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(4th Cir. 1985), affg. 53 Bankr. 986 (E.D. Va. 1984), affg. 36
Bankr. 826 (Bankr. E.D. Va. 1984).
In United States v. Barlow’s, Inc., supra at 1099-1100, the
Commissioner and a third-party debtor of the taxpayer entered
into an installment payment agreement for an account receivable,
which was due the taxpayer, without the taxpayer’s participation.
The Commissioner failed to sell the taxpayer’s account receivable
pursuant to section 6335, and the Commissioner failed to take any
action against the third-party debtor after the third-party
debtor defaulted on the installment payment agreement. Id.11 The
District Court, 53 Bankr. at 988, decided that the Commissioner
had taken dominion and control over the account receivable, and
by so doing “precluded Barlows [sic] from proceeding against the
account itself in an effort to defray its tax liabilities.
Section 6332(d) of the Internal Revenue Code divests the
11The District Court below placed weight on two factors in
deciding that the Commissioner had “dominion and control” over
the levied-upon property in issue: The Commissioner’s failure to
sell the property under sec. 6335, and the payment agreement
between the Commissioner and the third-party debtor that was made
without the taxpayer’s participation. See United States v.
Barlow’s, Inc., 36 Bankr. 826 (E.D. Va. 1984). On appeal, the
Court of Appeals for the Fourth Circuit decided that the District
Court should be affirmed because the Commissioner exercised
“dominion and control” over the property and the Commissioner
failed to sell the property pursuant to sec. 6335. United States
v. Barlow’s, Inc., 767 F.2d 1098, 1100 (4th Cir. 1985). Thus,
the Court of Appeals did not include the sec. 6335 analysis in
determining whether the Commissioner had exercised “dominion and
control” over the property. Petitioners failed to address sec.
6335 in their moving papers.
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