990 F.3d 404
5th Cir.2021Background
- Thomas Clark pleaded guilty to health-care fraud and was ordered under the MVRA to pay $514,576.29 in restitution.
- The United States obtained writs of garnishment for multiple accounts Clark held at brokerage and life-insurance firms to satisfy the restitution judgment.
- Clark invoked the tax-code exemption incorporated into the MVRA, 26 U.S.C. § 6334(a)(8), which shields “so much of his salary, wages, or other income as is necessary to comply with” a child-support order. Both sides agreed the accounts were not salary or wages; the dispute concerned “other income.”
- The contested accounts were a revocable living-trust brokerage account (≈ $4,486) and a traditional IRA (≈ $52,826). Clark, incarcerated and with no income, claimed he needed withdrawals from those accounts to meet child-support obligations.
- The district court issued final garnishment orders permitting seizure of those accounts; Clark appealed solely on the § 6334(a)(8) child-support exemption question.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether retirement-account assets (the brokerage trust and traditional IRA) qualify as “other income” exempt from garnishment under 26 U.S.C. § 6334(a)(8) when needed to satisfy a child-support order | Retirement funds are assets/corpus, not periodic compensation; the catchall “other income” should be read as limited to income like wages—periodic payments for services—so retirement accounts are not exempt | Withdrawals from a traditional IRA (and amounts garnished to discharge obligations) are taxable and functionally constitute income; thus the accounts should be treated as “other income” necessary to comply with child support | Affirmed. Applying ejusdem generis, “other income” is limited to income akin to salary/wages (e.g., bonuses, tips, commissions); Clark’s retirement accounts are not within that category and are not exempt. |
Key Cases Cited
- United States v. Elashi, 789 F.3d 547 (5th Cir. 2015) (MVRA generally permits garnishment; exemptions borrowed from tax code)
- United States v. Berry, 951 F.3d 632 (5th Cir. 2020) (retirement-account assets may be garnished under the MVRA)
- Woods v. Simpson, 46 F.3d 21 (6th Cir. 1995) (construing “other income” ejusdem generis as income for services, not inheritances)
- Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955) (broad definition of gross income as undeniable accessions to wealth)
- United States v. Koutsostamatis, 956 F.3d 301 (5th Cir. 2020) (principles for reading catchall terms in statutory lists)
- Old Colony Trust Co. v. Commissioner, 279 U.S. 716 (1929) (discharge of a legal obligation can constitute income)
- Sorenson v. Secretary of the Treasury, 475 U.S. 851 (1986) (identical words in the same statute normally carry the same meaning)