PAUL F. MARKHAM, TRUSTEE, Plaintiff, v. CLAIRE M. FAY, AS TRUSTEE OF HIGHLAND AVENUE NURSING HOME TRUST, PARKER HILL NURSING HOME TRUST, AND GREEN PASTURES NURSING HOME TRUST, Defendant, Appellant, and UNITED STATES, Defendant, Appellee.
No. 95-1631
UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
74 F.3d 1347; 1996 U.S. App. LEXIS 1743; 96-1 U.S. Tax Cas. (CCH)
P50,118; 77 A.F.T.R.2d (RIA) 732
February 7, 1996, Decided
Other than by levy, the IRS can collect by a proceeding in court, either by bringing an action pursuant to 26 U.S.C. §
7403, or by simply suing for the amount owed and then exercising "the usual rights of a judgment creditor" to enforce any judgment obtained. United States v. Rodgers, 461 U.S. 677, 682, 76 L. Ed. 2d 236, 103 S. Ct. 2132 (1983). This is not a section 7403 action and neither party contends that it is. 5 The IRS is therefore exercising the usual rights of a judgment creditor. It asserts (inconsistently with its indication that it levied on the trust property) that the
Federal Debt Collection Procedure Act of 1990 (FDCPA), 28 U.S.C. § 3001, et seq., governs the interpleader proceedings, and Fay does not contend otherwise. Fay's tax indebtedness is a "debt" as defined in the FDCPA because it is "an amount owing to the United States on account of [an] . . . assessment." [**13] 28 U.S.C. § 3002(3)(B). Except to
the extent that another federal law specifies procedures for recovering on a judgment for a debt arising under such law, the FDCPA is the exclusive civil procedure for the government to recover a judgment on a debt. 28 U.S.C. § 3001(a), (b). The tax code (from which the debt arose) does specify procedures for recovering on a judgment by levy, 26 U.S.C. § 6331, and by filing an action in a federal district court to enforce a lien, 26 U.S.C. § 7403, but does not contain specific
procedures for otherwise recovering on a judgment, for example by filing a derivative claim in bankruptcy court and litigating against the taxpayer in a resulting interpleader action, as the IRS did here. Thus, the procedures of the FDCPA appropriately control.
