Fairchild v. Internal Revenue Service

Full title: JERRY W. FAIRCHILD and KAREN FAIRCHILD v. INTERNAL REVENUE SERVICE, SHEILA…

Court: United States District Court, M.D. Louisiana

Date published: May 16, 2006

Civil Action No. 06-252-D-M2 (M.D. La. May. 16, 2006)

Opinion

Civil Action No. 06-252-D-M2.

May 16, 2006

NOTICE

CHRISTINE NOLAND, Magistrate Judge

Please take notice that the attached Magistrate Judge's Report has been filed with the Clerk of the United States District Court.

In accordance with 28 U.S.C. § 636(b)(1), you have 10 days from the date of service of this Notice to file written objections to the proposed findings of fact and conclusions of law set forth in the Magistrate Judge's Report. The failure of a party to file written objections to the proposed findings, conclusions, and recommendation contained in a Magistrate Judge's Report and Recommendation within 10 days after being served with a copy of the Report shall bar that party, except upon grounds of plain error, from attacking on appeal the unobjected — to proposed factual findings and legal conclusions of the Magistrate Judge that have been accepted by the District Court.

ABSOLUTELY NO EXTENSION OF TIME SHALL BE GRANTED TO FILE WRITTEN OBJECTIONS TO THE MAGISTRATE JUDGE'S REPORT.

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

This matter is before the Court on the Affidavit of Non-Acceptance of Removal from State Court (R. Doc. 3), or motion to remand, filed by plaintiffs, Jerry W. Fairchild and Karen K. Fairchild (collectively "the Fairchilds" Service ("IRS"), has filed an opposition to the Fairchilds' motion. (R. Doc. 5).

FACTS PROCEDURAL BACKGROUND

On February 2, 2006, the Fairchilds filed a Verified Complaint in the Twenty-First Judicial District Court, Livingston Parish, State of Louisiana, through which they seek the removal or cancellation of various Notices of Federal Tax Liens filed in Livingston Parish with respect to their federal tax liabilities. The Fairchilds challenge the procedural validity of the notices but do not dispute their tax liabilities. The IRS removed this action to federal court on March 31, 2006 pursuant to 28 U.S.C. § 1442(a).

The Fairchilds have now filed this motion, wherein they seek to have this matter remanded to state court on the ground that state law governs the filing and validity of Notices of Federal Tax Liens and that state courts have exclusive jurisdiction over the property subject to those notices.

LAW ANALYSIS

Pursuant to 28 U.S.C. § 1442(a)(1), a civil action commenced in state court against the United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, sued in an official or individual capacity for any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the collection of revenue, may be removed to the district court of the United States for the district and division embracing the place wherein it is pending. 28 U.S.C. § 1442(a)(1) challenge the procedural validity of a federal tax lien under 28 U.S.C. § 2410(a), and any action brought pursuant to § 2410 in state court may be removed by the United States to the district court of the United States for the district and division in which the action is pending. McCarty v. U.S., 929 F.2d 1085 (5^th Cir. 1991); 28 U.S.C. § 1444. Given that the present matter is a challenge to the validity of a tax lien attached to property in Livingston Parish, which lies within the Middle District of Louisiana, the IRS, as an agency of the United States, was permitted to remove the matter to this district court.

In addition, jurisdiction is appropriate in this Court given that federal law governs questions bearing on the operation and enforcement of federal tax liens. S. D'Antoni, Inc. v. Great Atlantic Pac. Tea Co., Inc., 496 F.2d 1378 (5^th Cir. 1974); U.S. v. Craft, 535 U.S. 274, 278 (2002) (quoting Drye v. United States, 528 U.S. 49, 58, 120 S.Ct. 474, 145 L.Ed.2d 466 (1999)) (While state law determines what rights a taxpayer has in the property the Government seeks to reach, federal law governs "whether the taxpayer's state-delineated rights qualify as `property' or `rights in property' within the compass of the federal tax lien legislation.").¹ Specifically, the form and content of notices of federal tax liens, which is at issue in this case, are prescribed by the U.S. Secretary of the Treasury, not by the State. Thus, because federal district courts have original jurisdiction over all civil actions involving determinations of federal law pursuant 28 U.S.C. § 1331, this challenge to the procedural validity of a federal tax lien has been appropriately removed to this Court, and the Fairchilds' motion to remand should be denied.

1 See also, Medaris v. U.S., 884 F.2d 832 (5th Cir. 1989) (Once the extent of a taxpayer's legal interest in property is determined by state law, the tax consequences of a federal tax lien are dictated by federal law).

RECOMMENDATION

For the above reasons, it is recommended that the Affidavit of Non-Acceptance of Removal from State Court (R. Doc. 3) filed by plaintiffs, Jerry W. Fairchild and Karen Fairchild, be DENIED.