Annotations- Homestead Page2

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C

[Paramount Consideration]

To say that district courts need not always go ahead with a forced sale anthorized by §7403 is not to say that they have unbridled discretion. We can think of virtually no circumstances, for example, in which it would be permissible to refuse to authorize a sale simply to protect the interests of the delinquent taxpayer himself or herself. ³⁹ And even when the interests of third parties are involved, we think that a certain fairly limited set of considerations will almost always be paramount.

First, a court should consider the extent to which the Government's financial interests would be prejudiced if it were relegated to a forced sale of the partial interest actually liable for the delinquent taxes. Even the Government seems to concede that, if such a partial sale would not prejudice it at all (because the separate market value of the partial interest is likely to be equal to or greater than its value as a fraction of the total value of the entire property) then there would be no reason at all to authorize a sale of the entire property. Tr. of Oral Arg. 7, 13; Reply Brief 8, n. 5. ⁴⁰ We think that a natural extension of this principle, however, is that, even when the partial interest would be worth less sold separately than sold as part of the entire property, the possibility of prejudice to the Government can still be measured as a matter of degree. Simply put, the higher the expected market price, the less the prejudice, and the less weighty the Government's interest in going ahead with a sale of the entire property. ⁴¹

Second, a court should consider whether the third party with a non-liable separate interest in the property would, in the normal course of events (leaving aside §7403 and eminent domain proceedings, of course), have a legally recognized expectation that that separate property would not be subject to forced sale by the delinquent taxpayer or his or her creditors. If there is no such expectation, then there would seem to be little reason not to authorize the sale. Again, however, this factor is amenable to considerations of degree. The Texas homestead laws are almost absolute in their protections against forced sale. ⁴² The usual cotenancy arrangement, which allows any cotenant to seek a judicial sale of the property and distribution of the proceeds, but which also allows the other cotenants to resist the sale and apply instead for a partition in kind, is further along the continuum. And a host of other types of property interests are arrayed between and beyond.

Third, a court should consider the likely prejudice to the third party, both in personal dislocation costs and in the sort of practical undercompensation described supra, at 25-26.

Fourth, a court should consider the relative character and value of the non-liable and liable interests held in the property: if, for example, in the case of real property, the third party has no present possessory interest or fee interest in the property, there may be little reason not to allow the sale; if on the other hand, the third party not only has a possessory interest or fee interest, but that interest is worth 99% of the value of the property, then there might well be virtually no reason to allow the sale to proceed.

We do not pretend that the factors we have just outlined constitute an exhausive list; we certainly do not contemplate that they be used as a "mechanical checklist" to the exclusion of common sense and consideration of special circumstances. Cf. Moses H. Cone Hospital v. Mercury Construction Corp., 460 U. S. --, -- (1983). We do emphasize, however, that the limited discretion accorded by §7403 should be exercised rigorously and sparingly, keeping in mind the Government's paramount interest in prompt and certain collection of delinquent taxes.

V

[No Equitable Balancing]

In these cases, no individualized equitable balance of the sort we have just outlined has yet been attempted. In the Rodgers case, the record before us, although it is quite clear as to the legal issues relevant to the second consideration noted above, affords us little guidance otherwise. In any event, we think that the task of exercising equitable discretion should be left to the District Court in the first instance.

The Ingram case is a bit more complicated, even leaving aside the fact of the stipulated sale by which we are constrained to treat the escrow fund now sitting in the registry of the District Court as if it were a house. First, as the Court of Appeals pointed out, there remains a question under Texas law as to whether Joerene Ingram abandoned the homestead by the time of the stipulated sale. Second, the Government, in addition to its lien for the individual debt of Donald Ingram, has a further lien for $283.33, plus interest, on the house, representing the joint liability of Donald and Joerene Ingram. Because Joerene Ingram is not a "third party" as to that joint liability, we can see no reason, as long as that amount remains unpaid, not to allow a "sale" of the "house" (i. e., a levy on the proceeds of the stipulated sale) for satisfaction of the debt. Moreover, once the dam is broken, there is no reason, under our interpretation of §7403, not to allow the Government also to collect on the individual debt of Donald Ingram out of that portion of the proceeds of the sale representing property interests properly liable for the debt. On the other hand, it would certainly be to Mrs. Ingram's advantage to discharge her personal liability before the Government can proceed with its "sale," in which event, assuming that she has not abandoned the homestead, the District Court will be obliged to strike an equitable balance on the same general principles as those that govern the Rodgers case.

