Annotations- Books Furniture tools

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6334 Annotations: Exemption for Books, Furniture, Tools - Levy

Property Exempt from Levy: Books, Furniture, Tools

[66-1 USTC ¶9211]George Lincoln Rockwell; Alan Welch; Mathias Koehl; and John Patler, Plaintiffs, v. Henry W. Fowler, Secretary, U. S. Treasury Department; Sheldon Cohen, Director, U. S. Internal Revenue Service; James P. Boyle, District Director, U. S. Internal Revenue Service; and Sam R. Edmondson, Collector of Internal Revenue, Defendants

U. S. District Court, East. Dist. Va. , Civil Action No. 3926, 1/5/66

[1954 Code Sec. 6334(a)(3)]

Lien for taxes: Property exempt from levy: Books and tools.--The exemption of books and tools from property of a delinquent taxpayer which is subject to levy applies only to an individual taxpayer, not to a corporation.

George Lincoln Rockwell, Alan Welch, Mathias Koehl, pro se, 6150 Wilson Blvd., Arlington, Va., John Patler, 928 N. Randolph St., Arlington, Va., for plaintiff. Claude V. Spratley, Jr., United States Attorney, P. O. Bldg., Alexandria , Va. , for defendant.

Supplemental Memorandum of Law (12/30/65)

LEWIS, District Judge:

This memorandum is in response to the Court's inquiry at the hearing held on December 29, 19 65, as to whether the statutory provision of Section 6334(a)(3) of the Internal Revenue Code of 1954, exempting from levy the books and tools of a trade, business, or profession of a taxpayer as do not exceed in the aggregate $250 in value, is applicable to a corporation, or only to an individual taxpayer.

Statute Involved

Internal Revenue Code of 1954:

SEC. 6334. PROPERTY EXEMPT FROM LEVY.

(a) Enumeration.--There shall be exempt from levy--

(1) Wearing Appearel And School Books.--Such items of wearing apparel and such school books as are necessary for the taxpayer or for members of his family;

(2) Fuel, Provisions, Furniture, And Personal Effects.--If the taxpayer is the head of a family, so much of the fuel, provisions, furniture, and personal effects in his household, and of the arms for personal use, livestock, and poultry of the taxpayer, as does not exceed $500 in value;

(3) Books And Tools Of A Trade, Business, Or Profession.--So many of the books and tools necessary for the trade, business, or profession of the taxpayer as do not exceed in the aggregate $250 in value.

(4) Unemployment Benefits.--Any amount payable to an individual with respect to his unemployment (including any portion thereof payable with respect to dependents) under an unemployment compensation law of the United States, of any State or Territory, or of the District of Columbia or of the Commonwealth of Puerto Rico.

* * *

Argument

It is the position of the defendants, based on the legislative intent in enacting Section 6334 and on the purpose and policy of exemption laws, that Section 6334(a)(3) is applicable only to an individual taxpayer, and not to a corporation. Present Section 6334 is derived from Section 3691 of the Internal Revenue Code of 1939 which provided:

(a) Enumeration.--There shall be exempt from distraint and sale, if belonging to the head of a family--

(1) School Books And Wearing Apparel.--The school books and wearing apparel necessary for such family; also

(2) Arms.--Arms for personal use;

(3) Livestock.--One cow, 2 hogs, 5 sheep and the wool thereof, provided the aggregate market value of said sheep shall not exceed $50;

(4) Fodder.--The necessary food for such cow, hogs, and sheep, for a period not exceeding thirty days;

(5) Fuel.--Fuel to an amount not greater in value than $25;

(6) Provisions.--Provisions to an amount not greater than $50;

(7) Household Furniture.--Household furniture kept for use to an amount not greater than $300; and

(8) Books And Tools Of Trade Or Profession.--The books, tools, or implements, of a trade or profession, to an amount not greater than $100.

Section 3691, by its own terms, applied only to an individual taxpayer. It is clear that only the "books, tools, or implements, of a trade or profession," of such an individual "to an amount not greater than $100" were exempt from distraint and sale by the Collector.

