SEC. 6321 provides that if any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) 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. McMahan case involves the filing of an IRS tax lien and foreclosure of the real estate subject to the tax lien.

US-DIST-CT, 2009-1 USTC ¶50,128, M. McMahan, January 7, 2009Discussion
A. Initial IssuesConsistent with her prior filings in this matter, Margarette has lodged several baseless complaints concerning the Government's attempts to establish and foreclose upon the federal tax liens underlying this action, each of which the Court will address in turn. Despite Margarette's contentions to the contrary, it is well settled that under the Federal Rules of Evidence, a Form 4340 is valid evidence of a taxpayer's assessed liabilities, and courts presume the correctness of IRS determinations of taxes owed. Perez v. United States , 312 F.3d 191, 195 (5th Cir. 2002); Stallard v. United States , 12 F.3d 489, 493 (5th Cir. 1994); Hughes v. United States , 953 F.2d 531, 535, 539-40 (5th Cir. 1992); Cummings v. Commissioner , 410 F.2d 675, 679 (5th Cir. 1969); FED. R. EVID. 803(8), 902. Because a Form 4340 establishes a presumptively correct tax assessment and constitutes a prima facie case of liability on the part of the taxpayer, Hughes , 953 F.2d at 535, 539-40, a taxpayer bears the burden of showing the assessments were arbitrary or erroneous. Bar L Ranch, Inc. v. Phinney , 426 F.2d 995, 998-99 (5th Cir. 1970). Margarette has completely failed to carry her burden. She has brought forth no competent evidence rebutting the propriety of the Government's tax assessments and thus they are accepted as correct.Similarly, the fact that the Government's Form 4340 shows a "prompt assessment" --a "manually processed assessment of a secured return when collection appears to be at risk and the intention is to proceed with collection action immediately following the period for Notice and Demand," INTERNAL REVENUE MANUAL § 5.1 .4.12 (2008) --does not invalidate the assessment. The Government's prompt assessment was made because of valid concerns regarding collection (the McMahans' blatant and continued attempts at unlawfully avoiding tax payment) and such efforts in no way prejudiced Margarette or the Estate. See Dalin v. United States , 62 Fed. Cl. 589, 601-02 (Fed. Cl. 2004). Moreover, and despite Margarette's assertions, Form 4340's do not record statutory accruals of interest or other additions until they are actually assessed. Form 4340's merely record assessments and payments and are only required to provide the taxpayer's identity, character of the liability assessed, taxable period and date, and amount of the assessment. TREAS. REG. § 301.6203-1 ; United States v. Chila , 871 F.2d 1015, 1018 (11th Cir. 1989). The Government's summary judgment evidence has met these requirements and its assessments are proper.Margarette also claims that the tax assessments were made outside of the applicable three year statute of limitations period mandated by section 1605 of the Internal Revenue Code. Her arguments are patently without merit. With respect to the tax year 1993, the McMahans filed their tax return on April 15, 1994. While the three year limitations period was initially set to expire on April 15, 1997, on January 29, 1997, the McMahans executed a Form 872, Consent to Extend the Time to Assess Tax, thereby extending by one year the time in which the Government could make a timely assessment. 16 On December 11, 1997, the McMahans executed another Form 872, extending the Government's statutory time period to September 12, 1998. 17 Accordingly, the Government's May 26, 1998 assessment was well within the allowed statutory period. Concerning the tax year 1994, the McMahans filed their tax return on April 15, 1995 only to later execute a Form 872 on December 11, 1997, thereby extending the date for assessment to September 12, 1998. 18 The Government's May 26, 1998 assessment was thus timely. Finally, regarding the tax year 1995, the McMahans filed their tax return on April 15, 1996, thereby initiating a three year assessment period that would expire on April 15, 1999. The Government's 1998 assessment was obviously made within the applicable period.Margarette also contends that the Government failed to deliver to her the appropriate notices of deficiency and related demands. Section 6303(a) of the Internal Revenue Code provides that: "The secretary or his delegate shall ... within 60 days after the making of an assessment of a tax pursuant to Section 6203 , give notice to each person liable for the unpaid tax, stating the amount and demanding payment thereof...." 26 U.S.C. § 6303(a) . However, section 6303(a) is only "designed to protect taxpayers from the summary administrative powers of the IRS. Such protection is unnecessary when the government initiates a civil proceeding because the complaint gives the taxpayer notice that the government is proceeding against his property." United States v. McCallum , 970 F.2d 66, 69 (5th Cir. 1992). A failure to send the appropriate notices and demands, even if presumed, does not prevent the Government from brining a civil action like the one before the Court. Id.Moreover, section 6212 does not require the IRS to prove that a taxpayer received the notices, only that they were mailed to his "last known address." See Jones v. United States , 889 F.2d 1448, 1450 (5th Cir. 1989). The Government's Form 4340's establish that the appropriate notices were sent to the McMahans, which serves as presumptive proof that the notices were properly mailed. Don Johnson Motors, Inc. v. United States , 532 F. Supp. 2d 844, 859 (S.D. Tex. 2007) (citing Geiselman v. United States , 961 F.2d 1, 6 (1st Cir. 1991)). Margarette has proffered nothing to overcome this presumption. To the contrary, Margarette filed an appeal concerning the Government's nominee lien against the Trust, and after a review of the matter, IRS Appeals issued a closing letter dated May 8, 2007 deciding that the filing of the lien was proper. 19 This further supports the Court's finding that the Government sent the proper notices and demands and that they were duly received by the McMahans.Finally, Margarette argues that she was not presented with the opportunity to petition the U.S. Tax Court as mandated by section 6213(a) , which provides that within 90 days after a notice of deficiency is mailed, the taxpayer may file for a redetermination of the deficiency. However, given that the Court has found that the Government sent --and the McMahans received --the appropriate notices, Margarette had every right and opportunity to petition the Tax Court and may not now complain about failing to do so.B. An Automatic Lien Has Arisen Over the Defendants' AssetsTitle 26, United States Code, Section 6321 provides that "[i]f any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) 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." 