The judgment of the Court of Appeals in Rodgers is reversed, its judgment in Ingram is vacated, and both cases are remanded with directions that they be remanded to the District Court for further proceedings consistent with this opinion. So ordered.

¹ See also 26 U. S. C. §5004 (lien in case of tax on distilled spirits); §6324 (special liens for estate and gift taxes).

² The validity and priority of a §6321 lien as against certain third parties with subsequently arising interests in the property or interests in property to which the lien has attached is governed by 26 U. S. C. §6323 (1976 ed. and Supp. IV). See also 26 U. S. C. §6322 (period of lien); 26 U. S. C. §6325 (1976 ed. and Supp. IV) (release of lien or discharge of property).

³ See generally 4 B. Bittker, Federal Taxation of Income, Estates, and Gifts ¶111.5 (1981) (hereinafter Bittker); McGregor & Davenport, Collection of Delinquent Federal Taxes, Twenty Eighth Inst. on Fed. Tax. 589 (1976).

⁴ But cf. 26 U. S. C. §6218 (1976 ed. and Supp. IV) (relating to unpaid taxes attributable to a deficiency).

⁵ See also United States v. Bisceglia [75-1 USTC ¶9247], 420 U. S. 141, 145-146 (1975) (26 U. S. C. §§ 7601, 7602); United States v. American Friends Service Committee [74-2 USTC ¶9774], 419 U. S. 7, 12 (1974) (Anti-Injunction Act, 26 U. S. C. §7421).

⁶ Tex. Const., Art. 16, §51, provides in relevant part:

"[T]he homestead in a city, town or village, shall consist of lot, or lots, not to exceed in value Ten Thousand Dollars ["Five Thousand Dollars" before 1970], at the time of their designation as the homestead, without reference to the value of any improvements thereon; provided that the same shall be used for the purposes of a home, or as a place to exercise the calling or business of the homestead claimant, whether a single adult person, or the head of a family."

See also Tex. Civ. Rev. Civ. Stat. Ann. §3833 (Vernon Supp. 1982). No claim seems to be made in these cases that the properties involved are not homesteads by virtue of having exceeded, at the time of designation, the monetary limit set out in the statute.

⁷ See also Tex. Rev. Civ. Stat. Ann. §§ 3834 (Vernon 1966) proceeds of voluntary sale of homestead not subject to garnishment or forced sale within six months after such sale); Ingram v. City of Dallas Dep't of Housing & Urban Rehabilitation [81-2 USTC ¶9533], 649 F. 2d 1128, 1132, n. 6 (CA5 1981) (citing cases applying same rule to fire insurance proceeds).

⁸ See also Tex. Fam. Code Ann. §§ 5.81-5.86 (1975).

⁹ See also Tex. Prob. Code Ann. §§ 283-285 (1980).

¹⁰ The homestead character of property is not destroyed even by divorce, if one of the parties to the divorce continues to maintain the property as a proper homestead. See Renaldo v. Bank of San Antonio , 630 S. W. 2d 638, 639 ( Tex. 1982); Wierzchula v. Wierzchula, 623 S. W. 2d 730, 732 (Tex. Civ. App. 1981). The courts may, however, partition the property, award it to one or the other spouse, or require one spouse to compensate the other, as part of the disposition of marital property attendant to the divorce proceedings. See Hedtke v. Hedtke, 112 Tex. 404, 248 S. W. 21 (1923); Brunell v. Brunell, 494 S. W. 2d 621, 622-628 (Tex. Civ. App. 1973).

¹¹ See Fiew v. Qualtrough, 624 S. W. 2d 335, 337 (Tex. App. 1981) (homestead estate, because it can be lost through abandonment, is not identical to life estate; it nevertheless "partakes of the nature of an estate for life").

¹² Moreover, a homestead estate is treated in Texas as property for which just compensation or its equivalent must be paid in case of condemnation by the state. Lucas v. Lucas, 104 Tex. 636, 143 S. W. 1153 (1912). Cf. infra, at 18-19.

¹³ Mrs. Rodgers's name was misspelled in the complaint filed by the Government. See 649 F. 2d, at 1119, n. 1.

¹⁴ It reversed on an attorney's fees issue not now before us.

¹⁵ The Court of Appeals did suggest that neither the fire nor the intention to sell the house would, in and of themselves, necessarily indicate an abandonment of the homestead. 649 F. 2d at 1132, and n. 6; see n. 7, supra.