The legislative reports supporting the enactment of Section 6334 of the Internal Revenue Code of 1954 reveal that the section "is a modernization of existing law with respect to property exempt from levy". House Report No. 1337 contained on page 4556 of 1954 U. S. Code Cong. and Adm. News; Senate Report contained on page 5226 of 1954 U. S. Code Cong. and Adm. News. Nothing is contained in the reports to indicate that Congress contemplated changing or enlarging the exemption provisions to include a corporate taxpayer within Section 6334(a)(3). Quite the contrary, the House and Senate Committee reports indicate that in applying the exemptions to a taxpayer, only an individual was intended. The reports state:

The new provision exempts "necessary" wearing apparel and schoolbooks; fuel, provisions, personal effects, and furniture to the extent of $500; and necessary books and tools for the taxpayer's trade or profession up to $250. (House Ways and Means Committee Report contained on page 4133 of 1954 U. S. Code Cong. and Adm. News; Senate Finance Committee Report contained on page 4776 of 1954 U. S. Code Cong. and Adm. News.)

Furthermore, the statute itself reveals that the word "taxpayer" is intended to apply only to an individual. Section 6334(a)(1) refers to a "taxpayer or for members of his family"; and Section 6334(a)(2) applies "If the taxpayer is the head of a family . . .." In view of the lack of any legislative intent to enlarge the coverage of the exemption provisions under the 1939 Code to include a corporate taxpayer, and the language of the statute itself, the defendants respectfully submit that the provisions of Section 6334(a)(3) are not applicable to the corporation in this action. In this regard, it has been the administrative practice of the Internal Revenue Service, as expressed in the attached memorandum dated December 30, 19 65 from the Director of the Collection Division, not to regard the exemption provided in Section 6334(a)(3) as applicable to a corporate taxpayer.

Moreover, the defendants submit that the purpose and policy of exemption laws stem from considerations of public policy looking toward the rehabilitation and protection of the debtor and his family. Such considerations clearly are inapplicable to corporate debtors. As stated in 22 Am. Jur., Exemptions, page 7:

Exemption laws are the product of an enlightened public policy, which seeks to afford some measure of protection to the family of an unfortunate debtor, as well as to the debtor himself, and incidentally to the public. They are framed not merely in benevolence, but also in the interest of the state in the personal well-being of its citizens. Their purpose is the humane and generous one of securing debtors from unjust and harassing litigation and of protecting them in those pursuits which are necessary to the existence and well-being of the community. By allowing the debtor to retain certain property free from molestation or appropriation by creditors, they thereby extend to him an opportunity of self-support so that he will not become a burden upon the public. Every man, even the extravagant and improvident, owes a first duty to those immediately depending upon him. Also, it is in the interest of the state that no citizen shall be reduced to a condition of destitution so as to be prevented from prosecuting useful industrial employments for which he may be fitted, and that families shall not be deprived by extravagance or misfortune of the shelter and comforts necessary to health and activity. Such laws encourage industry and thrift and the building up of homes by placing beyond the reach of creditors such property as the debtor may require to prosecute his labor or business, whatever his walk in life or his occupation may be. [See also Exemptions, page 14.]

The considerations expressed in the above-quoted language are equally as applicable to the underlying reasons for the enactment of Section 6334 of the Internal Revenue Code of 1954. As stated by the Court of Appeals for the Second Circuit in Kane v. Burlington Savings Bank [63-2 USTC ¶9596], 320 F. 2d 545, 548:

It is clear, as appellant contends that humanitarian considerations underlie the §6334 exemptions from tax levy granted by Congress.

The defendants submit that such "humanitarian considerations" are not present in the case of a corporation, but are meaningful only with respect to an individual taxpayer.

Conclusion

For the foregoing reasons, the defendants respectfully request that this Court find that Section 6334(a)(3) is not applicable to the George Lincoln Rockwell Party, Inc.

