Court Opinion

ID: 8874917
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:50:32.427863+00
Date Added: 2024-06-11T17:06:18.045660
License: Public Domain

HAYS, Circuit Judge
(dissenting).
During the period from June 13, 1949 to October 17, 1951, the Internal Revenue Service made assessments against taxpayer Kaiser for unpaid withholding taxes. On July 19, 1955, the government filed a Notice of Lien, pursuant to I.R.C. § 6323(a) (1). On May 29, 1958, judgment was entered in favor of the government in its suit to reduce the assessment to judgment. This judgment was not docketed until February, 1963. The government concedes that appellees obtained their security interests prior to the docketing of the judgment. A federal judgment must be docketed before it becomes a lien on a debtor’s-real property. New York Civil Practice Law and Rules § 5018(b). It is for this reason that the government now sues not on its judgment but on its assessment lien.
An assessment lien survives only so long as the liability for the tax does not become “unenforceable by reason of lapse of time.” I.R.C. § 6322. I.R.C. § 6502 (a) determines the period of enforceability and reads:
Collection after assessment
(a) Length of period.—
Where the assessment of any tax imposed by this title has been made within the period of limitation properly applicable thereto, such tax may be collected by levy or by a proceeding in court, but only if the levy is made or the proceeding begun—
(1) within 6 years after the assessment of the tax, or
(2) prior to the expiration of any period for collection agreed upon in writing by the Secretary or his delegate and the taxpayer before the expiration of such 6-year period (or, if there is a release of levy under section 6343 after such such 6-year period, then before such release).
The majority does not refer us to any section of the Code under which an assessment lien is extended because a judgment has been obtained against the taxpayer. Without a statutory citation, and without any exposition to justify their step, the majority, reversing the court below, holds that a lien is extended by a judgment and continues “to exist independently of the suit or judgment which has extended [its] existence”; *751“the judgment serves merely as a measuring rod for the life of the lien.” Under this doctrine an assessment lien may last “forever.” See Plumb, Federal Tax Collection and Lien Problems, 13 Tax L. Rev. 247, 250-51 (1958).
The cases my brothers cite do not support this novel and potentially harmful doctrine. In Investment & Securities Co. v. United States, 140 F.2d 894, 896 (9th Cir. 1944), where an action for collection of a 1934 lien was commenced in 1987 and judgment was entered in 1941, the court concluded:
“There is no federal statutory provision as to a period of limitations on this judgment; it follows that in the absence of such a limitation a tax can be collected at any time; therefore, the liability of the tax now merged in the judgment has not become unenforcible by reason of lapse of time.”
There is no hint in Investment & Securities that an assessment lien exists independently of a judgment. See Hector v. United States, 255 F.2d 84 (5th Cir. 1958). In United States v. Birns, 223 F.Supp. 94 (N.D.Ohio 1963) the government claimed under a writ of execution derived from a “judgment recorded in compliance with § 317.09, Ohio Revised Code” and not on an independent assessment lien. In United States v. Saslavsky, 160 F.Supp. 883 (S.D.N.Y.1957), the government sued on its judgment. The majority cites no other case to substantiate its “independent assessment lien” theory.
The majority concedes that analogous liens under state law have no independent existence. At an earlier stage of the case the government implicitly rejected its present position. In August 1959, after the government had obtained a judgment which it now claims extends its assessment lien forever, the I. R. S. found it necessary to secure a waiver agreement from the taxpayer, to extend the lien until December 31, 1961.
Congress, by providing for the recording of tax assessment liens, I.R.C.. § 6323(a) (1), intended to “meet the harsh condition created by the holding in United States v. Snyder, 149 U.S. 210 [13 S.Ct. 846, 37 L.Ed. 705], when federal liens were few, that a federal tax lien was good against a purchaser for value without notice.” United States v. Gilbert Associates, 345 U.S. 361, 363-364, 73 S.Ct. 701, 703, 97 L.Ed. 1071 (1953). Congress had a similar intention when it required the docketing of federal judgments according to state law.
“[The] effect ascribed to judgments in United States courts led to some hardship through the loss of their lands by citizens unaware of the fact of the existence of liens from such judgments, not of record in the county where the land was situated, and this, with kindred considerations, led Congress to pass [an Act on which 28 U.S.C. § 1962 is based, requiring the docketing of federal judgments according to state laws].” Lineker v. Dillon, 275 F. 460, 472-473 (N.D. Cal.1921).
The majority by the present decision not only obviate the need for the government to docket judgments in tax assessment cases, but affirmatively encourage the Internal Revenue Service, because an assessment lien is usually a more convenient tax collection weapon than a judgment, not to docket tax judgments at all.1
Assessment liens “created by unilateral action of a government office whose records are closed to public scrutiny * * * may be dangerously secret to the taxpayer’s existing and future creditors.” 63 Colum.L.Rev. 1259, 1272 (1963). Such a lien seems too powerful a collection weapon to be extended forever by means of an undocketed judgment.

. It is astonishing that in spite of this the majority should conclude that:
“Although permitting the government to foreclose its assessment liens against this property may lessen the Oommis-sioner's incentive to dooleet federal judgments as required by 28 U.S.C. § 1962, we think that our decision is consistent with the intent of Congress.” (Emphasis added.)