¹⁶ Accord, In re Carlson [78-2 USTC ¶9562], 580 F. 2d 1365, 1369 (CA10 1978); Herndon v. United States [74-1 USTC ¶16,127], 501 F. 2d 1219 (CA8 1974); Economy Plumbing & Heating Co. v. United States [72-1 USTC ¶9344], 197 Ct. Cl. 839, 843, 456 F. 2d 713, 716 (1972); United States v. Overman [70-1 USTC ¶9342], 424 F. 2d 1142, 1146 (CA9 1970); see United States v. Bess [58-2 USTC ¶9595], 357 U. S. 51, 55-57 (1963); Bittker ¶111.5.4, at 111-102 ("the tax collector not only steps into the taxpayer's shoes but must go barefoot if the shoes wear out.").

Of course, once a lien has attached to an interest in property, the lien cannot be extinguished (assuming proper filing and the like) simply by a transfer or conveyance of the interest. See generally 26 U. S. C. §6323 (1976 ed. and Supp. IV); United States v. Bess, supra, at 57. Thus, in these cases, liens still attach to the specific property interests transferred by Philip Bosco at his death, and conveyed by Donald Ingram as part of his divorce settlement with Joerene Ingram.

¹⁷ In Mansfield, this Court held that the federal tax collector could not, by a sale pursuant to administrative levy, pass good title to property leased by a tax-delinquent distiller but owned by a third party, even though the third-party owner had previously signed a waiver giving the Government a first lien on the fee interest. "Any other construction would impute to Congress the purpose, in order that the taxes against the delinquent distiller, having only a leasehold interest, might be collected, to seize and sell the interest of the owner of the fee, and to destroy the lien of an incumbrancer, without giving either an opportunity to be heard." 135 U. S. , at 340. Cf. infra, at 17. The Court also noted, however, that

"[i]n order to collect the taxes due from . . . the distiller, [the Government] might have instituted a suit in equity [under the predecessor statute to §7403], to which not only the distiller, who had simply a leasehold interest, but all persons having liens upon, or claiming any interest in, the premises could be made parties; in which suit, it would have been the duty of the court to determine finally the merits of all claims to and liens upon the property, and to order a sale distributing the proceeds among the parties according to their respective interests." 135 U. S. , at 339 (emphasis added).

Read broadly, Mansfield is on "all fours" with our holding today. Read more narrowly, it may be dependent on the fact of the waiver signed by the fee owners. See id., at 339-340. The former reading is more plausible, but we do not rest our decision on it.

In denying even an ambiguity in Mansfield , post, at 9-11, the dissent in our view makes two errors. First, it pays insufficient attention to the general statement quoted above. Second, it ignores the full context of the language upon which it does rely. In context, that language suggests to us that the waiver obtained by the Government gave it, not the right to seek a sale of the entire property, but the right, if it sought a sale of the entire property, to gain access to the entire proceeds of the sale rather than merely the value of the leasehold interest once held by the taxpayr.

¹⁸ The statutory language does pose one difficulty, not discussed or relied on by the Court of Appeals: It might be possible to read the phrase "to enforce the lien of the United States under this title . . . or to subject any property, of whatever nature, of the delinquent, or in which he has any right, title, or interest, to the payment of such tax or liability," (emphasis added) as suggesting that if a lien has attached to a delinquent taxpayer's interest in property, but the delinquent taxpayer has no current interest in that property, then the Government would have no power to seek the sale of the entire property. This reading is plausible on its face, but there is no indication that Congress intended such a bifurcation, and there are no cases of which we are aware that support it. Cf. Bittker ¶111.5.5, at 111-107; see generally n. 16, supra. Moreover, the remainder of §7403 does not appear to recognize such a distinction.

Drawing such a distinction would also make little sense as a policy matter. A third party holding a property interest to which no lien has attached has the same interests vis-a-vis the Government regardless of whether the concurrent property interest to which a lien has attached is still in the hands of the delinquent taxpayer, or has been conveyed to someone else.

