The defendant-trustee, John J. Hunter, appeals the district court’s order reversing a decision of the bankruptcy court and holding that the trustee could not avoid the statutory liens of the plaintiff-internal Revenue Service (the “IRS”). The sole issue on appeal is whether the district court properly determined that the trustee could not, under the Bankruptcy Code, 11 U.S.C. § 545(2), avoid the statutory liens of the IRS on debtors’ motor vehicle pursuant to the Internal Revenue Code, 26 U.S.C. § 6323(b)(2). For the reasons that follow, we affirm.
I.
On October 19, 1989, the debtors, Elmer and Doria Walter, filed a petition for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Ohio. At the time of the filing, debtors owned a 1986 Kenworth Tractor, which is the motor vehicle at issue in this case. Debtors listed the IRS as a creditor having claims for federal taxes. As of the petition filing date, debtors’ assessed tax liabilities relating to the filed notices of tax liens totalled $389,395.01, including interest and penalties. 1 On February 7, 1990, the IRS filed a proof of claim listing the nearly $390,000 as secured claims against debtors. The IRS also listed unsecured priority claims and unsecured general claims totaling $2,595.79.
On June 5, 1990, on debtors’ motion, the bankruptcy court converted debtors’ reorganization case to a liquidation case under Chapter 7 of the Bankruptcy Code. At that time, the bankruptcy court appointed John J. Hunter as trustee. In July 1990, the trustee took possession of the motor vehicle at issue, a 1986 Kenworth Tractor, which had been in debtors’ possession when they filed their petition. Pursuant to a notice of intent to sell, on October 4, 1990, the trustee sold the motor vehicle for $24,000, free and clear of all liens.
After the sale, the trustee filed an objection to the IRS’ proof of claim. The trustee asserted that because he occupied the position of a bona fide purchaser of the motor vehicle, the tax liens on the proceeds from the sale of the motor vehicle could be avoided and that the IRS’ secured claims should be treated as unsecured priority claims. On April 14, 1992, the bankruptcy court entered an order sustaining the trustee’s objection to the IRS’ secured claims.
See In re Walter,
On June 19,1992, the United States filed a notice of appeal to the United States District Court for the Northern District of Ohio. In its memorandum opinion dated September 30,1993, the district court reversed the bankruptcy court.
See In re Walter,
*1026 [[Image here]]
*1027 This timely appeal by the trustee followed.
II.
A.
This court has jurisdiction pursuant to 28 U.S.C. §§ 158(d), 1291. As the bankruptcy trustee’s power to avoid federal tax liens is a question of law, we review this issue de novo.
In re Caldwell,
Section 545 of the Bankruptcy Code dictates when a trustee can avoid statutory liens. The relevant part of that section provides:
The trustee may avoid the fixing of a statutory lien on property of the debtor to the extent that such lien—
(2) is not perfected or enforceable at the time of the commencement of the case against a bona fide purchaser that purchases such property at the time of the commencement of the case, whether or not such a purchaser exists.
11 U.S.C. § 545(2). 2 Pursuant to this section, a trustee may step into the shoes of a hypothetical bona fide purchaser and claim the same defenses to statutory liens on a debtor’s property as would a bona fide purchaser. Id. A trustee acquires that right as of the commencement of the ease, id., which is the date of filing the bankruptcy petition. See 11 U.S.C. § 101(42).
Upon filing a petition under Chapter 11 of the Bankruptcy Code, a debtor obtains the title of “debtor-in-possession.” 11 U.S.C. § 1101(1). A debtor-in-possession has virtually all of the rights and powers of a bankruptcy trustee, including the power to avoid statutory liens under § 545(2) of the Bankruptcy Code. 11 U.S.C. § 1107(a);
In re WWG Indus., Inc.,
A federal tax lien under Internal Revenue Code § 6321 is a statutory lien subject to avoidance.
See
11 U.S.C. § 101(53). A federal tax lien on all property of a delinquent taxpayer arises at the time the tax liability of the taxpayer, is assessed. 26 U.S.C. §§ 6321, 6322;
United States v. National Bank of Commerce,
Even though notice of a lien imposed by section 6321 has been filed, such lien shall not be valid ... [w]ith respect to a motor vehicle (as defined in subsection (h)(3)), as *1028 against a purchaser of such motor vehicle, if—
(A) at the time of the purchase such purchaser did not have actual notice or knowledge of the existence of such lien, and
(B) before the purchaser obtains such notice or knowledge, he has acquired possession of such motor vehicle and has not thereafter relinquished possession of such motor vehicle to the seller or his agent.