26 U.S.C. § 6321 . This lien automatically arises and "continues until the [tax] obligation is satisfied." United States v. Jefferson-Pilot Life Ins. Co. , 49 F.3d 1020, 1021 (4th Cir. 1995). However, a lien under section 6321 "is merely a security interest and does not involve immediate seizure" of the property and the Government must take further steps to recover on the tax deficiency. See In re Sills , 82 F.3d 111, 113-114 (5th Cir. 1996). Based on the above, it is clear that an automatic lien has arisen over the McMahans property as to over $321,000 in tax liability owed by the Defendants. In order to collect upon its lien, the Government must be able to reach and foreclose on the real property made the basis of this action.C. The Trust is a Sham, and Even it Were Valid, Its Nature as a Revocable Trust Makes it One to Which the Government's Federal Tax Lien Can AttachIt is clear that trusts devoid of economic substance are considered "sham trusts" and are disregarded for federal tax purposes. Courts have looked to various factors when determining whether a trust is merely a sham, such as 1) whether the grantors themselves serve as trustees with powers so broad as to effectively allow them to allocate the entirety of the trust's assets and/or income to themselves; 2) whether the taxpayers have retained full use of the assets placed in trust; 3) whether the trust's assets have been used to pay personal expenses of the taxpayers; and 4) whether trust's assets have been distributed to the putative beneficiaries of the trust. Itz v. United States , Civ. No. A-83-CA-437, 1985 WL 1310, at *4 (W.D. Tex. Mar. 29, 1985). Here, each factor weighs in favor of finding that the Trust is merely a sham trust. The McMahans, as trustees, have nearly limitless powers which allow them to entirely cannibalize the Trust's assets; Margarette has retained full use of the Trust's assets; Margarette's personal expenses and those of her residence are paid out of the Trust; and there is no evidence that any trust assets have been distributed to the supposed beneficiaries. Additionally, the Trust failed to provide the McMahans any consideration for the Fort Street or Levi Miller Properties. Margarette has presented nothing to refute these findings and the Court thus concludes that the Trust utterly lacks economic reality and should be disregarded for tax purposes. 20 Even assuming, arguendo , that the Trust is not a sham (or merely a nominee), the trust is clearly revocable in nature allowing the Government to reach its assets to satisfy its federal tax lien. It is clear and long-established that "a settlor cannot shield his assets by placing them in a revocable trust for his own benefit." United States v. Estabrook , 78 F. Supp. 2d 558, 560-61(N.D. Tex. 1999) (citing Matter of Brooks , 844 F.2d 258, 261 (5th Cir. 1988); Matter of Johnson , 724 F.2d 1138, 1140-41 (5th Cir. 1984); and In re Witlin , 640 F.2d 661, 663 (5th Cir. 1981)). "Where a person creates a trust for his own benefit ... his ... creditors can reach the maximum amount which the trustee under the terms of the trust could pay to him or apply for his benefit." Id. (citations and quotations omitted). As in Estabrook , the McMahans created a revocable trust of which they were grantors, trustees, and lifetime beneficiaries with overarching control and authority as to the allocation and use of its assets. As Margarette herself aptly observed, "income tax-wise S&M Trust No.1 being a Revocable Living Trust was the same as Margarette S. McMahan, individually, for income tax purposes." 21 Presented with such facts, the Government clearly has the right and authority to reach the Trust's assets to satisfy its federal tax lien.D. Other Persons or Entities Who Purport to Have an Interest in the Real Properties at Issue1. Timothy McMahanIn an Order dated May 13, 2008, the Court denied Margarette's attempt at substituting, as a real party in interest, her son Timothy. Dkt. No. 19. To the extent Margarette and the Estate have maintained, could be understood as continuing to maintain, or may later maintain that Timothy has any interest in the real property underlying this action, such contentions are wholly unavailing. The Fort Street Property was purchased by James and Margarette on March 30, 1962. 22 The Levi Miller Property was purchased by James on November 29, 1985. 23 Both properties were acquired while the McMahans were married, Margarette has not presented the Court with any evidence that either property was maintained as separate, and thus, they are deemed community property. See TEX. FAM. CODE ANN. §§ 3.002 , 3.003. Because James died intestate, no probate proceeding was opened, and the surviving children were children of both parents, the community property passed directly to Margarette as surviving spouse. TEX. PROB. CODE ANN. § 45 . Accordingly, Timothy has no interest in the real property made subject of this dispute.2. Country Manor HoldingsAs noted, Country Manor Holdings is purported to have loaned the Trust $451,000 in exchange for a Deed of Trust conveying an interest in the Fort Street and Levi Miller Properties. However, Margarette has admitted that she never received the loan, no mortgage payments have been made to Country Manor Holdings, and it is clear to the Court that Country Manor Holdings is merely a fictional duality of John Baptist Kotmair and the Save-A-Patriot Fellowship. As such, it has no interest in Margarette's properties. Moreover, even assuming the Court were to recognize or give credence to Country Manor Holdings and its farcical "loan," the Deed of Trust --filed in Goliad County of October 10, 2007 --is secondary and subordinate to the Government's federal tax liens, which were filed against James and Margarette in 2000 and 2003 and against the Trust on March 15, 2007. This transparently disingenuous effort at avoiding tax liability is characteristic of tax-protestor posture and will neither be given credence nor addressed further.E. The Government has the Authority to Immediately Foreclose on the Relevant PropertiesAs stated above, Margarette is the sole owner of the Fort Street and Levi Miller Properties, against which a federal tax lien has arisen based on her failure to pay the Government's