United States v. Williams, No. 13-2359 (7th Cir. 2015)
Annotate this CaseThe IRS assessed deficiencies against Williams in connection with his income tax for 1996-2005, totaling, with interest and penalties, about $1.3 million. He did not pay. The IRS filed tax liens in Clark County, Indiana, where Williams and his wife Leslie jointly own land. The state and county also filed liens. The district court entered an order that specifies how much Williams owes to each of the three taxing bodies, orders the property to be sold and the net receipts applied to these debts, and details how the money will be divided among the United States, the state, the county, and Leslie. The order states that it is the court’s final decision; the Williamses appealed. The mortgage lender argued that foreclosure governed by Illinois law is not final, and not appealable, because the amount of a deficiency judgment depends on the reasonableness of the sale price, and the validity of the sale itself is contestable to determine whether the outcome is equitable. Illinois provides debtors with multiple opportunities to redeem before a transfer takes effect. The Seventh Circuit affirmed. The foreclosure sale is governed by 26 U.S.C. 7403(c), which does not provide for deficiency judgments and does not give the taxpayer a right of redemption.
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