26 U.S.C. § 6323(b)(2). Having set forth the general legal principles involved in this case, we now turn to the specific issue on appeal.
B.
The trustee in this case appeals from the judgment of the district court reversing the bankruptcy court. The district court concluded that the federal tax lien on debtors’ motor vehicle that arose under Internal Revenue Code § 6321, notice of which had been properly filed, could not be avoided. Thus, it held that the proceeds from the sale of the motor vehicle were subject to the federal tax lien. The trustee argues that the district court committed two fatal errors in its analysis.
The trustee’s first argument is that the district court erred in determining the time that the lien is tested. After reciting the sequence of events, which it determined was dispositive, the district court concluded that the IRS was entitled to the proceeds from the sale of the motor vehicle. The district court stated:
Given this chronology, the Court concludes that the IRS is entitled to the proceeds from the sale of the vehicle at issue. The trustee is given the status of-a hypothetical bona fide purchaser as of the date of the filing of the petition. That date, in this case, is June of 1990, when the proceeding was converted from a Chapter 11 to a Chapter 7 bankruptcy. By that time, the IRS had already timely filed its proof of claim, thereby making it enforceable. Thus, the trustee did not obtain hypothetical possession until after the IRS has [sic] perfected its lien, and the trustee does not fall within § 545(2).
J.A. 92. We agree with the trustee that this reasoning is flawed. The district court incorrectly concluded that June 1990 was the date of the filing of the petition. Bankruptcy Code § 348(a) provides, “Conversion of a case from a case under one chapter of this title to a case under another chapter of this title ... does not effect a change in the date of the filing of the petition, the commencement of the case, or the order for relief.” 11 U.S.C. § 348(a). The language of this statute makes clear that the conversion relates back to the original date of filing the petition.
See In re Williamson,
In this case, the petition was originally filed under Chapter 11 of the Bankruptcy Code on October 19, 1989. The case was converted to a liquidation case under Chapter 7 of the Bankruptcy Code on June 5, 1990. Because the conversion relates back to the original filing on October 19, 1989, the trustee steps into the shoes of a hypothetical bona fide purchaser as of that date. It follows that the trustee may avoid the federal tax liens if a hypothetical bona fide purchaser who obtained the motor vehicle on October 19, 1989, could avoid the federal tax hens. See 11 U.S.C. § 545(2).
The district court went on to state that the federal tax hens were made enforceable because the IRS had filed its proof of
*1029
claim. This statement implies that filing a proof of claim is what renders a federal tax lien enforceable; however, a proof of claim is simply the means by which a creditor presents his claim to the bankruptcy court.
4
See
11 U.S.C. § 501. As already stated, a federal tax lien arises automatically when the tax liability is assessed and is made valid against third parties by the filing of a notice of federal tax lien. 26 U.S.C. § 6323(a);
In re Darnell,
C.
The trustee’s second argument is that the district court erred in its application of § 6323 of the Internal Revenue Code. Specifically, the trustee argues that the district court erred in concluding that the trustee could not take advantage of the protections of Internal Revenue Code § 6323(b)(2) because the trustee did not have possession of the motor vehicle before he received notice of the lien when he was appointed to administer the Chapter 7 estate. The trustee states (and the IRS agrees) that it is irrelevant whether the trustee had possession of the motor vehicle because the strength of the lien is tested against a hypothetical bona fide purchaser. The trustee reasons that because debtors had possession of the motor vehicle when they filed the original Chapter 11 petition, the trustee may now avoid the lien.
As an initial matter, we find it necessary to address what the bona fide purchaser test actually requires. Many courts and commentators say that a trustee is given the status of a hypothetical bona fide purchaser for purposes of testing statutory liens under Bankruptcy Code § 545(2).
See In re Tape City,
Whether a bona fide purchaser may avoid a statutory lien is a matter that is left to state or federal lien law.