Memorandum (12/30/65)

TO: Director, Collection Litigation Division CC:CL

FROM: Collection Division CP:C:DA

SUBJECT: Application of Internal Revenue Code Section 6334:(a)(3)

This is in response to your recent request by telephone concerning the application of the provisions of Internal Revenue Code section 6334:(a)(3) in distraint proceedings.

It is the administrative practice not to regard the exemption provided in the cited section as applicable to corporate entities. We know of no situation where seizure action has deviated from this administrative practice.

Please advise us if we can be of further assistance in this matter. [Signed by Harold E. Snyder, Director.]

Order (1/5/66)

This matter having come on for a hearing on the motion of the defendants to dismiss the complaint, and this Court, having considered the pleadings, said motion and the memoranda filed in support thereof, having heard oral argument and taken testimony thereon, and being of the opinion that the motion should be granted, it is

ORDERED, ADJUDGED and DECREED that this action be dismissed with prejudice and stricken from the docket of this Court.

The Clerk is directed to mail certified copies of this Order to all parties of record.

 

 

 

[86-1 USTC ¶9361] United States of America , Plaintiff-Appellee v. Howard McCargo, Defendant-Appellant

(CA-5), U.S. Court of Appeals, 5th Circuit, 85-4653, 2/19/86 , 783 F2d 507, Affirming unreported District Court decision

[Code Sec. 6334 ]

Seizure of property for nonpayment of tax: Tools of trade: Cash register.--An owner of a fish market was properly sentenced to sixty days' imprisonment for contempt of a magistrate's order to surrender equipment, bank stock, and the contents of the taxpayer's cash register to IRS agents. It was not necessary for the prosecution to introduce the magistrate's certification into evidence and the district court had already taken judicial notice of the certificate. There was ample evidence to support the taxpayer's conviction, but even if a contempt conviction would have been improper had he cooperated with the agents, the taxpayer repeatedly refused to allow the agents to make the seizure of the items and the agents both stated that he did not ask them to wait until the store was free of customers. The sixty-day sentence, along with a $25 assessment, was proper because the fine and sentence were imposed under two different statutes and the sentence was proper because it was important to deter such acts in the future. The taxpayer's claim that it was illegal for the agents to seize the cash register because it was an exempted part of the tools of his trade was not valid, but even if the argument were valid, the taxpayer was in contempt because he did not permit the IRS to seize the cash in the register. He also claimed that it was impossible for him to surrender the bank stock because it was not on the premises, but one agent presented testimony sufficient to support an inference that an envelope which contained the bank stock was at the market.

D.H. Perkins, Jr., Assistant United States Attorney, Shreveport , La. 71101 , for plaintiff-appellee. Irving M. Greenberg, 530 Lane Bldg., Shreveport , La. 711-1, for defendant-appellant.

Before RUBIN, JOHNSON, and JONES, Circuit Judges.

OPINION

RUBIN, Circuit Judge:

A taxpayer was charged with contempt of court for failing to obey a magistrate's order allowing the Internal Revenue Service to seize his equipment, bank stock, and the contents of his cash register. He contended that he was not in contempt because his cash register was exempt from seizure under 26 U.S.C. §6334(a)(3) (1982), and the bank stock was not on the premises. We find the evidence sufficient to support beyond a reasonable doubt the district court's finding that the taxpayer disobeyed the magistrate's order and, therefore, affirm the bench-trial conviction. We further hold that the district court's decision to impose both a sixty-day prison sentence and a $25 assessment was authorized by statute, and not so excessive as to be an abuse of discretion.

I.

On November 24, 1984 , the Internal Revenue Service gave Howard McCargo a notice of intention to levy his property to pay back taxes of $4,148.74. After requesting payment several times, the I.R.S. obtained an order from a federal magistrate authorizing Agent McClung to enter McCargo's fish market "during business hours or the day time" to seize property to satisfy the debt.

