
"Sec. 3671. Period of lien."
Section 3672 provides that the lien shall not be valid against any mortgagee, pledgee, purchaser, or judgment creditor until notice is filed in an office designated by State law or in the office of the clerk of the United States District Court. Here, such notice was duly filed.
The District Court acquired jurisdiction because the indebtedness to Maddas was due from the trustee. The procedure by which that jurisdiction was acquired is sufficiently set forth in the opinions below, and need not be repeated here. 54 F.Supp. 11, 146 F.2d 831.
14 Stat. 98, 107; 15 Stat. 125, 167; 37 Stat. 1016; 45 Stat. 791, 875.
Citizens National Bank v. United States, 135 F.2d 527; Nelson v. United States, 139 F.2d 162; Investment & Securities Co. v. United States, 140 F.2d 894; United States v. Worley, 64 F.Supp. 271; Minnesota Mut. Life Ins. Co. v. United States, 47 F.2d 942, 944. See also United States v. Warren R. Co., 127 F.2d 134; Matter of Rosenberg, supra.
every description of property then owned by the taxpayer, but also every species which might later come into his hands, clearer words than "all property" and "belonging to" were readily available to express this purpose. The harshness of the consequences, not only for the taxpayer, but for others dealing with him, which this case dramatically exemplifies, gives reason beyond the ambiguity of the language used for thinking there was no such intent.
Nor is such an intent supplied by use of the present tense of the verb "has" in the final clause of § 3678(a). [Footnote 2/2] That section merely provides for the manner in which the lien defined by §§ 3670 and 3671 shall be enforced. Section 3678(a), in my opinion, was not intended to add to the scope of the lien or extend its definition beyond the limits defined by those sections. If the lien was designed to reach after-acquired property, the alternative method specified in § 3678(a) for reaching the property then owned by the debtor would seem to be redundant.
cannot supply the required Congressional intent, and the scanty evidence of established and accepted practice is neither so wholly consistent nor so convincing as to furnish this necessary element.
Accordingly, I would reverse the judgment and remand the cause to the Circuit Court of Appeals for the consideration and disposition of the issues presented to, but not determined by, it in view of its disposition upon the matters now determined here.
Although, by § 3671, the lien "arises" as of the time the assessment list is received by the collector, it relates back to the time of notice and demand, § 3670, as against the taxpayer, though, by virtue of § 3672(a), it is not valid as against any mortgagee, pledgee, purchaser, or judgment creditor "until notice thereof has been filed by the collector" as provided.
"Sec. 3678. Civil action to enforce lien on property."
"(a) Filing. -- In any case where there has been a refusal or neglect to pay any tax, and it has become necessary to seize and sell property and rights to property, whether real or personal, to satisfy the same, whether distraint proceedings have been commenced or not, the Attorney General, at the request of the Commissioner, may direct a civil action to be filed, in a district court of the United States, to enforce the lien of the United States for tax upon any property and rights to property, whether real or personal, or to subject any such property and rights to property owned by the delinquent, or in which he has any right, title, or interest, to the payment of such tax."

References: § 3671
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 § 3678
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 § 3670
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