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UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT
________________
No. 91-1027
_________________
UNITED STATES OF AMERICA,
Plaintiff-Appellant-
Cross-Appellee,
VERSUS
JAMES NEAL BLAKEMAN,
As Executor of the Estate of
C. E. BLAKEMAN, Deceased,
ROBERT EARL BLAKEMAN
and KAREN A. WHALEY,
Defendants-Appellees-
Cross-Appellants
and Cross-Appellees,
RIDGLEA BANK, ET AL.,
Defendants-Appellees,
VERSUS
MAUDINE BLAKEMAN,
Defendant-Appellee-
Cross-Appellant.
____________________________________________________________
Appeals from the United States District Court
for the Northern District of Texas
___________________________________________________________
July 28, 1993
ON PETITION FOR REHEARING
(Opinion July 21, 5th Cir., 1992, ___ F.2d ___)
Before JOLLY, JONES, and EMILIO M. GARZA, Circuit Judges.
PER CURIAM:
IT IS ORDERED that the petition for rehearing filed in
the above entitled and numbered cause be and the same is

hereby GRANTED. We hereby WITHDRAW Parts II.C. and III. of
our original opinion, ___ F.2d ___ (5th Cir. 1992), and
substitute the following:
II
C
The district court, finding that Mrs. Blakeman's
homestead interest was the economic equivalent of a life
estate, used the Treasury tables set forth in Treasury
Regulation § 20.2031-10(f)15 to determine its value.16 The
district court measured the value of the estate as of the date
of the tax assessment and determined that the value of
Mrs. Blakeman's homestead estate (life estate) was 74.423
percent of the total value of the 100 acres. The district
court then held that the government's lien attached only to
the estate's remainder interest in the 100 acres and held that
the remainder interest was worth 25.577 percent of the value
of the homestead as of the date of the assessment.17 The
15
See 26 C.F.R. § 20.2031-10(f).
16
The court found that the parties agreed that "the value
of Mrs. Blakeman's homestead estate is the economic equivalent of
a life estate and that use of the tables set forth in Treas. Reg.
§20.2031-10(f) in determining the value of said estate is
appropriate." United States v. Blakeman, 750 F. Supp. 216, 222
(N.D. Tex. 1990) ("Memorandum Opinion").
17
The court so reasoned because "the general federal tax
lien described in 26 U.S.C. § 6321 and on which federal levy may be
had under 26 U.S.C. § 7403(a) attaches only to the interest of the
delinquent taxpayer in particular property and not to the entire
property." See Blakeman, 750 F. Supp. at 222 ("Memorandum
Opinion") (citing United States v. Rodgers, 461 U.S. 677, 690
(1983)). This amount represents 14.071 percent.
-2-

district court, however, found that "inequity would result if
Mrs. Blakeman were to . . . have the use of the homestead for
the ten years that have passed since date of assessment, as
she has had, and at the same time to receive sales proceeds
representing the value of the homestead life estate for that
same ten-year period," and concluded that Mrs. Blakeman's
interest in the 100 acres should be determined by the value of
Mrs. Blakeman's homestead interest as of the present date.
Using the Treasury tables, then, the district court found Mrs.
Blakeman's interest in the property to be 60.352 percent of
the value of the land as of judgment. The district court then
determined that the difference between the 74.423 percent
representing the value of Mrs. Blakeman's homestead estate at
date of assessment (June 17, 1980) and the 60.352 percent
(Mrs. Blakeman's interest at judgment) should be given to the
estate.18
The government argues that Mrs. Blakeman's interest in
the Randol Mill Property should be valued as of the
foreclosure date and contends that the district court erred in
holding that the government's tax lien was limited to the
estate's interest in the property on the lien's attachment
date. Mrs. Blakeman, on the other hand, argues that the
district court should have determined the interests of the
18
See Blakeman, 750 F. Supp. at 222 ("Memorandum
Opinion").
-3-