On May 17, 1985 , at approximately 3:20 p.m., Agents McClung and Stanfield entered McCargo's fish market, identified themselves as I.R.S. agents, gave McCargo copies of the magistrate's order and the notice of levy, and asked him to pay the amount owed. Several customers were present during the time the agents were in the market. Another person was in the store to help McCargo with his work. At trial, the agents testified that, whenever McCargo would wait on a customer, they would step back from the counter to avoid interfering with his work. McCargo testified that he had asked the agents to wait until his store was free of customers before discussing his tax problems. The agents testified that McCargo never made such a request. McCargo neither paid the amount owed, nor allowed the agents to seize any of his property, and after about twenty minutes, the agents left.

The magistrate certified to the district court the facts constituting the contempt, i.e., McCargo's disobedience of the magistrate's order. Upon petition of the government, the district court issued an order for McCargo to show cause why he should not be held in criminal contempt for disobedience of the magistrate's order. At the outset of the trial, the district court judge stated that he would not impose a penalty of more than six months imprisonment and so there was no necessity for a jury trial. The court found McCargo in contempt, imposed a sixty-day prison sentence, and ordered him to pay $25 to the Crime Victim's fund.

II.

McCargo claims that he should have been acquitted of the contempt charge because the prosecution failed to introduce at trial a copy of the magistrate's certification of the facts supporting the charge. This certification was part of the record at the time of trial but was not offered into evidence.

Under 28 U.S.C. §636(e)(5) (1982), a magistrate must certify to the district court the facts surrounding the contempt charge. The magistrate did so. Neither party has cited any authority concerning whether the certification must be introduced into evidence during the criminal contempt proceeding, and we have found none. The government suggests that the certification served as a procedural device to institute the contempt proceedings and, like an indictment, would therefore not be admissible as evidence. ¹

Even if it were necessary to prove the certification as an element of the government's case, however, the district court could and did take judicial notice of its existence in the record. ²

III.

McCargo contends that the government failed to prove beyond a reasonable doubt that he willfully refused to obey the court order authorizing seizure of his property. He contends that, although he disagreed with the amount owed, he would have complied with the order as soon as his store was free of customers.

As we held in United States v. Hilburn, for a criminal contempt conviction to stand, the evidence must show "both a contemptuous act and a willful, contumacious, or reckless state of mind." ³ In determining whether such a conviction is sufficiently supported by the evidence, however, the evidence is viewed "in the light most favorable to the government." ⁴

Thus viewed, there was ample evidence to support the criminal contempt conviction. Assuming arguendo that a contempt conviction would have been improper had McCargo intended to comply with the order once his customers had left, there was sufficient evidence that McCargo did not intend to do so. For example, Agent McClung testified that McCargo repeatedly refused to allow the agents to make the seizure. Both agents testified that McCargo never asked them to wait until all his customers left, and never indicated that he would discuss the matter with them or comply with the order once his store was empty.

IV.

The court did not lack authority to impose both a term of imprisonment and a $25 assessment. While the contempt statute authorizes either a fine or imprisonment for a criminal contempt conviction, but not both, ⁵ only the prison sentence was imposed on McCargo under the contempt statute. The $25 assessment was imposed under a different statute ⁶ which specifically mandates such assessments. Therefore, the court's imposition of both the monetary assessment and the prison term was within its authority.

The sixty-day sentence is reviewable only for abuse of discretion. ⁷ In a few cases, such a short sentence has been held excessive when imposed for much less significant offenses, such as failing to rise when the judge entered or left the courtroom, or failing to step forward upon the judge's request. ⁸ In United States v. United Mine Workers of America, the Supreme Court stated that, in determining what sentence to impose in a criminal contempt case, a district court could consider "the extent of the willful and deliberate defiance of the court's order, the seriousness of the consequences of the contumacious behavior, the necessity of effectively terminating the defendant's defiance as required by the public interest, and the importance of deterring such acts in the future." ⁹ In this case, the deterrence rationale alone justifies the sixty-day sentence.

V.

