     Case: 15-10352    Document: 00513347867     Page: 1   Date Filed: 01/19/2016




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT


                                No. 15-10352
                              Summary Calendar
                                                                 United States Court of Appeals
                                                                          Fifth Circuit

                                                                        FILED
                                                                 January 19, 2016
UNITED STATES OF AMERICA,
                                                                   Lyle W. Cayce
                                                                        Clerk
             Plaintiff - Appellee
v.

RICHARD TILFORD,

             Defendant
v.

GINA TILFORD,

             Movant–Appellant



                 Appeal from the United States District Court
                      for the Northern District of Texas


Before HIGGINBOTHAM, ELROD, and SOUTHWICK, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
                                        I.
      Movant-appellant Gina Tilford was married to Richard Tilford from 1981
to 2014. In 2012, Mr. Tilford pled guilty to failing to file a tax return in 2006.
The Court sentenced him to twelve months’ imprisonment, one year supervised
release, and restitution in the amount of $453,547.00. Following the filing of
the judgment, the U.S. Attorney’s Office applied for and received a writ of
garnishment targeting the property and wages of Mr. and Mrs. Tilford. On
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                                        No. 15-10352
January 22, 2014, the Tilfords finalized their divorce. Mrs. Tilford alleges that
for several years prior to the official end of their marriage, Mr. Tilford was
emotionally abusive.
       The district court entered an order on March 31, 2014, directing Mrs.
Tilford’s employer to withhold the portion of her earnings that accrued prior to
the date of the divorce, including paid time off and contributions to her 401(k)
and 403(b) retirement plans. Mrs. Tilford filed a Motion to Quash the Writs of
Garnishment, as well as a Motion to Alter or Amend Judgment. The district
court denied both, and finalized the garnishment on March 24, 2015. Mrs.
Tilford timely filed an appeal.


                                              II.

       We review garnishment orders for abuse of discretion. 1 The district
court’s interpretation of relevant statutory provisions are conclusions of law,
which we review de novo. 2 Finally, we review the lower court’s findings of fact
for clear error. 3


                                              III.

       Mrs. Tilford concedes that the United States can garnish her solely-
managed community property to pay restitution. 4 Indeed, the federal
government can legally attach her earnings, including retirement funds, for
purposes of satisfying her spouse’s tax liability. 5 However, Mrs. Tilford argues



       1 United States v. Elashi, 789 F.3d 547, 548 (5th Cir. 2015); see also United States v.
Clayton, 613 F.3d 592, 595 (5th Cir. 2010).
       2 Id.
       3 Roberts v. C.I.R., 860 F.2d 1235, 1236 (5th Cir. 1988).
       4 United States v. Loftis, 607 F.3d 173, 179 n.7 (5th Cir. 2010) (citing 18 U.S.C. §

3613(c)) (once restitution is ordered, all of a defendant’s property becomes subject to a lien in
favor of the United States in the same manner as tax liens).
       5 See Medaris v. United States, 884 F.2d 832, 833-34 (5th Cir. 1989).

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                                         No. 15-10352
that the “Innocent Spouse” provision of the Internal Revenue Code Section
66(c) provides her with an affirmative defense. 6
      The district court concluded that Mrs. Tilford does not qualify for relief
under § 66(c) for two reasons. First, it held that innocent spouse relief is only
available as an affirmative defense to the government’s efforts to assess a tax
deficiency, not when the government is enforcing a criminal judgment. Second,
the district court found that Mrs. Tilford “was aware that [her husband] earned
an income as an insurance broker,” disqualifying her under the knowledge
provision of § 66(c)(3).
      Mrs. Tilford contests the district court’s decision. She argues that
because the innocent spouse defense protects a non-liable spouse from payment
of a tax deficiency, she should also be protected from an order of criminal
restitution. We disagree. By its terms, § 66 defines how the Internal Revenue
Code treats community income for the collection of federal income taxes.
Within that provision, § 66(c) provides tax liability relief for innocent spouses.
Criminal restitution, even as a penalty for a failure to pay taxes, is not a tax.



      6    Section 66(c) reads as follows:
                 (c) Spouse relieved of liability in certain other cases
                 Under regulations prescribed by the Secretary, if—
                 (1) an individual does not file a joint return for any taxable year,
                 (2) such individual does not include in gross income for such taxable year an
          item of community income properly includible therein which, in accordance with the
          rules contained in section 879(a), would be treated as the income of the other spouse,
                 (3) the individual establishes that he or she did not know of, and had no reason
          to know of, such item of community income, and
                 (4) taking into account all facts and circumstances, it is inequitable to include
          such item of community income in such individual’s gross income,
                 then, for purposes of this title, such item of community income shall be
          included in the gross income of the other spouse (and not in the gross income of the
          individual). Under procedures prescribed by the Secretary, if, taking into account all
          the facts and circumstances, it is inequitable to hold the individual liable for any
          unpaid tax or any deficiency (or any portion of either) attributable to any item for
          which relief is not available under the preceding sentence, the Secretary may relieve
          such individual of such liability. 26 U.S.C. § 66(c).
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Mr. Tilford’s guilty plea makes that clear – he agreed to pay restitution “under
§ 18 U.S.C. 3663,” 7 which is a provision in the criminal code authorizing
restitution for any number of crimes, most having nothing to do with taxes. 8
And the provision specifically authorizing criminal restitution in tax cases like
Mr. Tilford’s instructs the IRS to “assess and collect the . . . restitution . . . for
failure to pay any tax . . . in the same manner as if such amount were such
tax.” 9 Finally, Mrs. Tilford has not offered any statutory footing for a wider
application of § 66(c), nor any cases applying the provision to criminal
restitution orders. The district court correctly concluded that Mrs. Tilford
cannot employ the innocent spouse defense.
       Mrs. Tilford further argues that the district court incorrectly balanced
the § 66(c) factors as applied to the facts of her case. 10 Since Mrs. Tilford cannot
invoke the innocent spouse defense, we do not reach the issues attending a
weighing of the relevant factors.
       The district court’s order denying Mrs. Tilford’s Motion to Quash Writs
of Garnishment is AFFIRMED.




       7 See Plea Agreement [30], United States v. Tilford, No. 4:12-CR-58-BJ (N.D. Tex. filed
Jul. 11, 2012).
       8 See 18 U.S.C. § 3663(a)(1)(A) (listing offenses including violations under the

Controlled Substances Act and transportation offenses, such as interfering with flight crew
members).
       9 26 U.S.C. § 6201(4)(A) (emphasis added).
       10 Mrs. Tilford cites to a 2013 regulation from the Treasury Department, which was

“intended to give greater weight to the presence of abuse” over other factors – including the
“knowledge” provision of § 66(c)(3). See 26 CFR § 601.105(3)(01); 26 CFR § 601.105(3)(07).
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