provides for a summary administrative procedure for collecting certain unpaid taxes from transferees of taxpayers' property. That statute also requires that an assessment against a transferee must take place within four years of the incurrence of the tax liability by the transferor. Josephine argues that without such assessment, the United States is powerless to collect any monies obtained by her as a result of the allegedly fraudulent transfer to her of Joseph's interest in the Old Bridge Property.
No assessment has been made or, at this point, could be made against Josephine. However, even if the United States cannot proceed under § 6901, that alone will not bar the United States from recouping value fraudulently transferred.
It is clear that § 6901 is not an exclusive remedy, but was enacted as an alternative, cumulative remedy. The United States has "the right . . . to proceed against transferees by suit" and that right remains "unless taken away by . . . specific words or clear intendment." Leighton v. United States, 289 U.S. 506, 507-08, 77 L. Ed. 1350, 53 S. Ct. 719 (1933). In that case, the Supreme Court held that failure to personally assess shareholders of a defunct corporation as required by § 6901 did not bar an action to impose transferee liability on them. In United States v. Geniviva, 16 F.3d 522 (3d Cir. 1994), the Third Circuit noted that "Leighton has never been overruled, either by the Court or by statute, and it is binding upon us" and held that a § 6901 assessment is not a prerequisite to an action against transferees under 26 U.S.C. § 6324 (a) (2), which imposes liability on the transferees of a decedent's estate when the estate itself fails to pay its federal taxes. The Court held that § 6324 was a remedy separate from that supplied by § 6901. Id. See also United States v. Russell, 461 F.2d 605, 606-607 (10th Cir.), cert. denied, 409 U.S. 1012, 34 L. Ed. 2d 306, 93 S. Ct. 438 (1972) (§ 6901 assessment not required to maintain action under § 6324, as provisions were "cumulative and alternative -- not exclusive or mandatory").
Certainly the United States as a creditor has the right, like any other creditor, to bring an action either to enforce a lien under 26 U.S.C. § 7403 or against the transferee of a taxpayer for a fraudulent conveyance. See United States v. Rodgers, 461 U.S. at 682. This Court sees no reason not to treat § 6901 as "cumulative and alternative" to this right. Most importantly, this court sees no "specific words or intendment" that would demonstrate that Congress took away this right. Thus, the Court sees no reasonable basis on which to distinguish Leighton from the facts of this case.
Next, Josephine argues that this action should be barred by the six-year statute of limitations applicable to the New Jersey Fraudulent Conveyance Act, N.J.S.A. 25:2-7 et seq.
If the United States were subject to this limitation, the present action would appear to be barred. However, it is beyond dispute that the United States, where it is acting in its governmental capacity, is not bound by local statutes of limitations absent its consent. U.S. v. John Hancock Mut. Life Ins., 364 U.S. 301, 308, 5 L. Ed. 2d 1, 81 S. Ct. 1 (1960); United States v. Summerlin, 310 U.S. 414, 416, 84 L. Ed. 1283, 60 S. Ct. 1019 (1940); Guaranty Trust Co. v. United States, 304 U.S. 126, 133, 82 L. Ed. 1224, 58 S. Ct. 785 (1938); United States v. St. John's General Hosp., 875 F.2d 1064 (3d Cir. 1989); United States v. Studivant, 529 F.2d 673 (3d Cir. 1975).
The Fifth Circuit has held that the statute of limitations applicable to fraudulent conveyances in Florida was not a bar to an action by the United States; rather, the Court held that 26 U.S.C. § 6502 provided the applicable limitations period. United States v. Fernon, 640 F.2d 609 (5th Cir. 1981). See also United States v. Christensen, 751 F. Supp. 1532 (D. Utah 1990) (federal limitations period of § 6502, rather than Utah limitations period, applicable to action against delinquent taxpayer's transferee for fraudulent conveyance).
Josephine also argues that IRS erroneously relies on 26 U.S.C. § 6322, "which permits the plaintiff to commence litigation to collect on a levy within 10 years of the date of the assessment of the tax against the taxpayer." (Def. Supp. Br., p.1.) The crux of Josephine's argument appears to be that because there was no assessment against Josephine, the United States may not benefit from the 10-year limitations period applicable to enforcement of tax liens by the United States.
Federal tax liens arise pursuant to 26 U.S.C. § 6321, which states in relevant part:
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.