Document Type

Article

Publication Date

Fall 2002

Publication Title

Real Property, Probate and Trust Journal

Publication Title (Abbreviation)

Real Prop., Prob. & Tr. J.

Volume

37

Issue

3

First Page

415

Last Page

466

Abstract

In April 2002, the Supreme Court of the United States decided United States v. Craft. The Court held that the federal tax lien attaches to a tax-debtor spouse’s interest in property held in tenancy by the entirety even when the other spouse does not owe tax and state law provides that entireties property and interests cannot be reached by separate creditors of only one spouse.

Craft was correctly decided. The older, contrary view that Craft displaced was fundamentally at odds with federal tax collection analysis as laid out by the Court. In addition, the old view invited tax abuse and created unfairness.

Despite the wisdom of Craft, the decision has troubled some commentators. This is not surprising. As those involved in law reform efforts will readily attest, human beings, especially legal professionals, tend to eye change with suspicion. Though unsurprising, the concern about Craft is unnecessary. The message of this Article is that Craft is neither radical nor dangerous. Some of the concerns are misplaced. Other, more legitimate concerns can be assuaged by sensible answers to the implementation issues that arise as a result of Craft.

Part II of this Article describes the issue addressed in Craft and the Court's resolution of that issue. Parts III and IV address the two concerns most frequently voiced about Craft. Part III maintains that Craft does not impermissibly impinge on the traditional role of the states in establishing property and debtor-creditor rules. Part IV describes how the rights and legitimate interests of the spouses not owing tax can be safeguarded in light of Craft.

A theme underlying this Article is that the Craft decision is not, and should not be viewed as, a bolt from out of the blue. The decision was foreshadowed by earlier Court cases and represents the application of well-established rules and principles to the entirety area. We have lived with those rules and principles successfully; likewise, we can adapt to Craft without undue disruption or inconvenience.

Rights

Text © 2002 Steve R. Johnson

Comments

First published in Real Property, Probate and Trust Journal.

Faculty Biography

http://www.law.fsu.edu/our-faculty/profiles/johnson