valid tax assessments in full after legally sufficient notice and demand. The Government has perfected its liens by filing the appropriate notices in both the real and personal property records of Goliad County. Title 26, United States Code, Section 7403(a) grants the Government the authority to "subject any property, of whatever nature, of the delinquent, or in which he has any right, title, or interest, to the payment of such tax or liability," even if the property can be considered homestead pursuant to Texas law. 26 U.S.C. § 7403(a) (emphasis added); United States v. Rodgers , 461 U.S. 677, 690-94 (1983). Margarette has failed to set forth convincing rationale or support opposing immediate foreclosure. Accordingly, the Court concludes that the Government is entitled to foreclose on its federal tax lien, sell the Fort Street and Levi Miller Properties in accordance with 28 U.S.C. § 2001 , et seq. , and apply the proceeds from the sale to Margarette and the Estate's federal tax debt. See 26 U.S.C. § 7403(c) .
Tax liens were effective to reach the following property.The taxpayer-beneficiary's interest in a spendthrift trust.Dallas Natl. Bank, CA-5, 46-1 USTC ¶9177, 152 F2d 582, 47-2 USTC ¶9405, 164 F2d 489, 48-1 USTC ¶9242, 167 F2d 468.LaSalle Natl. Bank (V.Schnadig-Bensinger) DC Ill., 86-2 USTC ¶9537, 636 FSupp 874.Riggs Natl. Bank, DC D.C., 86-1 USTC ¶9398, 636 FSupp 172.Income from spendthrift trust.C.O. Canfield, DC Calif., 39-2 USTC ¶9641.Mercantile Trust Co., DC Md., 45-1 USTC ¶9124, 58 FSupp 701.L.B. Howard, Jr., Tenn. SCt, 78-1 USTC ¶9396, 566 SW2d 521.J.D. Orr, CA-5, 99-2 USTC ¶50,668, 180 F3d 656. Cert. denied, 5/1/2000.An unliquidated "reasonable sum" which the taxpayer could claim from a trust for his maintenance and care.S.D. Magavern, CA-2, 77-1 USTC ¶9249, 550 F2d 797. Cert. denied, 434 US 826.Vested interest in a trust subject to complete defeasance.United Banks of Denver, CA-10, 76-2 USTC ¶9691, 542 F2d 819.A trust that arose in favor of the taxpayer when his daughter-in-law purchased property from him and then instituted a suit to clear title.L. Decker, DC Utah, 62-1 USTC ¶9455.Life estate in a trust, notwithstanding a forfeiture clause that provided that the taxpayer's interest would terminate if it became payable to the federal government.W.E. Taylor, DC Calif., 66-2 USTC ¶9522, 254 FSupp 752.Trust assets which were subject to the taxpayer's power of appointment.W.L. Ritter, CA-5, 77-2 USTC ¶9550, 558 F2d 1165.Funds deposited in a trust account pursuant to an agreement between a bank, a contractor, and the contractor's surety.Pan American Bank of Miami, DC Fla., 64-1 USTC ¶9271.Escrow account created on taxpayer's behalf.I. Johansson, DC Fla., 66-1 USTC ¶9334.Beneficial interest in an Illinois land trust.H. Lewis, DC Ill., 67-2 USTC ¶9693, 272 FSupp 993.Southwest Federal Savings & Loan Asso. of Chicago, Ill. Appellate Ct., 60-1 USTC ¶9237.Undivided interest in trust estate.Glasser, DC Ill., 57-2 USTC ¶9847.Assets that the taxpayers transferred to a family trust, over which they retained control.Allen Family Trust, DC Kan., 82-1 USTC ¶9322.Don Gastineau Equity Trust, DC Calif., 88-1 USTC ¶9314, 687 FSupp 1422.Property acquired by the taxpayer in the name of a straw party.Miller Bros. Construction Co., CA-10, 74-2 USTC ¶9817, 505 F2d 1031.Code Products Corp., DC Pa., 63-1 USTC ¶9367, 216 FSupp 281.An automobile transferred to trustees by a bankrupt.W.C. Bates, BC-DC Ore., 88-1 USTC ¶9124, 81 BR 63.Property transferred from a husband and wife to a trust in exchange for beneficial interests which were transferred and retransferred between the spouses and their children.L.A. Newgard, Jr., DC N.D., 89-2 USTC ¶9395. Aff'd, CA-8 (unpublished opinion 6/6/90).Community property that was transferred to a trust before tax liens arose but where the taxpayers were the settlors, trustees and beneficial owners of the trust with the right to withdraw its assets or dissolve the trust at any time.H. Stolle, DC Calif., 2000-1 USTC ¶50,329.Levies served upon the trust assets of a trust established for the benefit of the taxpayer were enjoined. The testatrix's will, in which a portion of her estate was left in trust for the benefit of the taxpayer, her son, required payment of trust income to the taxpayer; however, with respect to the trust principal, it merely gave the trustee the power to distribute assets as she in her discretion deemed advisable.N. Pulizzotto, DC N.J., 90-2 USTC ¶50,421.A taxpayer's renunciation, under state (Nebraska) law, of his interest in a trust did not extinguish the federal tax lien attached to the interest. The state court's acceptance of the taxpayer's renunciation of the trust specifically left open the question of existing tax liens. Even if the state court had not made the exception for tax liens, the transfer of property after the attachment of a tax lien does not affect the lien, which attaches to the property itself.F.S. Solheim, CA-8, 92-1 USTC ¶50,043, 953 F2d 379.A federal tax lien and subsequent levy did not attach to the withheld discretionary disbursements of a spendthrift trust to which the debtor/beneficiary did not have a property interest under state law (Texas). The spendthrift clause protected trust property from attachment of the IRS lien since the taxpayer had merely an expectancy of trust disbursements.H.C. Wilson, BC-DC Tex., 92-2 USTC ¶50,333.An IRS lien could only attach to the taxpayer-beneficiary's property interest in trust income, not to the principal of the trust. The trust was maintained such that a support trust was created as to the income and a discretionary trust as to the principal. Under state (Maryland) law, the taxpayer had only a property interest in escrowed and future trust income because he had no control over distribution of the principal. Accordingly, the IRS's lien could attach solely to that portion of the trust in which the taxpayer had an interest.First of America Trust Co., DC Ill., 93-2 USTC ¶50,507.An IRS tax lien did not attach to the undistributed principal and income of three trusts established by the beneficiary-taxpayer's father. However, following its perfection, the lien did attach to all amounts distributed, or to be distributed, by the trusts to the beneficiary. Although an independent trustee had absolute discretion as to the distribution of principal and income, the beneficiary had acquired, and would in the future acquire, a property right each time the trustee decided to make a distribution to him and determined the amount of that distribution. The IRS lien also attached to the income of a fourth