Judge Goeke takes us through the lien-levy compare-and-contrast when criminal restitution is on the menu, in Paul M. Daugerdas, Docket No. 7350-20L, filed 1/10/21. Paul, ex-attorney, took some heavy-duty falls in USDCSDNY for dodgeflogging, good for 15 (count ’em, 15) years in the slammer, plus around $371 million in criminal restitution.

Section 6201(a)(4), the “as if” provision allowing collection of criminal restitution as a tax, is the key. Title 26 doesn’t create the lien, Title 18 does. Paul tries to distinguish between loss of tax and failure to pay, but that doesn’t fly. “Petitioner seeks to distinguish a tax loss from a failure to pay any tax. For purposes of section 6201(a)(4), we find no distinction in the light of the plain language of the statute and the legislative history that establish that Congress intended to extend respondent’s section 6201(a)(4) authority to tax-related title 18 offenses.” Order, at p. 5.

It was Paul’s clients who didn’t pay, but that’s a mox nix under Bontrager. See my blogpost “One Man’s Tax,” 12/12/18.

Levy depends upon what the District Court ordered. Judge Goeke sends IRS and Paul back to Appeals, so the SO can apply 2 Cir learning, even though Paul is in IL, thus Golsenized to 7 Cir. The question is whether District Court ordered immediate payment (hence levy) or not, and whether or not Paul is destitute, even if it did.

As for the lien, that’s automatic. “The plain text of section 3613, title 18 makes clear that the lien is automatic upon the entry of the judgment and is for the full amount of the restitution. The statute does not require that that the criminal defendant have a current payment obligation under the restitution order. Thus, the lien automatically arises upon entry of the judgment under section 3613(c), title 18, irrespective of how the criminal restitution order is interpreted.” Order, at p. 6.

Split decision on summary J. Lien stays, levy awaiting remand.