Mildred Babb v. Frank S. Schmidt, District Director of Internal Revenue and the United States of America

In 1959 Kroger Babb, now husband of the appellant, was assessed by the district director, pursuant to a decision of the Tax Court, for taxes, interest and penalties arising out of the 1944 and 1945 tax years. In 1961 appellant Mildred Babb and Kroger Babb were married. In 1970 the director served a levy upon certain bank accounts in California and Nevada, community property of these California citizens, for the purpose of obtaining partial satisfaction of the husband’s premarital tax liabilities described above.

Plaintiff brought this action under 26 U.S.C. § 7426 for wrongful levy upon her community interest in the bank accounts. The district court granted summary judgment for the Government.

26 U.S.C. § 6321 creates “a lien in favor of the United States upon all property and rights to property * * * belonging to” a person who has neglected or refused to pay federal taxes for which he is liable. The issue presented here is whether this lien reaches a California wife’s community one-half interest where the lien is for taxes owed by the husband before the marriage.

In Aquilino v. United States, 363 U.S. 509, 512-513 , 80 S.Ct. 1277, 1280 , 4 L.Ed.2d 1365 (1960), the…