United States v. Donahue Industries, Inc., Dba Donahue Printing Company, and Rainier National Bank

debtors receivable thereafter made checks WALLACE, Before PREGERSON and payable jointly to the and the NELSON, Judges. Circuit deposited bank. The bank then the checks PREGERSON, special account not Judge: accessible to Circuit taxpayer. payments As soon as were re- government brought The United States ceived, applied payments the bank this action in district court to enforce an against the of the defaulted loan. balance levy against administrative tax Rainier Na- payment May The last was received in unpaid tional Bank for the taxes of Dona- Industries, hue Inc. The district court found for the and ordered the In March the IRS served a sum- pay $83,215.23, including bank total of accounting mons on the bank for an appeal, and interest. On taxpayer’s bank accounts collected receivable (1) government’s levy contends that the bank. The summons identified the tax- time-barred, (2) Industries, (a/k/a enforcement action was payer as “Donahue Inc. time-barred, that even if the Printing Inc.).” action was not Company, Donahue In supported by 1. The record is not clear as to the exact dates of the record and which are not figures assessment. We use here the dates and disputed by government. given taxpayer’s appeal, in the brief on which to honor required not it was ground that account- provided the April no it had levy because to the tax- IRS letter referred ing. Its cover Industries, (a/k/a taxpayer when Inc. belonging as “Donahue payer Inc.).” denied Printing Company, The district Donahue was made. stipu- agreed to a parties then motion. Novem- letter in IRS demanded filed trial facts and lated statement col- remit “monies that ber 1982 (1) argued that The bank briefs.3 Dona- receivable[ ] from accounts lected by the stat- was barred Internal enforcement Industries, Inc. on hue in 26 U.S.C. set forth priority.” a lien of limitations claims ute Revenue Service time it needed it was 6502(a)(1);4 replied The bank consult 26 and to pursuant documents property assemble to surrender 1983, IRS the September In no counsel. 6332(c)(1) possessed it because U.S.C. § 668-A) (Form on Levy of a Notice served taxpayer when belonging to the property $78,568 for the of in amount the the bank it made; (3) that had levy was the the deficiencies assessed refusing to surrender cause for reasonable levy referred of The notice in 1980. not thus was upon, property levied the Company, Printing “Donahue as 26 U.S.C. under penalty the for liable it in a letter responded The bank Inc.” 6332(c)(2). § ac- open or closed find an “unable to was the of rejected each court The district of Dona- the name relationship under count (1) held that The court arguments. bank’s 1983, IRS the Printing.” In October hue not time- was action government’s the (Form 668- Notice Demand Final served in section time limit the because upon. barred levied the amount C) for brought apply to actions 6502(a)(1) not the tax- does identified notice the demand Again, (2) 6332(c); bank was Company, the Printing “Donahue under section as payer 6332(c)(1)to surren- respond. did under section The bank Inc.” it upon because levied property the der in brought an action government The to federal subject property the possessed the to enforce in March 1987 court district for (3) liable liens; bank was the tax 6332(c) the In- of to section levy pursuant 6332(c)(2) section penalty under the amended, 50% 1954, as of Code Revenue ternal for cause reasonable had no it later, 6332(c).2 year A 26 U.S.C. § failing surrender to on the summary judgment for moved bank the action. (d) and decided court considered trict (c) redesignated subsection was 2.Subsection in this issue 1988, and at here cited Pub.L. in by section 6332 to amendment redesignation of by 3342, unchanged 100-647, 6236(e)(2), case was Stat. 3740 102 § No. opinion reasoning (d), of the (c) 1, 1989). to and the (effective July 6332 (1988) Section U.S.C. 26 current equally to the applies part: provides in relevant 6332(d). § levy.— (d) Enforcement per- liability. Any personal Extent — "Motion brief its trial government labelled any to surrender refuses who or son fails Judgment,” district but the Summary subject property, to rights or resolution” "ripe for final matter deemed Secretary, by shall be liable upon demand Memo- decision. a memorandum and issued the United person and estate in his own October Decision randum of the equal to the value in a sum States appeal is this party now contends Neither rights not so surrendered.... property or summary judgment. granting order from an addition to (2) Penalty for violation.—In by paragraph liability imposed personal part: provides in relevant 4. Section (1), required to any person surrender if assess- Length (a) period. refuses to rights property fails or erty or —Where has imposed title been this tax rights ment property or such surrender properly period of limitation cause, within person such shall reasonable without thereto, may be collected such tax applicable percent equal to 50 liable for be court, but by proceeding in (1). or paragraph under amount recoverable begun— proceeding sake, or the is made the (1) 6332(d). consistency’s if For § 26 U.S.C. years the assessment after 6332(c), within to subsection opinion refers the tax.... designated when the was this subsection 6502(a)(1). 26 U.S.C. brought the dis- enforcement 6335(a) given.” turn, STANDARD OF REVIEW Section part: states relevant appeal purely the issues on Because (a) Notice of seizure.