LOCATION: U.S. Court of Appeals for the Fifth Circuit
DOCKET NO.: 81-1476
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Fifth Circuit
CITATION: 461 US 677 (1983)
ARGUED: Dec 06, 1982
DECIDED: May 31, 1983
George W. Jones - on behalf of the Petitioner
L. Lynn Elliott - on behalf of Respondents Ingram and Bates
William D. Elliott - on behalf of Respondents Rodgers, et al
Facts of the case
Phillip Bosco died with a great deal of tax debt, so the government sued his widow, Lucille Mitzi Bosco Rodgers, to force her to sell the house in which she currently resided to pay off his debt. Rodgers, however, was not in debt and under Texas law, had a separate right to the homestead. The district court held Rodgers had a state-created right not to have her homestead subjected to a force sale. The U.S. Court of Appeals for the Fifth Circuit affirmed.
Does section 7403 of the Internal Revenue Code of 1954 grant the government the power to order the sale of a home of a delinquent taxpayer, even if a third party has interest in the home as well?
Media for United States v. Rodgers
Audio Transcription for Oral Argument - December 06, 1982 in United States v. Rodgers
Warren E. Burger:
We will hear arguments next in United States against Rodgers.
Mr. Jones... Do we have someone missing here?
George W. Jones:
Warren E. Burger:
Mr. Jones, I think you may proceed whenever you are ready.
George W. Jones:
Mr. Chief Justice, and may it please the Court, broadly stated, the controlling issue in these cases is whether the homestead rights of a delinquent taxpayer's spouse preclude enforcement of a federal tax lien against the delinquent taxpayer's interest in the homestead property.
The Internal Revenue Service made substantial tax adjustments... tax assessments against Respondent Rodgers' husband as well as the husband of Respondent Ingram.
This litigation arises from the government's efforts to collect those taxes.
The pertinent facts are undisputed.
Respondent Rodgers and her former husband, Philip Bosco, were married in 1937.
In 1955, they purchased the real property involved in this case.
The property was community property, and Respondent and her husband claimed the property as a homestead under Texas law.
In 1971 and 1972, the Internal Revenue Service made assessments against Philip Bosco in excess of $900,000 for federal wagering taxes.
Bosco died in 1974.
The assessed taxes remain unpaid.
Respondent Rodgers remarried, and she now occupies the property with her new husband.
The government filed this action in the United States District Court for the Northern District of Texas, seeking to reduce its assessments against Bosco to judgment to enforce the liens, the tax liens against any property belonging to Bosco, and to secure a deficiency judgment for any unpaid tax liability or unsatisfied tax liability.
In the other case, Respondent Ingram and her husband, Donald Ingram, acquired real property during their marriage that they claimed as a homestead.
As in the Rodgers case, the property was community property.
In 1972 and 1973, the Internal Revenue Service made assessments against Donald Ingram for unpaid taxes withheld from the wages of the employees of a company of which Donald Ingram was the president.
The unpaid balance of the assessments is about $9,000.
In connection with their subsequent divorce, Donald Ingram conveyed his interest in the homestead properties to Respondent Ingram.
After unsuccessfully attempting to dispose of the properties, Respondent Ingram and the trustee for the properties filed this action against the United States and several other Ingram creditors in state court to quiet title to the property and to remove any liens encumbering the property.
The United States removed the action to the United States District Court for the Northern District of Texas, and filed a counterclaim seeking enforcement of its tax liens.
Donald Ingram was added as a defendant on the government's counterclaim.
Without explanation, the district court refused to enforce the tax liens in the Rodgers case, but the same court enforced the tax liens in the Ingram case.
On appeal, the two cases were consolidated for oral argument.
The court of appeals held that because the homestead interest of a spouse is characterized as a property interest under Texas law, the government cannot enforce its tax lien against the homestead property while the delinquent taxpayer's spouse chooses to maintain her homestead interest in the property.
Accordingly, the court affirmed the judgment for Respondent Rodgers in pertinent part and reversed the judgment for the government against Respondent Ingram in pertinent part.
The questions in these cases are matters of statutory interpretation.
The relevant provisions of the Internal Revenue Code are Section 6334, which exempts certain classes of property from the reach... from levy for federal taxes, Section 6321, which creates a lien against all property belonging to a delinquent taxpayer and in favor of the government, Section 7403, which provides for a civil action to enforce a tax lien against any property in which a delinquent taxpayer has any right, title, or interest.