trust, which the trustee was required to pay to the beneficiary at reasonable intervals. As in the case of the other trusts, the lien would also attach to any principal of the fourth trust that the trustee distributed to the beneficiary.S. Cohn, DC Conn., 94-1 USTC ¶50,262, 855 FSupp 572.Joint bank accounts were owned by a decedent's other son, who was the trustee of his mother's purported testamentary trust and also the appointed executor of both her estate and his deceased father's estate.G.L. Walker, DC Ky., 92-1 USTC ¶50,065.A federal tax lien attached to real property which was held in a land trust for the benefit of individuals who were delinquent in paying their taxes. Although, technically, legal title rested in the trustee, the beneficiaries of the land trust were the equitable owners of the property.M.J. Stamps, DC Ill., 93-1 USTC ¶50,280.Where (1) an individual and trust beneficiaries in an action by the federal government to foreclose tax liens offered no evidence to disprove the government's assertion that assets held in a trust and by a receiver were owned by the individual and (2) the individual had admitted ownership of those assets in prior proceedings in connection with his filing of a petition in bankruptcy, the government was entitled to summary judgment.W. Werner, DC N.Y., 94-2 USTC ¶50,345, 857 FSupp 286.Issues of fact regarding the intent of a married couple in transferring real estate subject to a federal tax lien to trusts for the benefit of their children precluded a summary judgment that the trust held the couple's property merely as nominees or alter egos.J.G. Stepard, DC Ariz., 95-1 USTC ¶50,274. Aff'd on another issue, CA-9, 95-2 USTC ¶50,413.The district court properly ordered enforcement of federal tax liens on married taxpayers' property that they had transferred to trusts that were their alter egos. To the extent the taxpayers attempted to challenge the finding, they lacked standing due to their contention that the property belonged to the trusts. Conversely, if they contended that they owned the property, their argument that they transferred ownership to the trusts failed.International Tax Strategies, CA-9 (unpublished opinion), 99-2 USTC ¶50,820, aff'g an unreported District Court decision. Cert. denied, 5/30/2000.An IRS lien attached to proceeds (notes and mortgages) from the sale of several nursing homes held by two trusts for which the taxpayer was trustee. Based on retained powers and rights with respect to the trusts, the trust property belonged to the taxpayer in her individual capacity. However, the lien only attached to the taxpayer's present right to receive annual distributions from net earnings in a third trust over which the taxpayer had limited powers as trustee.P.F. Markham, CA-1, 96-1 USTC ¶50,118.On remand, the district court determined that the lien attached to the taxpayer's 25 percent proportional interest in net earnings from the trust. Further, under state (Massachusetts) law, a mortgage payment made to the trust represented a payment of mortgage interest, not principal, and, therefore, was income to the trust and subject to the lien.P.F. Markham, DC Mass., 96-2 USTC ¶50,625.Under state (Illinois) law, a trust was not the alter ego of an individual for purposes of subjecting his interest in the trust's property, which consisted of the residence he owned in joint tenancy with his wife, to federal tax liens. Although the husband continued to use the property as his residence and place of business, the trust's beneficiaries, who were his children, also resided at the property. It was not shown that the couple exercised complete dominion and control over the property.R.E. Hatfield, DC Ill., 96-2 USTC ¶50,342.A federal tax lien against a delinquent taxpayer's property that was properly assessed, noticed, and recorded had priority over a trust's claim to wages owed by a corporation for services performed by the taxpayer. Pursuant to an "Independent Contractor Agreement" entered into between the trust and the corporation, the taxpayer worked as a welder for the corporation, but his wages were paid to the trust. The taxpayer formed the trust after his tax liabilities were assessed, he exercised control over the funds in the trust, and the evidence indicated that the wages were channeled through the trust in anticipation of the tax lien. Thus, under state (Idaho) law, the trust qualified as the taxpayer's alter ego or nominee, and amounts payable to the trust constituted property of the taxpayer that was subject to the tax lien.Diversified Metal Products, Inc., DC Ida., 96-2 USTC ¶50,437.A creditor failed to present admissible evidence that a beneficiary of a land trust did not have an interest in the real property res of the trust. The beneficiary, as well as the IRS, stated that the beneficiary was the record owner of the real property at the time the IRS assessed its tax liens, which was prior to the transfer of the property to the land trust.V.H. McAnulty, DC Ill., 96-2 USTC ¶50,484. Motion for reconsideration granted on another issue, 96-2 USTC ¶50,485.An IRS tax lien against real property owned by delinquent taxpayers, which was recorded after the realty was sold to third parties, had priority over the purchasers' equitable lien that arose following a state (Florida) court-ordered rescission of the sale. The property was not part of a constructive trust that arose before the tax lien became choate; since the purchasers sought rescission of the deed, any constructive trust would encompass only the money paid for the property, and not the property itself.J.F. Wasenius, CA-11 (unpublished opinion), 97-1 USTC ¶50,433.The IRS was entitled to foreclose on residential property that was held in a married couple's nominee or alter ego trust. The nominee or alter ego theory applied because the creation of the trust did not coincide with economic realty and the trust was, in effect, a sham. The husband admitted that the trust was set up as a shell for the purpose of keeping his property at arm's length from potential creditors, including the IRS, and the undisputed facts established that he maintained active and substantial control over the trust. Since the trust was the nominee or alter ego of the couple, the timing of its creation was irrelevant.G.J. Landsberger, DC Ariz., 97-2 USTC ¶50,822. Aff'd, CA-9 (unpublished opinion), 99-1 USTC ¶50,318.Married taxpayers' contentions that assessments were based upon an erroneous determination concerning trust income were rejected. The trust was invalid under state (Oregon) law because it had no identifiable