—As practi- soon as legal, the district court order de we review property, cable after seizure of notice in McConney, novo. United States writing given by shall Secretary be (9th Cir.), denied, cert. (or, the owner of the in the case 824, 105 S.Ct. 83 L.Ed.2d 46 U.S. personal property, possessor (1984). thereof).... Such notice specify shall contain, the sum demanded and shall DISCUSSION personal property, the case of an account and, of the seized in the case of I. Statute Limitations property, description real with reason- government The bank contends that the certainty able seized. bringing from was barred this action 6335(a). government U.S.C. Since the year statute of forth the six limitations set physically property, never seized the 6502(a)(1). government 26 U.S.C. § argues, did not satis- responds year that neither the six statute fy the statute of limitations. 6502(a)(1) any of limitations in section nor misinterprets The bank the statute and period applies levy other limitations to en- regulations by failing distinguish to be- brought actions under forcement 26 U.S.C. tangible property tween levies on and lev- 6332. We need not decide whether a § intangible property. ies on There is no longer statute of limitations than the six question government that the authority has year of limitations set in sec- statute forth levy upon to tangible intangible both and 6502(a)(1) applies brought to tion actions property. levy The statute defines as “the levy under section because the in this power of by any distraint and seizure years case was made less than six after the means,” 6331(b)(emphasis 26 U.S.C. add- § assessment of the tax. ed), explicitly provides levy may and that The IRS assessed deficiencies the upon “property rights be made or to February between and October erty (whether personal, real or tangible or later, Approximately years in 1980. three (emphasis added); intangible).” Id. see September the IRS served a notice of 301.6331-l(a)(l) (“The also 26 C.F.R. dis- § levy applicable Treasury on the The bank. may levy upon any property, trict director Regulation provides “[l]evy may that a be rights property, per- or to real or whether by serving levy.” made a notice of 26 sonal, tangible intangible_”). or 301.6331-l(a)(l) (1989). C.F.R. There- § government physically The cannot seize fore, levy in this case was made in regulations, intangible property. The September year 1983—well within the six therefore, clearly provide levy by prop- for 6502(a)(1). time limit of section er service of notice. Levy may by serving be made a notice however, argues, The bank that of, in levy any person possession on or “levy” purposes to of the statute of of obligated to, respect property or with limitations, government had to seize rights property subject levy, to in- property, properly the bank’s rather than receivables, accounts, cluding bank evi- levy, a notice of as it did in this case. serve debt, securities, salaries, dences argument The bank rests this on 26 U.S.C. of commissions, compen- wages, or other 6502(b), provides which date § “[t]he sation. levy property rights a on on which or 301.6331-l(a)(l) (emphasis is made shall be the date on which 26 add- C.F.R. § ed).5 provided in in type the notice of seizure section Each of listed this official, language apparently derived 5. This is from 26 of the United District Columbia, instrumentality which states: any agency § U.S.C. or or may upon salary of the United bia, or the District of Colum- Levy be made States accrued or officer, employee, by serving levy employ- wages a on the or elected notice of serving 6502(a)(1) by in 26 U.S.C. If, forth intangible. regulation — to 26 C.F.R. levy pursuant levy a notice effect cannot government argues, the 301.6331-l(a)(l). then by notice limitations statute satisfy the cannot intangi- receivable accounts Because intan- involving levy actions administrative in this case was levy property, ble filing an actually without gible property levy a notice of served the IRS when made position The bank’s court. district The September bank on the pro- 6502(a)(1),which section conflicts with years the tax six after less made than was collected be taxes unpaid vides assessments, timely. was within six in court by proceeding levy or the tax. Levy assessment to Honor years after II. Refusal 6502(a)(1). U.S.C. § that it was not argues The bank recognized has Court Supreme bank honor the IRS tangible intangible and distinction between the tax- belonging to no possessed determining when purposes property for Septem- made payer when case, and particular in a is made argument bases this ber 301.6331-l(a)(l) as section cited specifically 6331(b), “a states: 26 U.S.C. § levy is determining when authority for pos- only levy shall extend The Court intangible upon the time existing at obligations sessed According stated: levy is made].” [the normally ex- means that tangible bank, Levy upon or property possessed forms of service effected tends is made. seizure physical time notice of feasible, taxpayer’s that the not concedes that is Where property. receivable tagged. rights the accounts property Because posted or property is 1983 prior to the susceptible extinguished had been intangible property is n physical that, because argues seizure, posting, tagging, or but sub- serving the the accounts receivable originally took it is effected levy upon liens, re- holding federal tax party ject to upon the form appropriate levied property quired to surrender property. See rights to or property 301.6331-l(a)(l), upon. 26 C.F.R. Treas.Reg. § (1976). 301.6331-l(a)(l) § in accept the bank’s We cannot States, 429 Corp. v. Leasing United regulations. G.M. statute terpretation of the 619, 627, 50 L.Ed.2d 338, 350, 97 S.Ct.

