B-174326, NOV 22, 1971

B-174326: Nov 22, 1971

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IS INDEBTED TO RIVERSIDE MAINTENANCE. NOTICES OF LEVY WERE RECEIVED FROM THE TERRITORY OF GUAM DEPARTMENT OF REVENUE AND TAXATION ON JULY 30. THE RELATIVE PRIORITY OF THE LIENS IS ESTABLISHED BY THE COMMON LAW RULE OF "FIRST IN TIME. TO COLONEL RITCHARD: THIS IS IN REPLY TO YOUR LETTER OF OCTOBER 7. IT IS REPORTED THAT THE AIR FORCE IS INDEBTED TO RIVERSIDE MAINTENANCE. 771.32 FOR CUSTODIAL SERVICES RENDERED UNDER A CONTRACT WHICH WAS COMPLETED ON JUNE 30. CAPTAIN TREINEN WAS SERVED WITH TWO NOTICES OF LEVY ON RIVERSIDE MAINTENANCE BY THE TERRITORY OF GUAM DEPARTMENT OF REVENUE AND TAXATION. ONE LEVY WAS FOR A JEOPARDY ASSESSMENT OF $11. WAS FOR F.I.C.A. BEFORE SUCH LEVIES WERE HONORED.

B-174326, NOV 22, 1971

CONTRACTS - TAX LEVIES ON CONTRACTOR - PRIORITY OF CLAIMS CONCERNING REQUEST BY CAPTAIN J. A. TREINEN AS ACCOUNTING AND FINANCE OFFICER, ANDERSON AFB, GUAM, ON PAYMENT OF TAX LEVIES. WHILE THE A.F. IS INDEBTED TO RIVERSIDE MAINTENANCE, INC. FOR CUSTODIAL SERVICES COMPLETED JUNE 30, 1971, NOTICES OF LEVY WERE RECEIVED FROM THE TERRITORY OF GUAM DEPARTMENT OF REVENUE AND TAXATION ON JULY 30, 1971 AND FROM THE IRS LOS ANGELES DISTRICT OFFICE ON AUGUST 3, 1971. BECAUSE THE PERFECTED GUAM TAX LIEN HAS THE SAME FORCE AND EFFECT AS A FEDERAL TAX LIEN, THE RELATIVE PRIORITY OF THE LIENS IS ESTABLISHED BY THE COMMON LAW RULE OF "FIRST IN TIME, FIRST IN RIGHT." THEREFORE, THE GUAM LEVIES SHOULD BE PAID.

TO COLONEL RITCHARD:

THIS IS IN REPLY TO YOUR LETTER OF OCTOBER 7, 1971, FORWARDING CAPTAIN J. A. TREINEN'S REQUEST FOR OUR ADVANCE DECISION WITH RESPECT TO TAX LEVIES SERVED UPON HIM IN HIS CAPACITY AS ACCOUNTING AND FINANCE OFFICER AT ANDERSEN AIR FORCE BASE, GUAM.

IT IS REPORTED THAT THE AIR FORCE IS INDEBTED TO RIVERSIDE MAINTENANCE, INC., IN THE AMOUNT OF $11,771.32 FOR CUSTODIAL SERVICES RENDERED UNDER A CONTRACT WHICH WAS COMPLETED ON JUNE 30, 1971. ON JULY 30, 1971, CAPTAIN TREINEN WAS SERVED WITH TWO NOTICES OF LEVY ON RIVERSIDE MAINTENANCE BY THE TERRITORY OF GUAM DEPARTMENT OF REVENUE AND TAXATION. ONE LEVY WAS FOR A JEOPARDY ASSESSMENT OF $11,860.99 FOR TERRITORIAL WITHHOLDING TAX AND CORPORATE INCOME TAX, WITH AN ASSESSMENT DATE OF JULY 28, 1971. THE OTHER LEVY, IN THE NAME OF THE INTERNAL REVENUE SERVICE (IRS), WAS FOR F.I.C.A. TAX OWED TO THE UNITED STATES IN THE AMOUNT OF $119.61. BEFORE SUCH LEVIES WERE HONORED, CAPTAIN TREINEN RECEIVED BY MAIL A NOTICE OF LEVY DATED AUGUST 3, 1971, FROM THE IRS LOS ANGELES DISTRICT OFFICE ON RIVERSIDE MAINTENANCE FOR $16,440.47, WITH AN ASSESSMENT DATE OF AUGUST 3, 1971. OUR DECISION IS REQUESTED AS TO WHICH LEVIES SHOULD BE HONORED.

SECTION 31 OF THE ORGANIC ACT OF GUAM, AUGUST 1, 1950, 64 STAT. 392, AS AMENDED, 48 U.S.C. 1421IA) PROVIDES THAT THE "INCOME-TAX LAWS IN FORCE IN THE UNITED STATES OF AMERICA *** SHALL BE HELD TO BE LIKEWISE IN FORCE IN GUAM," AND THAT SUCH LAWS IMPOSE "A SEPARATE TERRITORIAL INCOME TAX, PAYABLE TO THE GOVERNMENT OF GUAM *** ." 48 U.S.C. 1421IB). SUBSECTION (G) STATES THAT:

"THE GOVERNMENT OF GUAM SHALL HAVE A LIEN WITH RESPECT TO THE GUAM TERRITORIAL INCOME TAX IN THE SAME MANNER AND WITH THE SAME EFFECT, AND SUBJECT TO THE SAME CONDITIONS, AS THE UNITED STATES HAS A LIEN WITH RESPECT TO THE UNITED STATES INCOME TAX. SUCH LIEN IN RESPECT OF THE GUAM TERRITORIAL INCOME TAX SHALL BE ENFORCEABLE IN THE NAME OF AND BY THE GOVERNMENT OF GUAM *** ."

THE INTERNAL REVENUE CODE OF 1954 ESTABLISHES A LIEN IN FAVOR OF THE UNITED STATES FOR ALL UNPAID TAXES, 26 U.S.C. 6321, AND SUCH LIEN ARISES AT THE TIME A TAX ASSESSMENT IS MADE. 26 U.S.C. 6322. THE IRS IS AUTHORIZED TO COLLECT THE UNPAID TAXES "BY LEVY UPON ALL PROPERTY AND RIGHTS TO PROPERTY *** BELONGING TO" A PERSON LIABLE FOR THE TAX. U.S.C. 6331. THE ORGANIC ACT SPECIFICALLY MAKES THESE PROVISIONS APPLICABLE TO GUAM. 35 COMP. GEN. 620 (1956).

IN THE ABSENCE OF A STATUTORY PRIORITY, THE "FIRST IN TIME, FIRST IN RIGHT" DOCTRINE IS GENERALLY APPLICABLE IN DETERMINING WHICH OF TWO COMPETING LIENS SHALL HAVE PRIORITY. SEE UNITED STATES V EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, 384 U.S. 323, 327 (1966). LIGHT OF THE CLEAR CONGRESSIONAL INTENT THAT A PERFECTED GUAM TAX LIEN SHALL HAVE THE SAME FORCE AND EFFECT AS A FEDERAL TAX LIEN, THE RELATIVE PRIORITY OF THE LIENS IS ESTABLISHED BY THE COMMON LAW RULE OF "FIRST IN TIME, FIRST IN RIGHT."

THEREFORE, THE GUAM LEVIES HAVE PRIORITY OVER THE SUBSEQUENTLY FILED IRS LEVY, AND SHOULD BE PAID.