Even if we were to adopt such an unprecedented reading of the statute, it might well make no difference in these cases. By virtue of 26 U. S. C. §6901(a), §7403(a) should actually be read to the effect that the Government may seek "to subject any property, of whatever nature, of the delinquent or his liable transferee, or in which he or his liable transferee has any right, title, or interest, to the payment of such tax or liability." See generally Phillips v. Commissioner [2 USTC ¶743], 288 U. S. 589 (1931); Commissioner v. Stern [58-2 USTC ¶9594], 357 U. S. 39 (1958). Whether the present holders of the property interests to which tax liens have attached are liable transferees under §6901 (a) is determined by state law, see Stern, supra, at 42-45, but we do note that (1) Philip Bosco's interests seem now to be held by his estate or heirs, and (2) there may be some question as to whether the conveyance of Donald Ingram's interest to Joerene Ingram was for full value. See generally Bittker ¶111.5.7.

¹⁹ We should note, though, that some States, even outside the context of in rem proceedings to enforce property taxation, were not averse to seizing one person's property without compensation in order to satisfy the unrelated tax delinquency of another person. See, e.g., Sears v. Cottrell, 5 Mich. 251 (1858); Hersee v. Porter, 100 N. Y. 403 (1885). Cf. International Harvester Corp. v. Goodrich, 350 U. S. 537 (1956).

²⁰ See Mansfield v. Excelsior Refining Co., supra, at 339-341; National Bank & Trust Co. of South Bend v. United States [79-1 USTC ¶9101], 589 F. 2d 1298, 1303 (CA7 1978).

²¹ See Mansfield v. Excelsior Refining Co., supra, at 339-341, discussed in n. 17, supra; National Bank & Trust Co. of South Bend v. United States, supra, at 1303; Herndon v. United States [74-1 USTC ¶16,127], 501 F. 2d 1219, 1223 (CA8 1974); Stuart v. Willis [57-1 USTC ¶9330], 244 F. 2d 925, 929 (CA9 1957); cf. S. Rep. No. 1708, 89th Cong., 2d Sess. 17 (1966).

²² If the "wrongfully levied upon" property has already been sold, the third party may, of course, have to settle for monetary reimbursement. See 26 U.S.C. §§ 6343(b)(3), 7426(b)(2)(C).

²³ U. S. Const., Art. I, §8, cl. 1; Amdt. 16.

²⁴ But cf. cases cited in n. 19, supra.

If there were any Takings Clause objection to §7403, such an objection could not be invoked on behalf of property interests that came into being after enactment of the provision. See United States v. Security Industrial Bank, 459 U. S. --, -- (1982). In both cases here, the homestead estates at issue came into being long after 1868.

²⁵ We therefore reject the Government's contention at oral argument, Tr. of Oral Arg. 10, 17-18, that the homestead estate would be irrelevant to a distribution under §7403, and that, assuming that the entire underlying ownership interest is liable for the delinquent taxes, see n. 27, infra, the Government would be entitled to the entire proceeds of the sale.

We also reject the Government's suggestion that the homestead estate held by respondent Rodgers was only contingent at the time that the federal tax lien attached to her husband's interests in her home, and is therefore subordinate to the tax lien. Reply Brief 2, n. 2. The "probate homestead" provided for in Tex. Const., Art. 16, §52, is clearly, with respect to outside creditors, only a continuation of the separate homestead rights vested in each spouse by Tex. Const., Art. 16, §50. See Norman v. First Bank & Trust, 557 S. W. 2d 797, 802 (Tex. Civ. App. 1977).

²⁶ The figures in text are based on the table appearing in Ark. Stat. Ann. §50-705 (Supp. 1981). See also, e.g., 26 CFR §20.2031-10 (1982); Actuarial Publishing House, Inc., Commutation Columns and Valuation Factors Based on 1980 CSO Mortality Table (1981).

²⁷ In the cases before us, the Government argues that, under Texas law, the entire community property (i. e., the underlying ownership interest that we have analogized to a remainder interest), rather than merely the delinquent spouse's half-interest in it, is liable for the indebtedness of the delinquent spouse. Reply Brief 3; see Tex. Fam. Code Ann. §5.61(c) (1975). The Court of Appeals did not address this issue, and we leave it open for determination on remand. See Burks v. Lasker, 441 U.S. 471, 486 (1979).

²⁸ Section 634(c) provides, "Nothwithstanding any other law of the United States, no property or rights to property shall be exempt from levy other than the property specifically made exempt by [§6334(a).]"

²⁹ The Court of Appeals claimed that its view was consistent with that of the Tenth Circuit in United States v. Hershberger [73-1 USTC ¶9289], 475 F. 2d 677 (1973). Hershberger does bear similarities to the Fifth Circuit's analysis, particularly in the distinction it draws between the two different types of homestead rights, and in its adoption of an absolute rule against certain forced cales. As we read Hershberger, however, it relies on an equitable analysis rather than on the inherent forces of state homestead law to defeat a sale of entire property under §7403. Id. at 679.