McCargo contends that one of the items the agents sought to seize was a cash register that was exempt from seizure under 26 U.S.C. §6334(a)(3) , and that there was no evidence to show that another of the items, his bank stock, was on the premises. He insists that he would have acted differently had the agents sought to seize only the cash in the cash register.

Even assuming that McCargo's objections were valid, however, he refused to comply with the legal portion of the order by permitting the agents to seize the cash. It is no defense to a contempt charge that the defendant refused to comply with one part of a court order because he believed that a second part was illegal and that compliance with a third part was impossible.

Moreover, McCargo's objections are not valid. The statute exempts $1,000 worth of tools of the trade from levy for taxes. ¹⁰ McCargo has never contended that the levy would have left him without $1,000 worth of "tools of the trade" in his store, and there is no evidence that the seizure of the cash register would have been illegal.

As to the bank stock, the district court ruled that McCargo had not shown his inability to comply with the order, and there was evidence to support this finding. Agent McClung testified that the day before he visited McCargo's store to execute the levy, he had asked McCargo to have his bank stock on the premises. He also testified that he saw an envelope on the counter with "an inscription on the front of it, approximately, bank stock, Howard and Bobby McCargo, Security National Bank." This testimony was sufficient to support an inference that the bank stock was in the envelope and on the premises.

For these reasons, the judgment is AFFIRMED.

¹ See United States v. Cox, 536 F.2d 65, 72 (5th Cir. 1976).

² See, e.g., In re Missionary Baptist Foundation of America, 712 F.2d 206, 211 (5th Cir. 1983); ITT Rayonier, Inc. v. United States, 651 F.2d 343, 345 n.2 (5th Cir. 1981); United States v. Verlinsky [72-1 USTC ¶9283 ], 459 F.2d 1085, 1089 (5th Cir. 1972) (on petition for rehearing); 2 C. Wright, Federal Practice & Procedure: Criminal §441 , at 620 (2d ed. 1982).

³ 625 F.2d 1177, 1180 (5th Cir. 1980).

⁴ Id.

⁵ 18 U.S.C. §401 (1982); United States v. Barnette, 546 F.2d 187, 193 (5th Cir.), cert. denied, 434 U.S. 822, 98 S.Ct. 65, 54 L.Ed.2d 79 (1977).

⁶ 18 U.S.C. §3013(a)(1)(A) (Supp. 1984).

⁷ See United States v. Leyva, 513 F.2d 774, 779 (5th Cir. 1975).

⁸ See United States v. Abascal, 509 F.2d 752, 757 (9th Cir.), cert. denied, 422 U.S. 1027, 95 S.Ct. 2621, 45 L.Ed.2d 684 (1975); United States ex rel. Robson v. Malone, 412 F.2d 848, 850-51 (7th Cir. 1969).

⁹ 330 U.S. 258, 303, 67 S.Ct. 677, 701, 91 L.Ed. 884 -- (1947); Accord United States v. Trudell, 563 F.2d 889, 893 (8th Cir. 1977).

¹⁰ 26 U.S.C. §6334(a)(3) (1982).

 

[91-2 USTC ¶50,553] In the Matter of Thomas Lloyd King and Joan P. King, Debtors

U.S. District Court, Dist. Neb., CV 89-0-451, 10/31/91 , Reversing and remanding a Bankruptcy Court decision, 89-2 USTC ¶9559

[Code Secs. 6321 and 6334 ]

Levies: Liens: Exempt property.--The government's tax lien attached to the debtors' personal property even though the property was exempt from levy. The plain language of Code Sec. 6321 allows the attachment of a federal tax lien to all of the debtors' property, including property exempted from levy under Code Sec. 6334 .

MEMORANDUM OPINION AND ORDER

The United States of America, a creditor in debtors' bankruptcy proceeding, appeals the order of the bankruptcy court, dated May 9, 1989 , sustaining the debtors' objection to the government's claim with respect to §6334 of the Internal Revenue Code. Having reviewed the record on appeal and the government's brief on the matter, ¹ the Court finds that the decision of the bankruptcy court should be reversed and the matter remanded for further proceedings consistent with this Memorandum Opinion.

