Assessments and Payments attached to the affidavit as exhibits 1 to 6 certify that such tax liens were recorded.
A brief review of the procedure of the Internal Revenue Bureau may be helpful. Upon examining the tax returns, the collector compiles assessment lists which are transmitted to the commissioner in Washington, D.C. The Commissioner inspects and signs these lists, after which the amounts shown thereon to be due from the taxpayer are regarded as assessments. The assessment lists are then returned to the collector and a tax lien arises at the moment they are received by the collector and continue until the liability for such amounts are satisfied. Metropolitan Life Insurance Co. v. United States, 6 Cir., 1939, 107 F.2d 311, certiorari denied 310 U.S. 630, 60 S. Ct. 978, 84 L. Ed. 1400, and United States v. Caldwell, D.C.M.D. Tenn. 1947, 74 F.Supp. 114, pursuant to Internal Revenue Code, Sections 3670 and 3671:
'If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount * * * shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.' Title 26 U.S.C. § 3670.
'Unless another date is specifically fixed by law, the lien shall arise at the time the assessment list was received by the collector and shall continue until the liability for such amount is satisfied or becomes unenforceable by reason of lapse of time.' Title 26 U.S.C. § 3671.
The Internal Revenue Code, Title 26 U.S.C. § 3672 requires that whenever the state in which the property is situated has by law authorized the filing of notice of such tax liens, the liens will be invalid against any mortgagee, pledgee, purchaser, or judgment creditor unless so filed.
The State of New Jersey does provide for such filing of federal tax liens. N.J.S.A. 46:16-13 provides that notices of federal tax liens 'may be filed in the office of the county recording officer of the county * * * wherein the property * * * is situate * * *.' That section states further that 'No federal tax shall be a valid lien * * * until the notice thereof shall be filed as provided by this section.'
The collector has thus complied with the statutory requirements and the government possesses valid liens in the amounts specified in exhibits 1 to 6 attached to the affidavits filed January 15, 1952.
The fact that the Brokol Manufacturing Company has been adjudicated a bankrupt does not alter the validity or enforceability of the federal liens. See United States v. Heffron, 9 Cir., 1947, 158 F.2d 657, and cases cited therein.
The Supreme Court in Goggin v. Division of Labor Law Enforcement of California, 1948, 336 U.S. 118, 69 S. Ct. 469, 93 L. Ed. 543, held that where the United States has a tax claim at the time of the filing of a petition in bankruptcy which is secured by a perfected statutory lien accompanied by physical possession of the property, the tax claim is entitled to priority over wage claims specified in Section 64, sub. a of the Act. The United States Government's tax claim is here secured by a perfected statutory lien. Possession of the property was effected on December 11, 1951, when the government levied on its warrants for distraint. The proceeds of the sale have since that time been in the possession of the government. The Goggin case, supra, answers adversely the contention of the trustee that under Section 64, sub. a of the Bankruptcy Act wage claims take priority over tax claims. I should like to observe that the collector could have issued warrants for distraint for all the federal taxes due and thus obviate the necessity for these proceedings.
The referee's order of April 17, 1952, will be vacated and the proceeds of the sale above the sum of $ 5,742.25 will be retained in the custody of the collector so that he may proceed to duly satisfy the existing tax liens of record.
An order may be submitted in conformity with the opinion herein expressed.
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