³⁰ U. S. Const., Art. 6, cl. 2.

³¹ In addition to its reliance on the traditional limitations imposed on lienholders, which we discuss in text, and on its reading of Mansfeld v. Excelsior Refining Co., 135 U. S. 326 (1890), which we discuss at n. 17, supra, the dissent makes a number of additional arguments which require at least a brief response. First, it claims that the weight of authority is on its side. Post, at 6, and nn. 6-7. The dissent's use of sources largely overlooks, however, the important distinction between the power of sale under §7403 on the one hand and the extent of the underlying lien and the power of administrative levy on the other. See supra, at 12, and n. 16, 17, and nn. 20-21. For example, only one of the five cases cited in the dissent's n. 7 deals with §7403. Three of the five deal with administrative levy, and are therefore entirely consistent with the views we express in this opinion, and one concerns a judicial foreclosure conducted in state court without the benefit of §7403. Moreover, the one case that does deal with §7403, United States v. Hershberger [73-1 USTC ¶9289], 475 F. 2d 677 (CA10 1973), gives only meager support to the dissent's position. See n. 29, supra. Similarly, not one of the secondary sources cited in the dissent's n. 6 forcuses on §7403, and most merely report the line of administrative levy cases with which we are in agreement.

Second, the dissent relies on a piece of 1954 legislative history concerning the application of the federal tax lien to interests in tenancies by the entirely. Post, at 7-9. Quite apart from the fact that the dissent's argument depends on events taking place almost a century after enactment of the statute at issue, it suffers from two further serious flaws.

(1) The question at issue in 1954 bears only the most tangential relationship to that at issue here. The amendments at issue in 1954 did not concern §7403. More important, tenancies by the entirety pose a problem quite distinct from that at issue in the case of homestated rights. See Herndon v. United States [74-1 USTC ¶16,127], 501 F. 2d 1219, 1220-1221 (CA8 1974); W. Plumb, Federal Tax Liens 37-38 (1972). The basic holding of the line of cases mentioned by the dissent was, not merely that interests in a tenancy by the entirety could not be sold to satisfy a tax debt of one spouse, but that, as a result of the peculiar legal fiction governing tenancies by the entirety in some States, no ax lien could attach in the first place because neither spouse possessed an independent interest in the property. See, e.g., United States v. American National Bank of Jacksonville [58-2 USTC ¶9564], 255 F.2d 504, 506 (CA5 1958); United States v. Hutcherson [51-1 USTC ¶9249], 188 F. 2d 826, 831 (CA8 1951). Indeed, in most of the cases in this line, the Government was not trying to sell the property out from under the non-delinquent spouse, but was merely trying to exercise one of the more benign rights of a lienholder to which the dissent would automatically relegate the Government in this case. In the homestead context, by contrast, there is no doubt, even under state law, that not only do both spouses (rather than neither) have an independent interest in the homestead property, but that a federal tax lien can at least attach to each of those interests. See Paddock v. Siemoneit, 147 Tex. 571, 584-585, 218 S. W. 2d 428, 436 (1949). Thus, if the tenancy by the entirety cases are correct, they do no more than illustrate the proposition that, in the tax enforcement context, federal law governs the consequences that attach to property interests, but state law governs whether any property interests exist in the first place.

See supra, at 4-5.

(2) Even if the 1954 legislative history cited by the dissent were relevant to the issues in this case, our reading of the pertinent committee reports suggests to us, not that "the Senate foiled an attempt by the House to extend the reach of federal tax liens to tenancies by the entirety," post, at 7-8 (emphasis added), but that the House sought to "clarif[y] the term 'property and rights to property' by expressly including therein the interest of the delinquent taxpayer in an estate by the entirety." H. R. Rep. No. 1337, 83rd Cong., 2r Sess. A406 (1954) (emphasis added), and that the Senate rejected that clarification, not necessarily because it disagreed with it, but more likely because it found it superfluous, see S. Rep. No. 1622, 83d Cong., 2d Sess. 575 (1954) ("It is not clear what change in existing law would be made by the parenthethical phrase [suggested by the House]. The deletion of the phrase is intended to continue the existing law.")

