455 F.2d 1097 (5th Cir. 1972), 71-2135, Broday v. United States
|Docket Nº:||71-2135 [*]|
|Citation:||455 F.2d 1097|
|Party Name:||Frank L. BRODAY, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.|
|Case Date:||March 01, 1972|
|Court:||United States Courts of Appeals, Court of Appeals for the Fifth Circuit|
Martha Joe Stroud, Asst. U. S. Atty., Dallas, Tex., Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Tax Div., Dept. of Justice, Washington, D. C., Eldon B. Mahon, U. S. Atty., Ft. Worth, Tex., Loring W. Post, Richard Farber, Attys., Tax Div., Dept. of Justice, Washington, D. C., Johnnie M. Walters, Asst. Atty. Gen., for defendant-appellant.
Harold D. Rogers, Wichita Falls, Tex., for plaintiff-appellee.
Before JOHN R. BROWN, Chief Judge, and INGRAHAM and RONEY, Circuit Judges.
RONEY, Circuit Judge:
Frank Broday married his present wife, Billie Shipman Broday, on June 7, 1966. As of that date, Billie Shipman was liable for income taxes assessed against her and her former husband, Joe Shipman (now deceased), for the taxable year 1962. In an effort to collect this tax, the District Director of Internal Revenue levied upon a checking account which held funds received as dividend income from Mr. Broday's separate property. Mr. Broday paid his wife's income tax liability and then filed a claim for refund on the ground that there was a wrongful levy upon the bank account. Holding that under Texas community property law the wife possessed a property right in the dividend income from the separate property of her husband, which property right is subject to a federal tax lien for prenuptial income taxes of the wife, we must reverse the decision of the lower court which awarded a refund to Mr. Broday.
Initially, we hold that the district court was correct in denying the government's motion to dismiss the taxpayer's complaint for lack of jurisdiction.
Section 7426(a) (1) of the Internal Revenue Code provides as follows:
"If a levy has been made on property, . . . any person (other than
the person against whom is assessed the tax out of which such levy arose) who claims an interest in . . . such property and that such property was wrongfully levied upon may bring a civil action against the United States in a district court of the United States."
The government argues that the only actions that could have been brought under this section by Mr. Broday were a suit for an injunction against the wrongful levy or a suit for recovery of the property if the bank had paid the levy from the account. We believe this construes Congressional intent too narrowly. This section makes no restriction on the kind of civil action that can be brought against the United States because of the wrongful levy. There appears to be no logical reason why Congress would have intended the technicality asserted by the government in this case. The legislative history 1 does not support the government's position and no cases have been cited to us which support its argument on the motion to dismiss.
The argument misconceives the practical problems of the owner of a bank account against which a wrongful levy may have been made. It seems...
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