In re Estate of Brooks

JUSTICE HARRISON

delivered the opinion of the court:

The United States appeals from a judgment entered by the circuit court of Jackson County in a proceeding brought by the executrix of the estate of James Edward Brooks to obtain direction concerning competing claims of various creditors of the estate. The circuit court held, among other things, that the surviving spouse’s and children’s awards granted by sections 15 — 1 and 15 — 2 of the Illinois Probate Act of 1975 (Ill. Rev. Stat. 1983, ch. 110½, pars. 15 — 1 and 15 — 2) take priority over claims of the United States for unpaid taxes owed by the decedent and assessed before his death. For the reasons which follow, we affirm the judgment of the circuit court.

Section 6321 of the Internal Revenue Code of 1954 (26 U.S.C. sec. 6321 (1982)) provides that, if any person liable to pay Federal tax refuses to do so after demand, the amount owed “shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.” Section 18 — 10 of the Probate Act of 1975, however, sets forth a classification scheme in which debts due from an estate to the United States do not have first priority:

“All claims against the estate of a decedent are divided into classes in the manner following:
1st: Funeral expenses and expenses of administration.
2nd: The surviving spouse’s or child’s award.
3rd: Debts due the United States.
* * *
7th: All other claims.” (Ill. Rev. Stat. 1983, ch. 110½, par. 18-10.)

Section 18 — 13 of the Probate Act (Ill. Rev. Stat. 1983, ch. 110½, par. 18 — 13) directs the representative of the estate to pay claims against the estate in the order of their classification.

On appeal in this case, the United States contends that the trial court erred in not giving its claim for taxes priority over the statutory spouse’s and child’s awards. In Smith v. Commissioner of Internal Revenue (1931), 24 B.T.A. 807, 811, the Board of Tax Appeals had occasion to address the question presented here:

“The priority of Federal taxes given by statute, section 3466, R.S. (see Price v. United States, 269 U.S. 492) in any event, is over debts, not payments required by law to be made to a widow as her statutory allowance out of the estate of her deceased husband. Such statutory allowance is not a debt and the payment thereof therefore is not a payment of a debt. Under the Illinois law this takes priority over all debts except funeral expenses. See par. 75, ch. 3, Callaghan’s Illinois Statutes Annotated, vol. 1, p. 410. The priority of the United States on account of taxes extends to any assets or funds available for the payment of debts. United States v. Johnston, 5 Fed. (2d) 951. The widow’s allowance not being available for the payment of debts, we do not think the Government’s claim for taxes has priority over it.”

We find the reasoning of Smith to be persuasive, and adopt it here. We note that Smith has subsequently been cited with approval. (Schwartz v. Commissioner of Internal Revenue (8th Cir. 1977), 560 F.2d 311, 314-15 n.7.) We also note that, while the United States argues the existence of its lien in this court, the record reveals no attempt by the United States to enforce its rights under the asserted lien claims. (See 26 U.S.C. sec. 7403 (1982).) Under these circumstances, where the government has thus far elected to proceed as a creditor of the estate and not as a lienholder, we see no basis for distinguishing this case from Smith, and no need to decide whether, should the United States at some point attempt to enforce its purported lien, such lien would have priority over the awards at' issue here.

For the foregoing reasons, the judgment of the circuit court is affirmed.

Affirmed.

WELCH, J., concurs.