- Court: 9th Circuit Court of Appeals Archives
- Area(s) of Law: Bankruptcy Law
- Date Filed: 11-18-2022
- Case #: 21-16034
- Judge(s)/Court Below: Chen, J. for the court; and Clifton J.; Bumatay, J. dissenting
- Full Text Opinion
The Internal Revenue Service (IRS) held a claim on Debtor's property from a tax lien penalty. Debtor claimed a $150,000 homestead exemption. Trustee sought to avoid the tax lien to preserve the value of the estate pursuant to 11 U.S.C. §§ 724(a) and 551. §724(a) concerns the trustee’s avoidance of qualifying liens, § 522 withdraws the property interest from the bankruptcy estate and is thus beyond the reach of the trustee for distribution for creditors. A trustee may not avoid a lien on exempt property under § 724(a), because of this, a trustee is not permitted to preserve a tax lien for the benefit of the estate. REMANDED.