delivered the opinion of the Court.
The principal issue in this case is whether a third party may be subrogated to a federal government tax lien and thus, entitled to enforce the lien against the taxpayer’s homestead. We conclude that the answer is yes, but that in selling the property through foreclosure, the third party must compensate a nondeliquent spouse for his or her interest in the homestead estate. We reverse in part and affirm in part the judgment of the court of appeals.
Frank Crowder operated an insurance agency, first as a sole proprietorship and then as a corporation, Crowder Insurance Agency, Inc. He was the sole officer, director, and shareholder of the corporation. The corporation did not pay its federal payroll taxes and the Internal Revenue Service assessed liens for the unpaid taxes, mterest, and penalties against Frank Crowder’s property and the corporation’s property.
Frank Crowder obtained a loan from Benchmark Bank’s predecessor to pay off the tax debts. Frank and his wife, Marion, signed a promissory note payable to the Bank and gave the Bank a deed of trust purporting to create a lien against the Crow-ders’ 1.85 аcre estate, which the Crowders claimed as their homestead. The deed of trust also provided to the extent the loan proceeds were used to pay any outstanding liens, the Bank was to be subrogated to any and all rights and liens. The Crowders paid the loan proceeds to the IRS and the IRS released its liens against Frank Crowder and the corporation. The Crowders defaulted on the loan and the Bank eventually foreclosed on their property and sold the property at a nonjudicial sale. The Bank purchased the property at the foreclosure sale subject to a first lien.
The Crowders sued the Bank, seeking a declaration that (1) the lien granted by the deed of trust was invalid, (2) the deed of trust did not authorize a nonjudicial foreclosure, and (3) the foreclosure was wrongful. In addition, thе Crowders sought damages for wrongful foreclosure alleging, among other things, that the Bank’s lien was invalid against the homestead or, alternatively, if the lien were valid, the foreclosure was wrongful because the Bank did not conduct a judicially supervised sale as required by federal law. See 26 U.S.C. § 7304. The Crowders sought a partial summary judgment on liability only. The Bank sought summary judgment that it was subrogated to a valid lien against the homesteаd interest of both Frank and Marion Crowder and that its foreclosure was not wrongful. The Bank also sought summary judgment that the Crowders’ post-foreclosure conduct in agreeing to try to sell the property for the Bank constituted a novation or accord and satisfaction that affirmed the validity of the lien and the foreclosure. The trial court denied the Crowders’ motion for partial summary judgment and granted the Bаnk’s motion for summary judgment. In its judgment, the trial court determined that the deed of trust given by the Crowders *660 created a valid Ken against their homestead and rendered a take-nothing judgment on their claims against the Bank.
The Crowders appealed, asserting that summary judgment was improper because the lien against the homestead was invalid and the Bank did not seek to partition the non-exempt portion of the prоperty; the Bank had no lien against Marion Crowder’s homestead interest; the Bank did not follow the procedures applicable to foreclosure of a federal tax lien; and the Bank’s defenses of novation and accord and satisfaction were unavailable or there were fact issues as to these defenses that precluded summary judgment. By cross-points, the Bank argued summary judgment was proper because it had a valid lien against the Crowders’ homestead and the Crowders’ summary judgment affidavits were inadmissible. The court of appeals reversed the trial court’s take-nothing judgment. That court concluded that the Bank’s attempt to obtain or enforce the IRS’s tax lien was precluded by the homestead protection afforded under the Texas Constitution.
I
The Texas Constitution protects a homestead from forced sale except for the payment of debts for purchase money, ad valorem taxes due on the property, or work or materials used in constructing improvements on the property. Tex Const. art. XVI, § 50. No mortgage, trust deed, or lien is ever valid on the homestead unless such lien secures payment оf one of these three debts.
Id.; Thompson v. Thompson,
At the outset we note that Texans approved by election on November 7, 1995, a constitutional amendment that would permit an encumbrance against a homestead for the refinance of a lien against a homestead, including a federal tax lien. Tex Const, art. XVT, § 50 (1876, amended 1973 and 1995). That amendment, however, has no bearing on our disposition of this case because the tax lien and the Bank’s subrogation rights were fixed before the amendment’s adoption. See Tex Const, art. XVII, § 1 (amended 1972) (an amendment becomes a part of the Constitution upon the majority of votes cast in favor of the amendment and proclamation made by the Governor). We must determine whether, in the absence of the amendment to Article XVI, Section 50, the Bank obtained through subrogation a valid and enforceable lien against the Crowders’ homestead.