U.S. “any person 26 U.S.C. Under § (1977).6 rights 530 to property or of ... possession levy a upon levy which subject to property the statu- no conflict between There is ..., shall, upon demand made and has been by the bank language relied on tory Levy rights.” or property such 6502(b) and surrender regulations. Sections rights property and “upon all may made be when a 6335(a) determine the statute taxpayer] belonging to ... [a sec- to property, and tangible levy is on lien.” is a there tax] de- or on 301.6331-l(a)(l) regulations [federal of the tion added). A (emphasis 6331(a) intangible U.S.C. levy § is made on a termines when taxpayer’s to tax lien attaches federal tangible property, In the case of property. assessed, unpaid taxes are when notice by physical seizure is made the tax until either attach continues intangible property, case of In the thereof. becomes unenforceable paid or the lien purposes including for all is made — lapse of time. 26 U.S.C. set of limitations the statute satisfaction ("Historically, suffi- been service of notice has 3401(d)) (as such in section defined er officer, debt, levy and and notice employee, to seize or elected official. cient added). seizure.”) (citations 6331(a) (emphasis equivilent § U.S.C. demand omitted). 330, States, 421 U.S. Phelps v. See United also 1732, 1728, 337, 44 L.Ed.2d 201 S.Ct. 6321, 6322. The lien continues to attach In the bank took taxpayer’s §§ taxpayer’s property regardless any to a accounts subject receivable govern- subsequent lien, transfer ment’s which attached when the tax Bess, 51, 57, United States v. U.S. 78 deficiencies were assessed 1980. We 1054, 1058, (1958); 2 L.Ed.2d S.Ct. hold that the bank was required to honor Resources, Inc., levy by United States v. Oil 817 the surrendering de- Cir.1987); 1433 n. 3 manded. Omni- Corp. bus Fin. United 566 F.2d (9th Cir.1977). Thus, under the Penalty III. for Refusal to Levy Honor