respective parties as of the date the lien arose. In the
alternative, Mrs. Blakeman argues that, if her homestead
interest is to be valued as of the foreclosure date, it should
be valued under the tables promulgated pursuant to 26 U.S.C.
§ 7520, and the district court erred in using the tables under
Treas. Reg. § 20.2031-10.19
Mrs. Blakeman contends that she is entitled to at least
74.423 percent of the gross proceeds realized from the sale of
the homestead property without any reduction to account for
the period she occupied the property. Mrs. Blakeman relies on
Harris v. United States, 764 F.2d 1126 (5th Cir. 1985),
contending that the government should be estopped from
asserting a position contrary to that taken in Harris. We
find Mrs. Blakeman's contention without merit.
It is well-settled that a federal tax lien reaches
property and interests in property owned by the taxpayer on
the date of the assessment, as well as property and interests
in property acquired by the taxpayer from that date until the
tax debt is satisfied. See Texas Commerce Bank--Fort Worth v.
United States, 896 F.2d 152, 161 (5th Cir. 1990) ("The lien
arises on the date the IRS assesses unpaid taxes, applies to
19
Federal district courts in tax foreclosure cases are
authorized to order a sale of the homestead property and distribute
the sale proceeds in accordance with the interests of the parties.
See 26 U.S.C. § 7403(c). Section 7403(c) does not, however,
provide a precise method of (1) valuing the interests of the
parties to the foreclosure and (2) distributing the sales proceeds
realized on the foreclosure sale. Id.
-4-

currently owned as well as after-acquired property, and
continues until the taxpayer satisfies the debt or the statute
of limitations runs."), citing 26 U.S.C. § 6322; Glass City
Bank v. United States, 326 U.S. 265, 267, 66 S. Ct. 108, 110,
90 L. Ed. 56 (1945); United States v. Cache Valley Bank, 866
F.2d 1242, 1244 (10th Cir. 1989); Prewitt v. United States,
792 F.2d 1353, 1355 (5th Cir. 1986); see also Rice Investment
Co. v. United States, 625 F.2d 565, 568 (5th Cir. 1980)
("After-acquired property . . . is reached by the lien.")
(citations omitted). Therefore, the federal tax lien reaches
the interests of C.E.'s estate as of the date of the
foreclosure sale.

Mrs. Blakeman's next argument is that, if her homestead
interest is to be valued as of the foreclosure date, her
interest should be valued according to the tables promulgated
pursuant to 26 U.S.C. § 7520.20 The government agrees that the
tables promulgated pursuant to 26 U.S.C. § 7520 are the proper
tables to determine Mrs. Blakeman's interest in the property,
but argues that, because Mrs. Blakeman failed to raise
properly the issue of the applicability of § 7520 in the
district court, she has waived her right to assert that the
district court should have used the tables promulgated
pursuant to 26 U.S.C. § 7520. We disagree.
20
Mrs. Blakeman contends that the district court erred
when it stated that she agreed that the tables under Treas. Reg. §
20.2031-10 should be used to determine the extent of her homestead
interest.
-5-

Mrs. Blakeman raised her argument concerning § 7520 in
her proposed findings of fact and conclusions of law, but she
did not raise it again at trial.21 We believe, in light of our
decision in Laney v. Comm'r of Internal Revenue, 674 F.2d 342
(5th Cir. 1982), and decisions of other courts of appeals,
that that was sufficient to preserve Mrs. Blakeman's argument
for appeal. In Laney the taxpayers urged an issue on appeal
which they had not pleaded before the tax court, and which the
tax court had not addressed. See id. at 351. The
Commissioner contended that the taxpayers had waived the
argument. See id. We held that the argument was not waived,
because the taxpayers had included the issue in their trial
21
Mrs. Blakeman's proposed findings and conclusions
stated:
3.
In 1988, congress enacted Section 7520, which is the
determining provision for valuing life estates and remainder
interests at this time. Section 7520 requires the life estate
and remainder to be determined
a.
Under the tables prescribed by the Secretary,
and
b.
By using an interest rate equal to 120% of the
Federal midterm rate in effect under Section
1274(d)(1) for the month in which the valuation
date falls.
If the date of measurement is the date of foreclosure, then the
Federal midterm rate for September 1990 is 8.53%. The second
element of the formula is 120% of the Federal midterm rate,
which is 10.28%. Table R(1) (located at [paragraph] 311AB of
CCH Standard Federal Tax Reporter) for a person age 62 (Maudine
Blakeman's current age) at 10.2% reflects a remainder factor of
.25532% [sic], and therefore, results in a life estate factor
of 74.468% of the gross sale price of the property sold at
foreclosure.
Record on Appeal, vol. 4, at 866-67.
-6-