Under the Supremacy Clause of the United States Constitution, the IRS may obtain a valid federal tax lien and enforce its lien against a Texas homestead. U.S. Const. art. VI, cl. 2;
United States v. Rodgers,
In
Staley v. Vaughn,
*661 While Staley is some authority that a third party may be subrogated to a federal government tax lien, it is not clearly dispositive. Because of the lack of discussion on the issue, there is nothing to suggest that the parties in that case contested the propriety of subrogation in these circumstances. Rather, Staley suggests that the parties simply contested the validity of a federal tax hen against a hоmestead and assumed that if the tax hen were vahd, Vaughn was subrogated to that vahd hen. We beheve Staley correctly, if cursorily, concluded that subrogation in these circumstances is proper.
We have previously held that a third party who refinances a debt secured by a vahd mechanic’s hen against a homestead may be subrogated to the hen.
Farm & Home Sav. & Loan Ass’n. v. Martin,
II
Because the Bank was subrogated to the federal government’s tax hen, the Bank may enforce its hen against the homestead through foreclosure. The Crowders argue, however, that in this instance the Bank must compensate Marion Crowder for her interest in the homestead because the IRS had assessed no taxes against Marion Crowder and had no hens against her property.
Rodgers,
The summary judgment evidence shows the IRS assessed taxes (including interest and penalties) only against Crowder Insurance Agency, Inc. and Frank Crowder and asserted its hens securing payment of those taxes only against the property of the corporation and Frank Crowder individually. The IRS did not assess any taxes or hens against Marion Crowder or her property. The Bank argues that the tax Hens are vahd against Marion Crowder’s homestead interest because she is personally hablе for the unpaid taxes under section 171.255 of the Texas Tax Code and 26 U.S.C. § 6672. We disagree.
Section 171.255 of the Texas Tax Code provides that corporate officers are hable for debts of the corporation incurred after the corporation has forfeited its privileges. TexTax Code § 171.255(a). According to the Bank, the corporation incurred unpaid taxes in 1985 when the corporatiоn had forfeited its privileges in Texas for nonpayment of franchise taxes. Section 6672 of the federal tax laws provides that a corporate officer or employee may be personally hable for unpaid corporate taxes if the individual is a person responsible for the collection and payment of taxes and the person willfully fails to do so. 26 U.S.C. § 6672;
Slodov v. United States,
Even assuming there may be some basis for Marion Crowder’s personal liability to the IRS for the unpaid taxes, subrogation does not entitle the Bank to assert and enforce nonexistent hens. Federal tax hens do not arise automatically and are not self-executing. Such tax hens arise only after the IRS assesses a deficiency, gives notice to the taxpayer of the deficiency, and the taxpayer refuses the demand for payment. 26 U.S.C. § 6321; United States v. Blakeman, 997 *662 F.2d 1084, 1088 (5th Cir.1992). None of these preconditions apply to Marion Crow-der. When the Bank refinanced the original tax debt, and thus, when the Bank succeeded to the federal government’s rights and hens, the IRS had assessed no taxes against Marion Crowder and no tax hens attached to her property. In short, there were no hens against Marion Crowder’s property to which the Bank could be subrogated.
When a homestead is subject to foreclosure of a federal tax hen on an indebtedness owed by a taxpayer, the taxpayer’s spouse, who does not owe any of that indebtedness, has a separate homestead interest and must be compensated for the loss of the homestead estate.
Rodgers,
Ill
Our inquiry does not end here. The Crowders contend that even if the Bank is subrogated to the IRS’s hens and may foreclose on their homestead, the foreclosure was wrongful in its entirety because the Bank did not fohow federal procedures for foreclosure of a federal tax hen. 26 U.S.C. § 7403. In particular, the Crowders assert that at a minimum, the Bank was required to conduct a judicially supervised sale of the property, as is required of the federal government. Id. We disagree.
The Bank was both equitably and contractually subrogated to the federal government’s tax hens. The Bank obtained contractual subrogation through the deed of trust issued by the Crowders in favor of the Bank. The deed of trust did not create a new hen against the Crowders’ property. Rather, the deed of trust preserved and extended thе existing tax hen, but also prescribed new terms and conditions for foreclosure.
Providence Institution for Sav. v. Sims,
In a related argument, the Crowders assert that the Bank’s foreclosure was wrongful because the Bank foreclosed on a debt greater than the value of the hens assessed against the property. Federal law, the Crowders submit, precludes the IRS from collecting on a tax debt more than the value of the property interests that are actually hable for the debt.