Treasury Regulations, A impose court must on 50% [property subject to a Federal tax lien any person who fails or refuses to honor a which has been sold or otherwise trans- tax without “reasonable cause.” 26 taxpayer may ferred be seized 6332(c)(2). U.S.C. According to the Trea- § while in the hands or transferee sury Regulation applicable to 26 U.S.C. any subsequent Levy transferee.... 6332(c)(2),a penalty should not be im- § by serving be made a notice of posed “in cases where dispute bona fide [a] person possession of ... exists concerning the proper- amount of the erty rights property subject or ty to pursuant be surrendered to a or levy.... levy only reaches [A] concerning legal effectiveness of the possession in the person levied levy.” 301.6332-l(b)(2). 26 C.F.R. A § upon at the time a is made. Report Senate accompanying the Tax Lien 301.6331-l(a)(l) 26 C.F.R. (emphasis add- Act of 1966 states: “it is intended that a ed). dispute fide bona over the owing amount taxpayer (by holder) or Treasury Regulation applica over the effectiveness of the abundantly ble to 26 U.S.C. 6331 makes itself is to constitute reasonable cause un- property subject clear that to a federal tax 6332(c)(2) der S.Rep. No. 89th [§ ].” lien need not in the taxpay be hands of the Sess., Cong., 2d reprinted in 1966 U.S. er at the time a is made. Section Cong. Code & Admin.News 6331(b) of the statute makes no reference identity to the possessor of the owner or The district court concluded that levy at the time is made. The bank had no reasonable cause to refuse to bank articulates no reason for and cites no imposed penalty. honor a 50% authority supports argument that its that The bank contends that the district court property possessed when the is erred because the had reasonable possessed exclusively by refusing must be govern- cause for to honor the taxpayer.7 levy. ment’s Bank, 1101, support and Southern Nat’l argument 7. Cases the bank cites in of its Citizens 538 F.2d denied, party 945, that a (5th 1976), enforceable a third cert. 1107 Cir. 430 U.S. taxpayer possesses if the at 1580, (1977); 97 S.Ct. 1579 & 51 L.Ed.2d 792 point. the time the is made are not on Sterling United States v. Natl Bank & Trust Co. distinguishable Most are because in them the York, 919, (2d Cir.1974); New F.2d 494 922 government prevailed ground on the Nashville, United States v. Third Natl Bank of upon property belonging had levied Tennessee, 155, (M.D.Tenn. F.Supp. 589 157 taxpayer; to the the issue now before us was not 1984); v. United States First Natl Bank Com Peoples Washington raised. See Natl Bank v. Orleans, merce New 73-2 U.S.T.C. 9751 ¶ States, 459, (9th United 111 F.2d Cir. 460-61 (1973). distinguishable Other cases are be 1985); United States v. First Nat'l Bank Ari cause, although prevailed, the banks in them zona, 388, aff'd, (D.Ariz.1970), F.Supp. 348 389 they prevail theory did not on the advanced (9th Cir.1972); Bank Nevada v. 458 F.2d 513 Pittsburgh the bank in this case. See Bank Natl Cir.1957), States, 820, (9th United 251 F.2d 827 ce States, 36, (3d v. United F.2d 657 38-40 Cir. denied, 938, 780, rt. 356 U.S. 78 S.Ct. 2 L.Ed.2d 1981); United States v. First Natl Bank and (1958); State Bank Fraser v. United 813 Co., 194, Trust F.Supp. 695 88-1 U.S.T.C. 9340 States, ¶ (6th Cir.1988); 861 F.2d 960-61 Bank, (1988); Philadelphia United States v. Natl Denver, United States v. Central Bank (1981). 81-2 U.S.T.C. (10th Cir.1988); ¶ United States v. Here, argues the district court held that The bank first there taxpayer dispute concerning the incorrect identification of the was a "bona fide legal levy," in the notice of and final demand effectiveness of the provide longer possessed property notice did not reasonable cause for the bank no be- longing taxpayer the bank's failure to honor the The when the position, district court reasoned: support made. To its Sterling notices did refer to the tax- cites United States v. National payer Printing" York, as "Donahue rather than Bank & Trust Co. of New 494 F.2d Industries, Inc."; however, (2d Cir.1974). Sterling, however, "Donahue previously responded [the bank] had inapposite. That case involved the issue regarding the IRS summons with a letter legal dispute "whether a bonafide over the Industries, (Donahue "Donahue Inc. amount that the bank owed the Printing Co.)." Moreover, the IRS and [was] sufficient excuse for the bank's fail- corresponded [the bank] had about the accounts receivable of Donahue over the levy." Sterling, ure to honor the 494 F.2d (emphasis added). legal dispute at 923 year course of more than a IRS served these notices. In this situa- before the Sterling question involved "an unsettled contrast, present of law." Id. In in the tion, adequate [the bank] had notice re- correctly case the district court noted that garding identity at the bank "has not asked the court to re- issue. questions solve unsettled of law." Even if the IRS notices have 21, 1988, Memorandum Decision of October they caused some confusion at the time levy may at 9. The law is settled that a served, were the infirmities in the notices effectively reach on which a fed- provide do not "reasonable cause" within attached, regardless eral tax lien has meaning 6332(c)(2) [be- of section any subsequent transfer of the [p]resumably, cause] [the bank] ... 