beneficiaries. A deed by which the taxpayers purported to convey real property to the trust was void as a sham transfer because it failed to identify a valid grantee. Therefore, title remained with the taxpayers.H.E. Wilfley, DC Ore., 97-2 USTC ¶50,825.The IRS was entitled to funds assigned to a trust that was created by an insurance agent to hold both his commissions and other agents' commissions that were assigned to him. The tax lien against the taxpayer and one of the other agents extended to the commissions paid on their behalf and those commissions assigned to the taxpayer by the remaining agents. Further, since the commissions were earned and paid after the tax lien became effective and since the trust's interest in the commissions did not become choate until they were paid, the tax lien had priority over the trust's interest.American Trust, DC Ohio, 97-2 USTC ¶50,759. Aff'd on another issue, CA-6, 98-1 USTC ¶50,369.Summary judgment that a trust was the alter ego of married taxpayers was denied. Genuine disputes existed as to whether the trust was established before or after the IRS began auditing the taxpayers, whether the taxpayers treated the trust property as their own and whether the taxpayers personally benefited from a loan made to the trust. There was also evidence that the trust income was distributed to beneficiaries in accordance with the trust agreement, that the trust filed its own tax returns and that the beneficiaries reported their trust income on their personal tax returns. Finally, material issues existed as to the core issues of the case, including the amount of taxes owed by the taxpayers and whether the taxpayers had received notice and demand from the IRS.J.R. Dean, DC Mo., 97-2 USTC ¶50,941.The IRS could not rely on an alter ego theory to levy the assets of a trust for the tax liability of its beneficiary-trustee. There was no unity of interest between the taxpayer and the trust, and a finding of alter ego liability was not necessary to avoid an inequitable result. The taxpayer's only trust interests were an income interest and an independently exercised discretionary spendthrift interest. Transfer of title to the trust's assets required the signature of a second trustee or the approval of a state court. Accordingly, the taxpayer had no direct interest in the trust's assets on which the IRS could levy. Moreover, the alter ego theory created an inequity as to the trust's other beneficiaries, particularly when the IRS could still file a lien against the taxpayer's discretionary interest and bring an action under Code Sec. 7403 to enforce it.S. Cohen, DC Calif., 98-2 USTC ¶50,769. Aff'd on another issue, CA-9 (unpublished opinion), 2000-1 USTC ¶50,297.The IRS was entitled to levy against a residence held by married debtors as trustees for their son in order to satisfy their tax liabilities. Although under state (Pennsylvania) law, title to the residence may have vested in the son when his parents created the trust, the parents' subsequent behavior indicated that they were the equitable owners of the house, and the trust held the property merely as their nominee. Further, while the trust was not created merely to avoid the parents' tax liabilities, it was created to safeguard the residence from future creditors. Also, the debtors paid the mortgage and related expenses and claimed federal tax deductions as if they owned the home. Finally, it was not inequitable to allow the liens to attach to the property.E.T. Richards, Jr., DC Pa., 99-1 USTC ¶50,317, 231 BR 571.Summary judgment was granted to the IRS allowing an IRS tax lien to attach to the taxpayer-beneficiary's interest in a valid trust. Although the taxpayer agreed to transfer his interest in the trust to his wife pursuant to a separation agreement prior to the filing of the tax lien, there was no evidence of any writing extinguishing the taxpayer's interest in the trust. Moreover, the IRS's tax lien was valid because the trustees' transfer of the property to the taxpayer's wife took place after the filing of the tax lien, thus, the purported transfer was a nullity.M. Murray, CA-1, 2000-2 USTC ¶50,571.A debtor's assignment of his interest as a naked owner beneficiary in an usufructuary trust as a security interest for real estate venture loans was a valid assignment that was perfected prior to filing of IRS liens. The trust instrument did not address the alienation or encumbrance rights of a naked owner beneficiary; therefore, under state (Louisiana) law the debtor was not prevented from assigning his interest in the trust.T.J. David, DC La., 2000-1 USTC ¶50,238, 83 FSupp2d 736.The government was entitled to foreclose its tax liens on real property that a taxpayer transferred to a nominee trust. The trust filed no income tax returns and failed to observe trust formalities such as meetings or trustees. Moreover, the trust beneficiaries were the taxpayer's children, who had little knowledge as to the existence of the property or the operations of the trust.J.W. Marsh, DC Hawaii, 2000-2 USTC ¶50,726, 114 FSupp2d 1036.Real property held in trust for the benefit of the taxpayer and his former spouse was subject to federal tax liens that attached to the property before the taxpayer transferred his interest as part of a divorce decree.A. Bruno, DC Ill., 2000-2 USTC ¶50,831.The IRS properly levied against property held by married taxpayers' alter ego trust over which the couple retained active and substantial control. They continued to treat property transferred to the trust as if it still belonged to them and the trust paid minimial or no consideration for transfer of the property title.R.G. Powell, DC Ariz., 2001-1 USTC ¶50,305. Aff'd, CA-9 (unpublished opinion), 2002-1 USTC ¶50,254.The IRS properly levied against property held by the taxpayers' alter ego trust, over which they retained active and substantial control. The taxpayers formed the trusts to hold and manage their property as a tax evasion device.J.M. Boyce, Jr., DC Calif., 2001-1 USTC ¶50,368.State (Tennessee) law restraints on alienation of a debtor's beneficial interest in a qualified retirement trust did not prevent an IRS tax lien from attaching to the beneficial interest. The Tennessee trust provisions did not affect the status of the beneficial interest as property or rights to which a tax lien could attach. The lien attached to both alienable and inalienable property. Accordingly, the state's restrictions on alienation were not enforceable under nonbankruptcy law, rendering the IRS's claim against the pension rights of the trust valid.J.L. Berry, BC-DC