Finally, the dissent argues that our reading of §7403 is rendered less likely by the fact that "[p]rior to 1936, . . . the predecessor to §7403(c) required a court at the Government's request to sell the property in which the tax debtor had an interest." Post, at 12. As we make clear in our discussion of the may/shall issue, infra, at 28-31, however, we are not at all convinced that a sale of the undivided property was mandatory even prior to 1936.

³² See 1 L. Orgel, Valuation Under the Law of Eminent Domain §118, at 511 (2d ed. 1953) (hereinafter Orgel).

³³ See, e.g., United States v. 403.15 Acres of Land, More or Less, 316 F. Supp. 655, 657-658 (MD Tenn. 1970); United States v. 380 Acres of Land, 47 F. Supp. 6 (WD Ky. 1942); Bonner v. Peterson, 44 Ill. 253, 259 (1867); In re Camp, 126 N.Y. 377, 27 N. E. 799 (1891); Redevelopment Commission of Greenville v. Capehart, 268 N. C. 114, 118, 150 S. E. 2d 62, 65 (1966); Lucas v. Lucas, 104 Tex., at 641-642, 143 S. W., at 1155-1156 (condemantion of homestead).

But compare, e.g., United States v. 818.76 Acres of Land, More or Less, 310 F. Supp. 210 (WD Mo. 1969); Brugh v. White, 267 Ala. 575, 103 So. 2d 800 (1957); School District of Colombus v. Jones, 229 Mo. 510, 129 S. W. 705 (1910); Aue v. State, 77 S. W. 2d 606 (Tex. Civ. App. 1934), all allowing approtionment.

See generally A. Jahr, Law of Eminent Domain: Valuation and Procedure §129 (1953); 4 J. Sackman, Nichols' Law of Eminent Domain §12.46[1] (rev. 3d ed. 1980); 1 Orgel §118.

³⁴ See Haig v. Agee, 453 U. S. 280, 294, n. 26 (1981); Anderson v. Yungkau, 329 U. S. 482, 485 (1947); Farmers & Merchants Bank v. Federal Reserve Bank of Monroe, 262 U. S. 649, 662-663 (1923); Thompson v. Lessee of Carroll, 63 U. S. (22 How.) 422, 434 (1859).

³⁵ The 1936 provision was introduced in the Senate as a committee-approved floor amendment to a comprehensive revenue bill originating in the House. 80 Cong. Rec. 9072 (1936). Its origins can be traced, however, to an earlier unpassed House bill seeking to amend certain administrative features of the tax laws. See H. R. 12793, 74th Cong., 2d Sess. (1936). The impetus for the provision, as explained in the House Report accompanying the earlier bill, was that the only then-existing remedy for the enforcement of tax liens against personal property was administrative levy, which in certain cases caused considerable hardship to both the taxpayer and the Government. The receivership option now contained in §7408(d) was similarly conceived as a means of avoiding undue disruption of ongoing concerns whose assets were seized as part of a tax enforcement effort. See H. R. Rep. No. 2818, 74th Cong., 2d Sess. 7-8 (1936).

³⁶ Virtually the only difference between the earlier House version and the floor amendment introduced in the Senate was the crucial substitution of "may" for "shall" in the descriptions of both the court's power to order a forced sale and its power to appoint a receiver. The sponsor of the floor amendment, however, only had the following to say about its significance: "Mr. President, this amendment would permit the collector of internal revenue to apply to the United States courts, to file a petition in equity to enforce a lien for taxes where he has reason to believe the taxpayer will not be able to meet his obligations, and where the public interest will be prejudiced by resorting to the provisions in the present law, for distraint on the taxpayer's assets. In other words, it is an amendment more favorable to the taxpayer than are the provisions of present law." 80 Cong. Rec., at 9072 (Sen. Walsh).

Although the last sentence of Senator Walsh's comments might, taken out of context, be read to refer to the change from "shall" to "may," we think it more likely that he was referring to the same concerns that motivated the earlier House version.

³⁷ This is even clearer in the statutory language as it existed prior to 1954: "In any case where there has been a refusal or neglect to pay tax, . . . the Attorney General at the request of the Commissioner of Internal Revenue may direct a bill in chancery to be filed, . . ." See Revenue Act of 1936, Pub. L. No. 740, §802, 49 Stat. 1648, 1743-1744. The language used in the 1954 Code was presumably adopted to conform to Federal Rule of Civil Procedure 2, but it was not intended to effect any material change from previous law. See H. R. Rep. No. 1337, 83rd Cong., 2d Sess. A431 (1954).

³⁸ See, e.g., Semmes Nurseries, Inc. v. McDade, 288