5
4
Collier on Bankruptcy
¶ 545.04 (15th ed. 1977). Thus, where a statutory lien is created by state law, state law governs in determining whether the lien can be avoided by a bona fide purchaser, and the characteristics of a bona fide purchaser will also be determined by state law.
See In re Loretto Winery Ltd.,
The statutory hens in this case are federal tax hens created pursuant to Internal Revenue Code § 6321, and they are generally vahd against third parties once notices of federal tax hens have been filed. See 26 U.S.C. § 6323(a). However, § 6323(b) of the Internal Revenue Code affords protection for certain interests even though notice has been properly filed. 26 U.S.C. § 6323(b). The trustee in this case claims he is protected by Internal Revenue Code § 6323(b)(2), which protects a purchaser of a motor vehicle if before the purchaser received actual notice Or knowledge of the hen, he acquired possession of the motor vehicle. 26 U.S.C. § 6323(b)(2). The applicability of that provision to the trustee in this case raises two distinct issues.
The first issue is whether the trustee may claim protection under Internal Revenue Code § 6323 in the first instance. Internal Revenue Code § 2363(b) affords protection only for a “purchaser,” which is defined as “a person who, for adequate and full consideration in money or money’s worth, acquires an interest (other than a lien or security interest) in property which is valid under local law against subsequent purchasers without actual notice.” 26 U.S.C. § 6323(h)(6). Because a trustee may stand in the shoes of a bona fide purchaser for purposes of Bankruptcy Code § 545(2), the issue becomes whether a bona fide purchaser meets the definition of a purchaser. Although the term “bona fide purchaser” is not defined in the Bankruptcy Code, it is generally understood to mean “[o]ne who has purchased property for value without notice of any defects in the title of the seller.”
Black’s Law Dictionary
177 (6th ed.1990);
Dietsch v. Long,
The second issue is whether the trustee, who stands in the shoes of a hypothetical bona fide purchaser, meets the possession and no actual notice or knowledge requirements of Internal Revenue Code § 6323(b)(2). As stated above, the purchaser must have possession to have priority over a federal tax lien. 26 U.S.C. § 6323(b)(2).
Numerous courts have addressed this issue by determining whether the Bankruptcy Code grants a hypothetical bona fide purchaser “hypothetical possession” over the property upon the filing of the petition, and they have not reached consistent results. One group of cases holds that the Bankruptcy Code does not grant hypothetical possession to a hypothetical bona fide purchaser.
See In re Loretto Winery Ltd.,
In
In re Tape City, U.S.A., Inc.,
Tape City
relied on
In re Trahan,
It now appears that
Trahan
and
Tape City
are the genesis of the rule on hypothetical possession. In
In re Bates,
The Ninth Circuit has also followed the approach of
Tape City
in
In re Loretto Winery Ltd.,
However, the
Trahan/Tape City
line of cases is not without criticism. The First Circuit disapproved of
Trahan
in
In re J.R. Nieves & Co.,
In
In re Hughes,
In each of these cases, the court resolved the question of whether the hen could be avoided by a bona fide purchaser by looking at the law controlling the vahdity of the hen. We agree with, and shah follow the approach of the courts in these cases. However, as this is a case of first impression in this circuit, we do not adopt their holdings carte blanche.
In this case, the trustee claims he can avoid the hen pursuant to his powers under Bankruptcy Code § 545(2), which gives the trustee the power to avoid statutory hens where a hypothetical bona fide purchaser could avoid them. 11 U.S.C. § 545(2). As already stated, we must look to the law controlling the vahdity of the statutory hen to determine whether a bona fide purchaser could avoid the statutory hen. The statutory hen at issue is a federal tax hen, created under Internal Revenue Code § 6321, and because it is on a motor vehicle, its vahdity is controlled by Internal Revenue Code § 6323(b)(2). Therefore, the inquiry we must make is whether a hypothetical bona fide purchaser could avoid the statutory hen pursuant to Internal Revenue Code § 6323(b)(2). If a bona fide purchaser could avoid the statutory hen, the trustee could also avoid the statutory hen pursuant to his powers under § 545(2). Bankruptcy Code § 545(2) dictates that the enforceability of the statutory hen must be tested as against a bona fide purchaser as of the date the petition is filed. 11 U.S.C. § 545(2). Therefore, we will test the federal tax hens as of October 19,1989, which, as discussed above, is the date when the Chapter 11 petition was filed.
