United States v. Boardwalk Motor Sports, Ltd., et al., No. 11-40871 (5th Cir. 2012)
Annotate this CasePlains Capital and Boardwalk appealed a judgment finding them liable for conversion of the proceeds from a sale of a car that was subject to a tax lien. Boardwalk sold the car and gave the proceeds to Plains Capital to get Plains Capital to release the title, and Plains Capital applied the money to the taxpayer's debt. The IRS attempted to obtain the proceeds by levy after Plains Capital had applied the money to the debt, so Plains Capital claimed it no longer had any of the property. The court held that neither party was liable for conversion under Texas law but that Plains Capital was liable for failure to honor a tax levy. Because the court found that Plains Capital was liable for failure to honor a tax levy, interest accrued from the date it failed to honor the levy until the date the judgment was satisfied, at the underpayment rate in I.R.C. 6621(a)(2). Accordingly, the court reversed the judgment and remanded for further proceedings.
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