Unpublished Disposition, 898 F.2d 156 (9th Cir. 1990)

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U.S. Court of Appeals for the Ninth Circuit - 898 F.2d 156 (9th Cir. 1990)

Elaine C. LEE, Plaintiff-Appellant,andRichard A. Lee, Plaintiff,v.C. NGUYEN; A. Muhammud; Ms. Bush; Ms. Kaminski; D.Chong; Internal Revenue Service; United Statesof America, Defendants-Appellees.

No. 88-6711.

United States Court of Appeals, Ninth Circuit.

Submitted March 8, 1990.* Decided March 20, 1990.

Before GOODWIN, CANBY and LEAVY, Circuit Judges.


MEMORANDUM** 

Elaine C. Lee (Lee) appeals in propria persona from an order of the district court denying her motion for a preliminary injunction and dismissing her complaint with prejudice.1  Lee brought an action for wrongful levy against the Internal Revenue Service and certain of its agents under 26 U.S.C. § 7426(a) (1),2  seeking, among other things, injunctive relief pursuant to 26 U.S.C. § 7426(b) (1).

Lee's problems arose in October of 1988 when the IRS levied on her husband's community property interest in her wages at Lockheed Corporation. The IRS levied on the wages because Lee's husband had failed to pay the taxes he owed for the tax year 1982. The amount of the levy was one half of Ms. Lee's wages.

Lee states that she was not married to Mr. Lee in 1982. She contends California law prohibits the IRS from collecting her earnings to satisfy a premarital debt of her spouse. She cites California Civil Code Section 5120.110(b), which provides in part: "The earnings of a married person during marriage are not liable for a debt incurred by the person's spouse before marriage."

Lee is mistaken in her arguments. Section 6321 of the Internal Revenue Code provides that the amount of the delinquent taxpayer's liability " '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.' " 26 U.S.C. § 6321; United States v. Overman, 424 F.2d 1142, 1144 (9th Cir. 1970); see also 26 U.S.C. § 6331(a) (provides for a levy "upon all property and rights to property"). The IRS looks to state law only to ascertain whether the taxpayer's interest is "property" or "rights to property." Id. (citing Aquilino v. United States, 363 U.S. 509 (1960); United States v. Bess, 357 U.S. 51 (1957)). Beyond that, " 'once it has been determined that state law creates sufficient interests in the [taxpayer] to satisfy the requirements of [the statute], state law is inoperative,' and the tax consequences thenceforth are dictated by federal law." United States v. National Bank of Commerce, 472 U.S. 713, 722 (1985) (quoting Bess, 357 U.S. at 55).

Therefore, state law that regulates creditor's rights, such as Cal.Civ.Code 5120.110(b), does not apply to the United States "because the United States has not looked to state law to decide how to enforce federal tax liens." Id. at 1146 (citing Aquilino, 363 U.S. at 512-14).

California law provides that the appellant's wages are the community property of the marriage. Cal.Civ.Code Sec. 5110 (West 1990). Therefore, Mr. Lee has a property interest in his wife's wages and they are a proper object of an IRS levy.

Lee also contends her due process rights have been violated because she was not allowed to challenge the IRS's action. However, third parties are not entitled to contest the merits of a tax assessment. Only the taxpayer may do so. Al-Kim, Inc. v. United States, 610 F.2d 576, 579 (9th Cir. 1979).

The district court correctly denied the request for a preliminary injunction and dismissed the complaint.

AFFIRMED.

 *

The panel unanimously finds this case suitable for submission on the record and briefs and without oral argument. Fed. R. App. P. 34(a) and Ninth Circuit Rule 34-4

 **

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3

 1

This court has held that " [o]rdinarily, the dismissal of a complaint without the dismissal of the underlying action is not considered an appealable final order under 28 U.S.C. § 1291." Partington v. Gedan, 880 F.2d 116, 120 (9th Cir. 1989). However, the dismissal of a complaint may be considered final and appealable if there " 'are special circumstances which make it clear that a court determined that the action could not be saved by any amendment of the complaint.' " Scott v. Eversole Mortuary, 522 F.2d 1110, 1112 (9th Cir. 1975) (quoting Jackson v. Nelson, 405 F.2d 872, 873 (9th Cir. 1968)), or " [i]f it appears that the district court intended the dismissal to dispose of the action." Hoohulia v. Ariyoshi, 741 F.2d 1169, 1171 n. 1 (9th Cir. 1984)

Because it appears here that the district court intended to dispose of the action, and not merely the complaint, we have jurisdiction.

 2

Section 7426(a) (1) states:

Wrongful levy--If a levy has been made on property or property has been sold pursuant to a levy, any person (other than the person against whom is assessed the tax out of which such levy arose) who claims an interest in or lien on such property and that such property was wrongfully levied upon may bring a civil action against the United States in a district court of the United States. Such action may be brought without regard to whether such property has been surrendered to or sold by the Secretary.

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