Factual Background

The relevant undisputed facts, as set out in the bankruptcy court's memorandum opinion, are as follows:

Debtors filed a petition for relief under Chapter 13 of the Bankruptcy Code on May 24, 1988 . The debtors' plan was confirmed on August 31, 1988 . Debtors' plan provided for payment of a priority claim of the IRS for the tax year ending December 31, 1985 , in the amount of $3,728.80. The plan also provided for the secured claim of the IRS by the surrender of debtors' interest (estimated at $2,100.00) consisting of earnings, clothes, tools of trade, and household goods. The remainder of the IRS claim is treated as a general unsecured claim.

The IRS filed a second amended proof of claim, dated December 28, 1988 , which asserts various unpaid federal income tax liabilities owed by the debtors. The December 28th proof of claim lists secured tax liabilities in the amount of $4,360.99 arising from debtors' unpaid income taxes for the years 1980 and 1981. In addition, the IRS asserts priority claims with respect to the debtors' unpaid 1985 income taxes.

In re King [89-2 USTC ¶9559 ], 102 B.R. 184, 185 (Bankr. D. Neb. 1989).

The debtors filed an objection to the claim of the IRS, and hearings were held on February 6 and 27, 1989. At the hearings, the government acknowledged that its $4,360.99 claim should be reduced to $2,261.00, ² and thus the bankruptcy court considered debtors' objection only with respect to that amount. The debtors argued that §6334 of the Internal Revenue Code (26 U.S.C. §6334 ) exempted certain items of a debtor's personal property and wages from a tax lien of the IRS and that their property (household furnishings, $1,226.00; carpet laying tools, $500.00; clothing, $485.00; and money, $50.00), totalling $2,261.00, fell under this exemption. The debtors relied on In re Barbier, 84 B.R. 190 (Bankr. D. Nev. 1988), which held that, "Section 6334 * * * exempts property from all forms of execution, not Just levy." Id. at 192. The government argued that although §6334 prohibits levy on exempt property, it does not preclude the attachment of a tax lien on such property. Relying on Barbier, the bankruptcy court sustained the debtors' objection. The government now appeals.

Discussion

This Court may review the bankruptcy court's legal conclusions de novo, but the bankruptcy court's "[f]indings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the bankruptcy court to judge the credibility of the witnesses." Bankruptcy Rule 8013; In re Apex Oil Co., 884 F.2d 343, 348 (8th Cir. 1989).

The sole issue on appeal is whether the bankruptcy court erred in allowing the debtors to exempt personal property under section 6334 ³ of the Internal Revenue Code, with respect to the government's tax lien claim. The government has called the Court's attention to the fact that Barbier, supra, which was relied upon by the bankruptcy court, has since been reversed by the Ninth Circuit Court of Appeals. See United States v. Barbier [90-1 USTC ¶50,107 ], 896 F.2d 377 (9th Cir. 1990).

In United States v. Barbier, supra [90-1 USTC ¶50,107 ], 896 F.2d at 377, the debtor had argued that 26 U.S.C. §6334 , which exempts certain property from administrative levy, also prohibits the attachment of a federal tax lien on the exempted property. The district court agreed, holding that the government's tax lien could not attach to the debtor's §6334 exempt property. The Ninth Circuit reversed the district court, after considering the plain language of 26 U.S.C. §6321 , stating:

Federal tax liens attach to an extremely wide range of property. Section 6321 , relating to tax liens, states: "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.

* * *

The Supreme Court has stated that "[t]he statutory language 'all property and rights to property, appearing in §6321 . . ., is broad and reveals on its face that Congress meant to reach every interest in property that a taxpayer might have." United States v. National Bank of Commerce [85-2 USTC ¶9482 ], 472 U.S. 713, 720-21 (1985).