6331(a); See 26 U.S.C. 26 C.F.R. learned that covered the ac- 301.6331-1; Bess, 357 U.S. at 78 S.Ct. Industries, counts receivable of Donahue 1058; Resources, Inc., at Oil 817 F.2d at being Inc. soon after complaint served with the 3; Corp., 1433 n. Omnibus Fin. 566 F.2d action[, in this which named 1103; Celina, United States v. Bank of both Rainier National Bank and Donahue (6th Cir.1983); Myers 721 F.2d Industries, Printing Inc. dba Donahue United 647 F.2d Cir. Company defendants]. 1981). dispute concerning 21, 1988, Memorandum Decision of October case, effectiveness of the in this unlike at 8-9. dispute Sterling, fide, was not bona agree We with the district court. The and therefore does not excuse the bank's levy notices, deficiencies in the under the levy. failure to honor the circumstances, do not excuse the bank's levy. refusal to honor the argues The bank also it had failing Finally, reasonable cause for levy to honor the the bank contends that it had reasonable cause to refuse to honor the because of deficiencies in the notice of and the final demand notice. Neither because the notice of failed to Treasury Regulation, require 26 C.F.R. surrender of other than 301.6332-1(b)(2), Report, belonging taxpayer. nor the Senate The notice (Form 668-A) provides S.Rep. Cong., Sess., served on the bank No. 89th 2d re part: in relevant fers to deficiencies in the notices as reasonable cause for failure to and demand Chapter 64 of the Internal Revenue levy. However, provides honor a serious deficien Code a lien for the above tax may ques paid by taxpayer].... [not cies in the notices call into due, owing, unpaid. amount is still tion the effectiveness of the give failing property, rights property, money, reasonable cause for to honor All credits, your levy. and bank accounts now in possession belonging taxpay- to this 301.6332-l(b)(2) C.F.R. (1989). Elabo- (or ..., standard, obligated) rating er on this you the majority adopts for the Second upon payment are levied for of the Circuit’s conclusion in United you Sterling Co., States v. Bank tax.... Demand is made on for the & Trust (2d Cir.1974), F.2d 919 that a necessary pay this tax bona fide amount liabili- legal dispute exists when there is “an un- ty.... question settled of law.” Id. at 923. I (Rev. 12-82) (emphasis added); Form 668-A agree majority with the that whether this (Rev. 12-82), Form 668-A reprint- see also presents question case an unsettled of law Saltzman, ed in M. IRS Practice and Pro- proper is the inquiry. focus for our How- ¶ (Cumulative 14.14[4], Form cedure 14-8 ever, I majority’s cannot concur in the ap- 1989). Supp. No. plication of that standard in this case. The notice form served on the bank re- The majority concludes that this case quires surrender of the accounts receiva- present does question an unsettled It refers to ble. which the law because law is settled that a “[t]he obligated, specifically bank was refers may effectively reach on which a the lien. The obligated bank was for the federal tax regardless lien has attached receivable, accounts which the bank took any subsequent transfer property.” of the Further, subject to the federal tax lien. Supra conclusion, however, at 1332. This already had put been on notice of conflates an issue that is settled one with requirement surrender that is not: it is well-established that a lien possession its on which a lien had attached taxpayer’s continues to attach to a proper when the served its notice of ty regardless subsequent transfer 1983; levy form in in November see, property, of that e.g., United States v. bank received a letter from the de- IRS Bess, 51, 57, 1054, 1058, 357 U.S. 78 S.Ct. manding “monies collected from accounts (1958)(Bess); L.Ed.2d 1135 United States Industries, of Donahue Inc. on receivable[ ] Resources, Inc., v. Oil 817 F.2d which the Internal Revenue Service (9th Cir.1987)(Oil Resources); n. 3 Omni priority.” (Emphasis claims a lien add- Corp. bus Financial v. United ed.) (9th Cir.1977) (Omnibus wording Neither the of the notices Financial), but it is not settled that a dispute nor possession over of the be made on on which there is erty upon levied is reasonable cause for the a lien is no longer posses but which bank’s failure to honor the The dis- taxpayer. Only sion of the the latter issue correctly imposed penal- trict court case; and, 50% I contested while con ty- majority’s cur with the resolution of the