memo before the tax court. See id. The D.C. Circuit reached
a similar result in Kapar v. Kuwait Airways Corp., 845 F.2d
1100 (D.C. Cir. 1988), where it held that an unpleaded issue
was preserved for appeal by inclusion in memoranda of law
submitted to the district court. See id. at 1103 n.7. In
Hellenic Lines, Ltd. v. United States, 512 F.2d 1196 (2d Cir.
1975), the Second Circuit held that an issue was preserved for
appeal because it was raised in proposed conclusions of law
and in a post-trial memorandum. See id. at 1205 n.15 Because
in those cases memoranda of law and proposed conclusions of
law were adequate to preserve issues for appeal, we conclude
that Mrs. Blakeman's proposed findings and conclusions were
adequate to preserve her argument under § 7520.
The holding in United States v. Indiana Bonding & Sur.
Co., 625 F.2d 26 (5th Cir. 1980), appears at first blush to
support a contrary conclusion. In Indiana Bonding we held
that the defendant, Indiana Bonding and Surety Company
("Indiana"), had waived its statute-of-limitations defense,
because "[e]ven though this issue was listed as one of
[Indiana's] contentions in the pretrial order . . . Indiana's
failure to present evidence in support of the defense before
the district court preclude[d] our review of it." See Indiana
Bonding, 625 F.2d at 29. However, Indiana Bonding is
distinguishable. Because the issue waived there))whether a
cause
of
action
was
barred
by
the
statute
of
limitations))required the presentation of evidence, we
-7-

recognized Indiana's failure to present evidence as a waiver
of the issue.22 See id. ("Indiana's failure to present
evidence in support of the defense before the district court
precludes our review of it here."). In this case, by
contrast, there was no need for Mrs. Blakeman to offer
evidence regarding the applicability of § 7520, because the
applicability of that section followed automatically from the
date of valuation of Mrs. Blakeman's homestead interest.23
Because it was unnecessary for Mrs. Blakeman to present
evidence, we do not recognize her failure to do so as a waiver
of her argument. Therefore, the logic of Indiana Bonding
lacks force here, and we believe that Laney, Kapar, and
Hellenic Lines offer better guidance for the resolution of
this dispute.
Because Mrs. Blakeman did not waive her argument under
§ 7520, and because the government concedes that § 7520 is
applicable, we reverse and remand so that Mrs. Blakeman's
homestead interest may be valued according to the tables
promulgated pursuant to 26 U.S.C. § 7520.
22
We do not mean to suggest that, in every case where the
admission of evidence is appropriate to the resolution of a
disputed issue, failure to elicit testimony leads to waiver of the
issue. That question is not before us, and we express no opinion
on the subject.
23
Section 7520 applies if the valuation date occurs on or
after May 1, 1989. The district court determined that the
valuation date was the date of foreclosure, and ordered a
foreclosure sale within 120 days of October 30, 1990. Therefore,
the valuation date occurred after May 1, 1989, and it automatically
followed that § 7520 applied.
-8-

III
For the foregoing reasons, we AFFIRM in part and REVERSE
and REMAND in part for the district court to determine the
government's interest in the Randol Mill Property as of the
date of the foreclosure sale, in accordance with the tables
set forth in the Treasury Regulations, and for the district
court to determine the value of Mrs. Blakeman's homestead
interest according to the tables promulgated pursuant to 26
U.S.C. § 7520.
-9-