Tenn., 2001-1 USTC ¶50,466.A delinquent taxpayer's interest in a testamentary trust of which he was a co-trustee and the sole beneficiary constituted a property right despite the fact that it had no permanently fixed dollar value. Thus, the government was entitled to foreclose a federal tax lien against his trust interest in order to collect his outstanding personal income tax obligations. Although under state (Colorado) law, a beneficiary of a discretionary trust has a mere expectancy rather than a property interest in that trust, the testamentary trust in the present case was distinguishable from a discretionary trust. For purposes of foreclosing the lien, the taxpayer was deemed to hold a 100% interest in the trust assets.J. Delano, DC Colo., 2002-1 USTC ¶50,229, 182 FSupp2d 1020.On reconsideration of J. Delano (DC Colo., 2002-1 USTC ¶50,229), a co-trustee of a trust was found to be the sole beneficiary of the trust during his lifetime. Further, the beneficiary, as the trustee, had the power to terminate the trust and distribute the trust assets to himself. Therefore, the remainder beneficiaries merely had an expectancy interest in the trust assets and the prior determination that the co-trustee was, in fact, the only beneficiary for purposes of determining whether a tax lien could attach to his interests in the trust assets was unaffected.J. Delano, DC Colo., 2002-1 USTC ¶50,261.The government's motion for summary judgment on its contention that a trust was the alter ego/nominee of an individual was denied as it failed to present sufficient evidence to support such a claim. Genuine issues of material fact existed as to whether the taxpayer received consideration for the transfer to the trust, or that he continued to exercise dominion and control over the property after the transfer.D. Billheimer, DC Ohio, 2002-1 USTC ¶50,424.See also, ¶38,136.56.Co-trustees who held an interest in corporate assets that were transferred to several trusts were only nominees of the corporation. They were not permitted to interfere with the foreclosure or judicial sale of the real property because the trusts were sham trusts and alter egos of the corporation. The corporation's officers had created the trusts for the purpose of defrauding the United States by impeding the collection of income taxes and Federal Insurance Contribution Act (FICA) taxes. Therefore, the transfer of the real property to the sham trusts was a fraudulent conveyance and the property was subject to federal tax liens and foreclosure.Mathis Implement, Inc., DC S.D., 2006-1 USTC ¶50,279.A federal tax lien attached to all property owned by an officer of a corporation as the result of his failure to pay over withholding taxes following assessment. The tax lien also attached to property held in a trust since he had effective control over the trust and true beneficial ownership of the property. The lien continued to attach to the property after record title was transferred to the individual's son, who held title to the property as his father's nominee.R.G. Novelli, DC Calif., 2006-1 USTC ¶50,283.The beneficiary of two offshore trusts was ordered to repatriate trust assets to satisfy the tax liabilities of the beneficiary and her deceased husband who had also been a beneficiary of the trusts. As the surviving beneficiary, the widow had actual control of the trusts' corpus so that the monies funding the trust were really her assets; thus, they were subject to a federal tax lien.R. Grant, DC Fla., 2006-2 USTC ¶50,553.The government could foreclose on a parcel of undeveloped land held by sham entities created by a married couple to avoid payment of their income taxes. The entities, which included a trust and a religious mission, were mere nominees or alter egos of the couple. They were the sole trustees of the trust and its funds were used to pay their personal expenses. Moreover, the amount of income paid out from the trust to the couple was the exact amount of the deductions and exemptions shown on their tax returns for the tax years at issue. The trust and the mission had no legitimate purpose and the couple could not use them as a shield against paying the income taxes they owed to the government.J.G. Bahrs, DC Fla., 2006-2 USTC ¶50,568. Aff'd, per curiam, on another issue, CA-11 (unpublished opinion), 2007-2 USTC ¶50,557.The government could not seize assets of an irrevocable trust created by an individual in order to help satisfy the individual's tax liability. Although the individual had mixed motives when establishing and funding the trust, the government did not establish that he was insolvent at the time. Thus, it failed to meet its burden of proving actual or constructive fraud under state (New York) law. Moreover, the trust was not the individual's alter ego. It was set up primarily to aid the individual in his estate planning; the individual apparently had sufficient funds at the time to satisfy the amount owed; and, ever since, he respected the rental agreement with the trust and left the trust money untouched. Although the individual may have been partially motivated by concerns about tax collection, that, alone, was not a sufficient reason to pierce the trust to satisfy the individual's tax debts.J. Evseroff, DC N.Y., 2007-1 USTC ¶50,222. Vac'd and rem'd, CA-2 (unpublished opinion), 2008-1 USTC ¶50,240.The government sufficiently pleaded facts to support its claim that it was entitled to reduce to judgment several tax liens assessed against an individual and satisfy those liens through foreclose of a property that belonged to a land trust; therefore, the individual's motion to dismiss was denied. The government alleged that the land trust held the title to the property, and that the trust and its trustee were nominees or alter egos of the individual, thereby sufficiently stating a claim to foreclose liens on the trust property and adequately stating facts that, if proven, would support such a claim. Further, under state (Ohio) law, the individual, as an equitable owner, was recognized as the owner of the property, because, although the legal title was invested in another, the real and beneficial use belonged to him. Moreover, the trust and the trustee were named in the complaint because of their interests in the property; therefore, they were put on notice of the government's claims against them.R.G. Gaumer, DC Ohio, 2008-1 USTC ¶50,130.A federal district court denied the government's motion for summary judgment in a lien foreclosure action because it failed to prove that a trust was the nominee or alter ego of the delinquent