issue, II, supra, part I see submit that the reasoning employed to reach that resolu CONCLUSION majority tion is more novel than the mod reasons, judgment For these estly implies by claiming the issue well- district court is AFFIRMED. settled. relates, majority argues As the Rainier WALLACE, Judge, concurring Circuit that the of 26 U.S.C. § part in dissenting part: and in clearly government which states that the parts I in majority concur I and II of the may “levy upon property rights all to However, opinion. I do not think property belonging taxpayer] ... to or [the penalized litigating Rainier should be lien,” (emphasis on which there is a add- case, I part this dissent from III of the ed) language is limited the of 26 U.S.C. majority opinion. 6331(b) provides levy which that “a shall § majority explains, As the supra at only property possessed extend to and obli- imposed a should not be “in gations existing cases at the time thereof.” Sec- dispute bona fide 6331(b) where exists concern- tion [a] cuts back on section ing the ... levy.” contends, effectiveness of the by permitting levy Rainier a to

1334 the Since at 165. Id. U.S.C. § rights to property and only to extend lien to upon its “solely relied government at the taxpayer to the belong erty that entitlement,” court the of claim support its face, sec- Plainly, on its levy. of the time 166-67. at levy Id. the issue. not reach did a whether not indicate 6331(b) does tion a lien distinguishing between However, in property taxpayer’s a only to levy extends levy a enforcement suit foreclosure or levy the wheth- of time at the possessed that stated action, “[t]he court the property pos- only to extends aer property taxpayer’s the only to extends the of the time at person any sessed 26 of the service. at time possessed is that majority the agree with Although I levy. (emphasis 6331(b).” at 166 Id. U.S.C. § inter- proper the reading is the latter that that to conclude on added). court went I not statutory gap, do the of pretation to the it lien entitled government’s the argument is as interstitial Rainier’s think off, to set tried had money which suggests. majority the implausible has lien tax a federal “once holding that 6331(b) section interpretation Rainier’s that property, taxpayer’s a to attached legisla- section’s in that support some has lien when the subject to remains property accompa- Report Senate history. The tive to a third the from transferred of 1966 Act Lien Tax Federal the nying pro the That at 169. Id. party.” states: however, should holding, this nounced that specifying sentence adds a the bill in de I above stated As surprising. be proper- levy extends right to this majority the issues two which scribing the possession the in taxpayer and ty Ofthe conflates, that it is well-settled mistakenly made, levy is the whom the person regardless property lien attaches a per- of the the obligations or Bess, See, e.g., transfer. subsequent which levy is the on whom 1058; son Re Oil at 78 S.Ct. at U.S. the time at the existing 3;n. Omnibus F.2d at 1433 sources, 817 But, in Sess., re- Financial, Cong., 2d 89th S.Rep. No. Rainier argument, indeed Cong. case, Admin. no & is there 1966 U.S.Code in printed have could added). concedes, Be- the that (emphasis News action. foreclosure in a lien the history prevailed con- uses legislative the cause levy enforce of a scope is the here disjunctive issue a than “and" rather junctive Bank language from action phrases ment prepositional two between “or” mistakenly cited case Celina —a to which property modifying/describing its resolu proposition for the majority as Rainier extend, suggests, it may is well-established— levy issue of the tion only extend contends, correct: is that Rainier suggests are met: requirements if two property taxpayer’s only extends of the must be first, Bank, must be second, Valley v. Cache taxpayer, States United Cir.1989), on whom is person another of the possession F.2d 1242 in Mertens, sup J. with levy made. See is lien enforcement Taxation, of section interpretation Income Rainier’s porting Federal Law of Bank, the Tenth only to Valley (“A levy 6331(b). extends In Cache 49E.20 lien fore distinguishing a Circuit, time of also at the possessed action, interpret in taxpayer and action from of the closure is 6331(b) mean that “[t]he section whom person on ed possession funds only against those existing at the itself effective obligations made, and at the account taxpayer’s added). present (emphasis levy.”) time at 1245 Id. received.” levy was time support finds also contention Rainier’s Celi Bank citing original), (emphasis For circuits. sister our opinions some 6331(b). 