Opinion ID: 694321
Heading Depth: 3
Heading Rank: 3

Heading: Action for Underlying Tax Liens

Text: 22 The Internal Revenue Code provides for the imposition of a tax lien in favor of the United States upon all property and rights to property belonging to any person who fails to pay any tax for which he is liable. 26 U.S.C. Sec. 6321 (1988). The general lien is effective after assessment has been made against the taxpayer and after demand for payment, although the lien relates back to the date of assessment and remains valid until the tax is paid in full or becomes uncollectible due to the running of the statute of limitations. Id.; 26 U.S.C. Sec. 6322 (1988). 23 The government maintained on appeal that the present action was in reality one to foreclose on the judgment liens, and also on the underlying tax liens. Citing United States v. Overman, 424 F.2d 1142, 1147 (9th Cir.1970), it argues that a tax lien that attached in 1978 was not barred by limitations, and therefore, the present action was not time-barred. 24 This action was clearly one to collect on the judgment liens. The original tax liens attached to Ancel Little's property, not to the property of Clara Little and Betty Ann Lappo. The consent judgment allowed the property titled to Clara and Betty Ann to be subject to the judgment liens, not the tax liens. Without either a consent judgment allowing this property to be subject to the tax liens, or an adjudication of the question of title, the government has no right to enforce the tax lien by selling this property. It may still enforce the tax liens against any property Ancel Little owns that may be subject to said liens. 25 For the foregoing reasons, the district court's grant of the government's motion for summary judgment is reversed and the case is remanded to the district court with direction to enter summary judgment in favor of defendants. 26 REVERSED AND REMANDED WITH DIRECTIONS.