taxpayers. The government could not rely on the alter ego theory because the property had been transferred into the trust before the government had assessed the delinquent taxes. Moreover, it failed to show that the taxpayers exercised control over the trust and its assets, used trust funds to pay their personal expenses or had a family relationship with the trustee.E. Lena, DC Fla., 2008-1 USTC ¶50,147.A trust was the nominee of a married couple and liens for the couple's unpaid taxes attached to the property in the trust and could be foreclosed. Despite the couple's conveyance of their residence to the trust, they retained all interests in that property that they possessed prior to the transfer. They continued to live on the property and claimed it as their homestead, paid bills due on the property from their personal funds and continued to make mortgage payments.E. Lena, DC Fla., 2008-1 USTC ¶50,403.The government was entitled to reduce tax assessments to judgment against an individual, in his personal capacity and as personal representative of an estate, and to foreclose the valid federal tax liens on the individual's residential property held nominally by a trust. The liens that encumbered the individual's residential property, which was conveyed to a trust created by the individual and his wife, were valid. The property was held by the trust as a nominee of the individual because the couple had continuous possession and enjoyment of the property, paid all its mortgage payments and other bills, claimed real estate tax and home mortgage interests on their tax return and testified that the trust was created for family financial planning purposes.K. Lang, DC Calif., 2008-2 USTC ¶50,473.

Trusts. --Tax Liens: Property Subject to Tax Liens: TrustsTax liens were effective to reach the following property.The taxpayer-beneficiary's interest in a spendthrift trust.Dallas Natl. Bank, CA-5, 46-1 USTC ¶9177, 152 F2d 582, 47-2 USTC ¶9405, 164 F2d 489, 48-1 USTC ¶9242, 167 F2d 468.LaSalle Natl. Bank (V.Schnadig-Bensinger) DC Ill., 86-2 USTC ¶9537, 636 FSupp 874.Riggs Natl. Bank, DC D.C., 86-1 USTC ¶9398, 636 FSupp 172.Income from spendthrift trust.C.O. Canfield, DC Calif., 39-2 USTC ¶9641.Mercantile Trust Co., DC Md., 45-1 USTC ¶9124, 58 FSupp 701.L.B. Howard, Jr., Tenn. SCt, 78-1 USTC ¶9396, 566 SW2d 521.J.D. Orr, CA-5, 99-2 USTC ¶50,668, 180 F3d 656. Cert. denied, 5/1/2000.An unliquidated "reasonable sum" which the taxpayer could claim from a trust for his maintenance and care.S.D. Magavern, CA-2, 77-1 USTC ¶9249, 550 F2d 797. Cert. denied, 434 US 826.Vested interest in a trust subject to complete defeasance.United Banks of Denver, CA-10, 76-2 USTC ¶9691, 542 F2d 819.A trust that arose in favor of the taxpayer when his daughter-in-law purchased property from him and then instituted a suit to clear title.L. Decker, DC Utah, 62-1 USTC ¶9455.Life estate in a trust, notwithstanding a forfeiture clause that provided that the taxpayer's interest would terminate if it became payable to the federal government.W.E. Taylor, DC Calif., 66-2 USTC ¶9522, 254 FSupp 752.Trust assets which were subject to the taxpayer's power of appointment.W.L. Ritter, CA-5, 77-2 USTC ¶9550, 558 F2d 1165.Funds deposited in a trust account pursuant to an agreement between a bank, a contractor, and the contractor's surety.Pan American Bank of Miami, DC Fla., 64-1 USTC ¶9271.Escrow account created on taxpayer's behalf.I. Johansson, DC Fla., 66-1 USTC ¶9334.Beneficial interest in an Illinois land trust.H. Lewis, DC Ill., 67-2 USTC ¶9693, 272 FSupp 993.Southwest Federal Savings & Loan Asso. of Chicago, Ill. Appellate Ct., 60-1 USTC ¶9237.Undivided interest in trust estate.Glasser, DC Ill., 57-2 USTC ¶9847.Assets that the taxpayers transferred to a family trust, over which they retained control.Allen Family Trust, DC Kan., 82-1 USTC ¶9322.Don Gastineau Equity Trust, DC Calif., 88-1 USTC ¶9314, 687 FSupp 1422.Property acquired by the taxpayer in the name of a straw party.Miller Bros. Construction Co., CA-10, 74-2 USTC ¶9817, 505 F2d 1031.Code Products Corp., DC Pa., 63-1 USTC ¶9367, 216 FSupp 281.An automobile transferred to trustees by a bankrupt.W.C. Bates, BC-DC Ore., 88-1 USTC ¶9124, 81 BR 63.Property transferred from a husband and wife to a trust in exchange for beneficial interests which were transferred and retransferred between the spouses and their children.L.A. Newgard, Jr., DC N.D., 89-2 USTC ¶9395. Aff'd, CA-8 (unpublished opinion 6/6/90).Community property that was transferred to a trust before tax liens arose but where the taxpayers were the settlors, trustees and beneficial owners of the trust with the right to withdraw its assets or dissolve the trust at any time.H. Stolle, DC Calif., 2000-1 USTC ¶50,329.Levies served upon the trust assets of a trust established for the benefit of the taxpayer were enjoined. The testatrix's will, in which a portion of her estate was left in trust for the benefit of the taxpayer, her son, required payment of trust income to the taxpayer; however, with respect to the trust principal, it merely gave the trustee the power to distribute assets as she in her discretion deemed advisable.N. Pulizzotto, DC N.J., 90-2 USTC ¶50,421.A taxpayer's renunciation, under state (Nebraska) law, of his interest in a trust did not extinguish the federal tax lien attached to the interest. The state court's acceptance of the taxpayer's renunciation of the trust specifically left open the question of existing tax liens. Even if the state court had not made the exception for tax liens, the transfer of property after the attachment of a tax lien does not affect the lien, which attaches to the property itself.F.S. Solheim, CA-8, 92-1 USTC ¶50,043, 953 F2d 379.A federal tax lien and subsequent levy did not attach to the withheld discretionary disbursements of a spendthrift trust to which the debtor/beneficiary did not have a property interest under state law (Texas). The spendthrift clause protected trust property from attachment of the IRS lien since the taxpayer had merely an expectancy of trust disbursements.H.C. Wilson, BC-DC Tex., 92-2 USTC ¶50,333.An IRS lien could only attach to the taxpayer-beneficiary's property interest in trust income, not to the principal of the trust. The trust was maintained such that a support trust was created as to the income and a discretionary trust as to the principal. Under state (Maryland) law, the taxpayer had only a property interest in escrowed and future trust income because he had no control over distribution of the principal. Accordingly, the IRS's lien could attach solely