166; U.S.C. na, F.2d at Celi v. Bank States example, United in Pitts decision (Bank Third Circuit’s Cir.1983) (6th na, F.2d 163 States, v. United Bank burgh National action brought an Celina), sup Cir.1981), lends (3d also F.2d 36 26 U.S.C. pursuant lien taxa foreclose 6331(b). interpretation to Rainier’s port levy pursuant to a to enforce 7403 and There, brought wrongful levy may Bank be seized in the of any hands subse- against government, contending quent purchaser.”). However, only is- government’s levy improper that the presented was sue in Myers was whether the taxpayer proper- prescribed because did not have a levy procedures violated an indi- ty interest in his account at the time of the right vidual’s procedural process due Id. at 37-38. The Third Circuit “they permit private seizure of agreed, concluding preseizure “[i]f without a hearing or a did not have a interest in the prompt and adequate postseizure hearing.” checking law, Pennsylvania account under Thus, Id. at 602. the court was not re- the district court’s determination that the quired to resolve the issue with which we wrongful Government’s must be are sum, faced in this case. In majori- Finding affirmed.” at 38. Id. ty has directed us to no case which directly did not have interest interpretation refutes the 6331(b) of section account, his bank the court invalidated the Rainier has interpretation offered—an Thus, levy. Id. at 40. like Bank Celina which itself unsupported is not lan- Bank, Valley Pittsburgh Na- Cache guage from the decisions of our sister cir- tional makes it clear that Rainier’s Bank circumstances, cuits. Under these it is sim- 6331(b) proffered interpretation of does not ply suggest incorrect to that the issue be- struggle against overwhelming an tide of fore us is well-settled. authority majority sug- well-settled as the While I completely support interpre- our gests. 6331(b), tation of section I cannot overlook My legislative history contention that the novel, the fact that it legislative is that the and the in these three decisions history suggests contrary interpretation, from our sister circuits render unsettled interpretation goes that our proper interpretation section language in the decisions of our sister cir- 6331(b)’s facially ambiguous language is essence, cuits. In this is a case of first further bolstered fact that the ma- impression in which we were jority points adopted to no case that has interpret poorly-drafted facially ambigu- 6331(b) interpretation our of section as its I, therefore, respectfully ous statute. dis- holding. majority does cite five cases majority’s sent from the conclusion that support its conclusion that our decision interpretation 6331(b) our of section is well- only following authority, well-settled su- settled majority’s consequent and the deci- pra at but none of the five penalize litigating sion to Rainier for Bess, point. Resources, Neither Oil nor case. Omnibus Financial even consider the lan- guage previously of section 6331. As dis-

cussed, those three cases stand for the

proposition that a attaches lien to a tax-

payer’s property regardless subse- quent proposition transfer —a that is not America, UNITED STATES disputed in this case. Another of the five Plaintiff-Appellee, Celina, but, explained

is Bank as I above, that case involved a lien foreclosure FOREMAN, Patricia action, action not a when Defendant-Appellant. 6331(b), did discuss section interpreta- its supported tion Rainier. No. 89-50038. The fifth case majority, cited Appeals, United States Court of

Myers v. United 647 F.2d 591 Ninth Circuit. 1981), language supporting Cir. does have Argued Dec. Submitted 6331(b). interpretation our of section Id. at Decided June (A “levy and seizure need not be ac complished while the is in the taxpayer; long

hands of the prop so as the

erty lien, subject to a valid tax federal it

Case Details

Case Name: United States v. Donahue Industries, Inc., Dba Donahue Printing Company, and Rainier National Bank

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Jun 18, 1990

Citation: 905 F.2d 1325

Docket Number: 88-4354

Court Abbreviation: 9th Cir.