Fred A. Cardinal and Gloria M. Cardinal v. United States

RYAN, Circuit Judge.

What is the proper measure of a taxpayer’s interest in real property purchased under a land contract for purposes of assessing the value of a federal tax lien? The district court held that the taxpayers’ interest in the real property was limited to the amount the taxpayer had paid under the contract, 817 F.Supp. 647. We disagree and reverse.

Federal law governs the priority of a tax lien relative to other claims to property. Aquilino v. United States, 363 U.S. 509, 513-14, 80 S.Ct. 1277, 1280-81, 4 L.Ed.2d 1365 (1960). However, state law generally determines what…