Rodgers,
The Crowders misconstrue
Rodgers. Rodgers
states that “the Government may not ultimately
collect,
as satisfaction for the indebtedness owed to it, more than the value of the property interests that are actually hable for that debt.”
Rodgers,
Although it is unclear from their briefing, the Crowders appear to suggest that Rodgers would preclude foreclosure if the government or its subrogee collected more than the amount of the liens assessed against the property. As the Supreme Court noted in Rodgers, however, “the right to collect and the right to seek a forced sale are two quite different things.” Id. The fact that the dеbt foreclosed upon may exceed the value of the liens assessed against the property interest of the delinquent taxpayer does not render the foreclosure wrongful. It simply would give rise to a right of reimbursement from the proceeds of sale collected in excess of the amount necessary to satisfy the liens.
In this case, the Bank’s summary judgment evidence shows the IRS had assessed a liеn against Frank Crowder as sole proprietor totalling $6,071.76; a lien against Frank Crowder doing business as Crowder Insurance Agency totalling $35,811.16; and a lien against Frank Crowder individually for the $27,392.87 penalty assessment as a responsible person under 26 U.S.C. § 6672. These liens totalled $69,275.79. The debt owing and satisfied by foreclosure and sale of the property totalled $54,809.48. On this summary judgment record, the Bank did not foreclose on a debt exceeding the value of the liens assessed against the property.
The Crowders argue that the liens against Frank Crowder’s property total only $8,935.48. They argue that upon payment of the delinquent taxes, interest, and penalties, the IRS abated or reversed the $27,392.87 penalty assessment against Frank Crowder. Once abated or reversed, the Crowders assert, the lien against Frank Crowder’s property in that amount no lоnger existed and could not support the Bank’s foreclosure for the full $54,809.48. In addition, the Crow-ders assert that the liens assessed against Frank Crowder, doing business as Crowder Insurance Agency, were for taxes owed only by the corporation. Thus, the Crowders contend, these liens were not assessed against Frank Crowder individually. We disagree.
The summary judgment evidence shows the IRS released its lien for the $27,-392.87 penalty assessmеnt. The only evidence that the lien was abated is by affidavit of David F. MeCool, a Certified Public Accountant, in which he gives his opinion that the IRS abated the penalty assessment. Even assuming there is some material significance to abatement, as opposed to the release of a lien, McCool’s testimony is not part of the summary judgment record. McCool’s affidavit was filed two days before the summary judgment hearing. Summary judgment evidence may be filed late, but only with leave of court. Tex.R.Civ.P. 166a(c). There is no order in this record granting the Crowders leave to file McCool’s affidavit late. McCool’s affidavit was not properly before the trial court on the motions for summary judgment.
See INA of Texas v. Bryant,
The Crowders’ argument that the liens against the property exclude those assessed against Frank Crowder, doing business as Crowder Insurance Agency, likewise is without merit. The IRS lien notice for the $35,811.16 in delinquent taxes unequivocally identifies Frank Crowder as the taxpayer against whom the lien is assessed. The notice states:
[N]otice is given that taxes (including interest and penalties) have been assessed against the following-named taxpayer. Demand for payment of this liability has been made, but it remains unpaid. Therefore, there is a lien in favor of the United States on all property and rights to property belonging to this taxpayer for the *664 amount of these taxes, and additional penalties, interest, and costs that may accrue.
Name of Taxpayer
Frank L. Crowder
d/b/a Crowder Insurance Agency
When giving notice of liens against the corporation, the IRS identified Crowder Insurance Agency, Inc. as the named taxpayer.
The summary judgment record shows that the IRS had liens totalling $69,275.79 against the property of Frank Crowder. The debt collected by the Bank through foreclosure did not exceed the value of the tax liens against the property. The trial court did not err in granting summary judgment for the Bank on Frank Crowder’s claims.
* * ⅜ * ‡ ‡
We hold that the Bank was properly sub-rogated to the federal government’s tax liens and that the Bank was entitled to foreclose upon the Crowders’ homestead. We affirm the judgment of the court of appeals only to the extent that it reversed the summary judgment as to Marion Crowder’s claim for compensation of the loss of her homestead interest upon foreclosure and remand her claim to the trial court for further proceedings consistent with this opinion. We otherwise reverse the judgment of the court of appeals and render judgment that Frank Crowder take nothing.