* * *

Holding that a lien does not extend to property exempt from levy under section 6334 would be inconsistent both with Supreme Court precedent and the statutory purpose of ensuring that the government is able to secure collection of tax revenues.

Id. at 378-79 (emphasis original). The court then proceeded to discern the distinction between a levy and a lien, stating:

A levy forces debtors to relinquish their property. It operates as a seizure by the IRS to collect delinquent income taxes. The IRS's levying power is limited because a levy is an immediate seizure not requiring judicial intervention. A levy connotes compulsion or a forcible means of extracting taxes from "a recalcitrant taxpayer."

* * *

A lien, however, is merely a security interest and does not involve the immediate seizure of property. A lien enables the taxpayer to maintain possession of protected property while allowing the government to preserve its claim should the status of property later change. If, for instance, the debtor later sells his exempt personal property for cash, the IRS would be entitled to obtain such proceeds.

Id. at 379 (citations omitted) (emphasis added). The court concluded, stating:

Reading sections 6334 and 6321 together leads to the conclusion that the former section is a limitation on the government's ability forcibly to seize the taxpayer's property, but not a bar to the government's ability to assert a security interest in such property. The plain words of section 6321 allow a tax lien to be attached to all of the taxpayer's property, including property exempt from IRS levy.

Id. Accord In re Beard [90-1 USTC ¶50,260 ], 112 B.R. 951, 953-54 (Bankr. N.D. Ind. 1990); In re Jackson [88-1 USTC ¶9186 ], 80 B.R. 213, 215 (Bankr. D. Colo. 1987). See also In re Bates [88-1 USTC ¶9124 ], 81 B.R. 63, 64 (Bankr. D. Or. 1987); In re Ridgley, 81 B.R. 65, 69 (Bankr. D. Or. 1987); In re Driscoll, 57 B.R. 322, 327 (Bankr. W.D. Wis. 1986).

The Court agrees with the analysis in United States v. Barbier [90-1 USTC ¶50,107 ], supra, 896 F.2d at 378-79. The plain language of §6321 allows the attachment of a federal tax lien to all of the taxpayer's property, including property exempted from levy under §6334 . Therefore, the Court concludes that the government's tax lien in this case did attach to the §6334 property of the debtors, notwithstanding that such property was exempt from levy. As pointed out in the government's brief, "[T]he Government was not seeking to enforce its tax liens by means of levy, but simply to require the debtors to make provision in their bankruptcy plan for payment that reflected the value of the tax liens." Appellant's Brief at 5. The government is entitled to such provision.

IT IS THEREFORE ORDERED that the bankruptcy court's order of May 9, 1989 , sustaining the debtors' objection to the government's claim, i.e., tax lien, is reversed and this matter is remanded for proceedings consistent with this Memorandum Opinion and Order.

Dated this 31st day of October, 1991.

¹ The debtors did not submit a brief to the Court in this appeal.

² Apparently, the IRS had a $2,100.00 secured claim in debtors' 1980 Ford Bronco. Nebraska State Bank had a $900.00 security interest in the same vehicle. Around the time of confirmation, debtors surrendered possession of the vehicle to Nebraska State Bank, because its claim was superior to the tax lien on the vehicle. Upon learning of such surrender, the government agreed that its secured claim should be reduced to $2,261.00.

³ Section 6334 of the Internal Revenue Code provides in pertinent part:

(a) Enumeration.--There shall be exempt from levy--

(1) Wearing apparel and school books.--Such items of wearing apparel and such school books as are necessary for the taxpayer or for members of his family;

(2) Fuel, provisions, furniture, and personal effects.--If the taxpayer is the head of a family, so much of the fuel, provisions, furniture, and personal effects in his household, and of the arms for personal use, livestock, and poultry of the taxpayer, as does not exceed $1,500 in value;

(3) Books and tools of a trade, business, or profession.--So many of the books and tools necessary for the trade, business, or profession of the taxpayer as do not exceed in the aggregate $1,000 in value.