Summary
This appellate opinion addresses whether a third-party transferee has standing to intervene in a federal tax collection action to set aside a default judgment entered against the original taxpayer. The District Court denied the appellant's motion to intervene, concluding that only the taxpayer may challenge the validity of a tax assessment. The United States Court of Appeals for the District of Columbia Circuit affirmed the denial, holding that the appellant lacked standing to question the assessment or vacate the default judgment.
Topics
Practice areas
Questions Presented
- Whether a third‑party/transferee of property from a taxpayer has standing to intervene to set aside a default judgment entered in an action brought by the United States against the taxpayer to reduce tax assessments to judgment.
Holdings
- A third‑party transferee of a taxpayer does not have standing to intervene to set aside a default judgment in a tax‑assessment action; only the taxpayer may challenge the assessment.
Key quotations
“The sole issue on appeal is whether a third‑party/transferee of property from a taxpayer has standing to intervene to set aside a default judgment entered in an action brought by the United States against the taxpayer to reduce tax assessments to judgment.” (at 12)
“We affirm.” (at 13)
Factual background
Katherine G. D. Bourbon Formige, a dual U.S./French national, paid taxes only on U.S. property until 1967 when French currency restrictions were lifted. After renouncing U.S. citizenship, she transferred her remaining U.S. assets to her daughters. The IRS assessed a deficiency and obtained a default judgment against Formige; her daughter Beatrice Scott‑Hansen sought to intervene to set aside that judgment.
Procedural history
The District Court denied the United States' motion to intervene and a subsequent motion for reconsideration, holding that only a taxpayer may challenge a tax assessment. The United States appealed that denial.