528 U.S. 49
SYNOPSIS: On writ of certiorari to United States Court of Appeals for Eighth Circuit, petitioner appealed from determination that disclaimed interest in estate constituted property or right to property to which federal tax lien attached under 26 U.S.C.S. § 6321.
OVERVIEW: When his mother died, petitioner owed unpaid tax assessments. Petitioner disclaimed his interest to his mother's estate which then passed by operation of state law to his daughter. The petitioner appealed from the decision that the state law disclaimer did not defeat the federal tax liens. The case concerned the respective provinces of state and federal law in determining what is property for purposes of federal tax lien legislation.
In affirming the judgment, the court held that the Internal Revenue Code and interpretive case law place under federal, not state, control the ultimate issue whether a taxpayer has a beneficial interest in any property subject to levy.
The court held that a taxpayer's control over the property was determinative and that petitioner's unqualified right to receive the entire value of his mother's estate or to channel that value to his daughter rendered the inheritance "property" or "rights to property" belonging to him within the meaning of 26 U.S.C.S. § 6321, and hence subject to the federal tax liens.
OUTCOME: Judgment affirmed because Internal Revenue Code and interpretive case law placed under federal, not state, control issue of whether taxpayer had beneficial interest in property subject to levy, and petitioner taxpayer's control over property fit it within meaning of statute and hence subject to federal tax liens.
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