Corrie Miles v. Commissioner of Internal Revenue

This disposition is not appropriate for publication and is not precedent*
except as provided by 9th Cir. R. 36-3.
The panel unanimously concludes this case is suitable for decision**
without oral argument. See Fed. R. App. P. 34(a)(2).
The Honorable James K. Singleton, United States District Judge for***
the District of Alaska, sitting by designation.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CORRIE MILES,
Petitioner - Appellant,
v.
COMMISSIONER OF INTERNAL
REVENUE,
Respondent - Appellee.
No. 07-74476
Tax Ct. No. 16887-05L
MEMORANDUM*
Appeal from the United States Tax Court
Juan F. Vasquez, Judge, Presiding
Submitted August 6, 2010**
Pasadena, California
Before: KOZINSKI, Chief Judge, WARDLAW, Circuit Judge, and SINGLETON,
Senior District Judge.***
FILED
OCT 07 2010
MOLLY C. DWYER, CLERK
U .S. C OU R T OF APPE ALS

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Miles has not introduced evidence that she actually transferred the funds in1
her IRA to an ERISA-qualified pension plan.
Corrie Miles appeals the United States Tax Court’s decision that the
Commissioner of Internal Revenue may collect unpaid federal income tax
liabilities from her retirement assets. We affirm.
In 1998 and 1999 the Commissioner filed federal tax liens for Miles’ 1997
and 1998 tax liabilities which attached to her pre-Chapter 7 IRA to the extent of its
then value. Although the bankruptcy court discharged her personal tax liability,
the pre-existing liens on her IRA remain enforceable post-discharge. Connor v.
United States (In re Connor), 27 F.3d 365, 366 (9th Cir. 1994). Therefore, the Tax
Court correctly concluded that the Commissioner could proceed in rem against
Miles’ IRA to the extent of $142,545.90 – the amount of the pre-petition funds in
the IRA.
The Tax Court also properly concluded that the liens remain valid even after
Miles allegedly transferred her IRA into an ERISA-qualified plan. The transfer of1
property following the attachment of a lien does not affect the lien itself. United
States v. Bess, 357 U.S. 51, 57 (1958). Therefore, Miles could not in effect
extinguish the lien by transferring the IRA funds to a different account. United
States v. Rodgers, 461 U.S. 677, 691 n.16 (1983).

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Any funds Miles transferred from her IRA to an ERISA-qualified plan are
subject to levy by the IRS. I.R.C. § 6331 authorizes the IRS to levy “all property
and rights to property” to collect assessed income tax liabilities. See United States
v. Nat’l Bank of Commerce, 472 U.S. 713, 719-20 (1985). And while I.R.C. §
6334 specifically exempts certain pension plans from levy — such as those under
the Railroad Retirement Act — ERISA pension plans are not so exempt.
The Tax Court also properly rejected Miles’s assertion that she has no
existing property rights in an ERISA account that is not in “payout” status. An
ERISA planholder has a nonforfeitable right in the accrued benefits of the plan. 29
U.S.C. § 1053(a)(1). “[N]onforfeitable” is defined as an unconditional claim to a
deferred benefit of the plan arising from the participant’s contributions. 29 U.S.C.
§ 1002(19). The IRS may collect and levy on “post-retirement payments that
otherwise would have automatically gone to the taxpayer.” United States v. Novak,
476 F.3d 1041, 1062 (9th Cir. 2007) (en banc). Miles had the burden of showing
that she transferred the funds in her IRA to an ERISA-qualified plan that was not
in payout status. See id. at 1064. Because she failed to meet that burden, the IRS

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The IRS moved to strike a portion of Miles’ amended opening brief.2
Because we affirm the judgment in favor of the IRS without relying on the
disputed section, we deny the motion as moot.
settlement officer’s final proposal to Miles was not an abuse of discretion. See
Fargo v. Comm’r, 447 F.3d 706, 709 (9th Cir. 2006).2
AFFIRMED.

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