Consistent with our statement of the test — a trustee steps into the shoes of, rather than obtaining the status of a hypothetical bona fide purchaser — we will not impute characteristics or quahties of one to the other. A debtor-in-possession and a hypothetical bona fide purchaser are two separate persons. A debtor-in-possession may stand in the shoes of a hypothetical bona fide purchaser, but that is all he may do; he may not simultaneously stand in the shoes of a hypothetical bona fide purchaser and selectively assert characteristics that he has as a debtor-in-possession. This approach is necessary to fulfill the exact letter of Bankruptcy Code § 545(2), which provides that a debtor-in-possession may avoid a statutory hen only to the extent that a bona fide purchaser could.
See
11 U.S.C. § 545(2). Moreover, imputing actual characteristics of a debtor-in-possession to a hypothetical bona fide purchaser would lead to different results depending on whether an actual trustee or a debtor-in-possession was exercising the avoidance power. In otherwise identical circumstances, a debtor-in-possession would be able to avoid the statutory hens, but a trustee would not, merely because it was the debtor-in-possession, rather than the trustee, who had actual possession of the vehicle at the commencement of case and who sought to avoid the hen.
See In re Loretto Winery Ltd.,
As debtors hsted the IRS as a creditor having priority in the Chapter 11 petition filed on October 19, 1989, it is clear that debtors themselves were not without notice or knowledge of the federal tax hens. In addition, debtors were not purchasers within the meaning of Internal _ Revenue Code § 6323(b)(2). Therefore, debtors cannot, in their own right, avoid the federal tax hens under Internal Revenue Code § 6323(b)(2).
Likewise, a hypothetical bona fide purchaser could not avoid the federal tax
*1034
liens because possession of the motor vehicle was in debtors and that possession cannot be imputed to a hypothetical bona fide purchaser. Simply filing the bankruptcy petition does not transfer actual possession away from debtors,
see In re Misco Supply Co.,
Not only is this result consistent with the
Trahan/Tape City
line of cases, it is consistent with the approach this court took in a case involving § 70(c) of the Bankruptcy Act, the predecessor to Bankruptcy Code § 544(a)(1), (2), wherein we stated, “[T]he powers and rights of the hypothetical lien creditor under § 70(c) are just what the statute says they are, no more and no less.... The contrary view would endow the trustee with almost of all the qualities of a bona fide purchaser or mortgagee for present value.”
In re Federal’s Inc.,
D.
The trustee urges this court to follow the cases of
United States v. Sierer,
In summary, although we agree that the district committed the two errors advanced by the trustee, we agree with the result, albeit for different reasons,
see Hilliard v. United States Postal Serv.,
III.
For the reasons stated, the judgment of the district court is AFFIRMED.
Notes
. The IRS had made federal income tax assessments against the debtors, doing business as Adrian & Duenquat Elevator, and had filed notices of federal tax liens on the following dates:
. We do not delve into the legislative history of Bankruptcy Code § 545(2) for two reasons: First, the language of the statute is plain so it may be interpreted on its face.
See United States v. Ron Pair Enters., Inc.,
. We do not adopt the relation back doctrine for all purposes because the doctrine raises many issues — for example, determining what assets constitute property of the estate upon conversion — which we need not decide in this case.
. We do note, however, that filing the proof of claim may affect whether the trustee was without the "actual notice or knowledge of the existence of such lien” required for protection under Internal Revenue Code § 6323(b)(2).
. There are numerous cases which make the general statement that state law governs the nature of a lien and its enforceability against a bona fide purchaser. See, e.g., In re Hughes, 9 B.R. 251, 255 (Bankr.W.D.La.1981). However, because those cases involved only liens created by state law, they cannot be read to say that state law governs in cases involving liens created by federal law.
. Although it is not necessary that we look to the legislative history in interpreting Internal Revenue Code § 6323, we note that it supports this conclusion. The 1966 amendment was enacted to counteract
Enochs v. Smith,
. This conclusion is not inconsistent with the rationale of Internal Revenue Code § 6323. The purpose of this so-called supeipriority statute is to encourage the alienability of certain enumerated assets without threats of tax liability and to protect bona fide purchasers who obtained the assets without knowledge of the tax lien.
In re Znider,