to that portion of the trust in which the taxpayer had an interest.First of America Trust Co., DC Ill., 93-2 USTC ¶50,507.An IRS tax lien did not attach to the undistributed principal and income of three trusts established by the beneficiary-taxpayer's father. However, following its perfection, the lien did attach to all amounts distributed, or to be distributed, by the trusts to the beneficiary. Although an independent trustee had absolute discretion as to the distribution of principal and income, the beneficiary had acquired, and would in the future acquire, a property right each time the trustee decided to make a distribution to him and determined the amount of that distribution. The IRS lien also attached to the income of a fourth trust, which the trustee was required to pay to the beneficiary at reasonable intervals. As in the case of the other trusts, the lien would also attach to any principal of the fourth trust that the trustee distributed to the beneficiary.S. Cohn, DC Conn., 94-1 USTC ¶50,262, 855 FSupp 572.Joint bank accounts were owned by a decedent's other son, who was the trustee of his mother's purported testamentary trust and also the appointed executor of both her estate and his deceased father's estate.G.L. Walker, DC Ky., 92-1 USTC ¶50,065.A federal tax lien attached to real property which was held in a land trust for the benefit of individuals who were delinquent in paying their taxes. Although, technically, legal title rested in the trustee, the beneficiaries of the land trust were the equitable owners of the property.M.J. Stamps, DC Ill., 93-1 USTC ¶50,280.Where (1) an individual and trust beneficiaries in an action by the federal government to foreclose tax liens offered no evidence to disprove the government's assertion that assets held in a trust and by a receiver were owned by the individual and (2) the individual had admitted ownership of those assets in prior proceedings in connection with his filing of a petition in bankruptcy, the government was entitled to summary judgment.W. Werner, DC N.Y., 94-2 USTC ¶50,345, 857 FSupp 286.Issues of fact regarding the intent of a married couple in transferring real estate subject to a federal tax lien to trusts for the benefit of their children precluded a summary judgment that the trust held the couple's property merely as nominees or alter egos.J.G. Stepard, DC Ariz., 95-1 USTC ¶50,274. Aff'd on another issue, CA-9, 95-2 USTC ¶50,413.The district court properly ordered enforcement of federal tax liens on married taxpayers' property that they had transferred to trusts that were their alter egos. To the extent the taxpayers attempted to challenge the finding, they lacked standing due to their contention that the property belonged to the trusts. Conversely, if they contended that they owned the property, their argument that they transferred ownership to the trusts failed.International Tax Strategies, CA-9 (unpublished opinion), 99-2 USTC ¶50,820, aff'g an unreported District Court decision. Cert. denied, 5/30/2000.An IRS lien attached to proceeds (notes and mortgages) from the sale of several nursing homes held by two trusts for which the taxpayer was trustee. Based on retained powers and rights with respect to the trusts, the trust property belonged to the taxpayer in her individual capacity. However, the lien only attached to the taxpayer's present right to receive annual distributions from net earnings in a third trust over which the taxpayer had limited powers as trustee.P.F. Markham, CA-1, 96-1 USTC ¶50,118.On remand, the district court determined that the lien attached to the taxpayer's 25 percent proportional interest in net earnings from the trust. Further, under state (Massachusetts) law, a mortgage payment made to the trust represented a payment of mortgage interest, not principal, and, therefore, was income to the trust and subject to the lien.P.F. Markham, DC Mass., 96-2 USTC ¶50,625.Under state (Illinois) law, a trust was not the alter ego of an individual for purposes of subjecting his interest in the trust's property, which consisted of the residence he owned in joint tenancy with his wife, to federal tax liens. Although the husband continued to use the property as his residence and place of business, the trust's beneficiaries, who were his children, also resided at the property. It was not shown that the couple exercised complete dominion and control over the property.R.E. Hatfield, DC Ill., 96-2 USTC ¶50,342.A federal tax lien against a delinquent taxpayer's property that was properly assessed, noticed, and recorded had priority over a trust's claim to wages owed by a corporation for services performed by the taxpayer. Pursuant to an "Independent Contractor Agreement" entered into between the trust and the corporation, the taxpayer worked as a welder for the corporation, but his wages were paid to the trust. The taxpayer formed the trust after his tax liabilities were assessed, he exercised control over the funds in the trust, and the evidence indicated that the wages were channeled through the trust in anticipation of the tax lien. Thus, under state (Idaho) law, the trust qualified as the taxpayer's alter ego or nominee, and amounts payable to the trust constituted property of the taxpayer that was subject to the tax lien.Diversified Metal Products, Inc., DC Ida., 96-2 USTC ¶50,437.A creditor failed to present admissible evidence that a beneficiary of a land trust did not have an interest in the real property res of the trust. The beneficiary, as well as the IRS, stated that the beneficiary was the record owner of the real property at the time the IRS assessed its tax liens, which was prior to the transfer of the property to the land trust.V.H. McAnulty, DC Ill., 96-2 USTC ¶50,484. Motion for reconsideration granted on another issue, 96-2 USTC ¶50,485.An IRS tax lien against real property owned by delinquent taxpayers, which was recorded after the realty was sold to third parties, had priority over the purchasers' equitable lien that arose following a state (Florida) court-ordered rescission of the sale. The property was not part of a constructive trust that arose before the tax lien became choate; since the purchasers sought rescission of the deed, any constructive trust would encompass only the money paid for the property, and not the property itself.J.F. Wasenius, CA-11 (unpublished opinion), 97-1 USTC ¶50,433.The IRS was entitled to foreclose on residential property that was held in a married couple's nominee or alter ego trust. The nominee or alter ego theory applied because the creation of the trust did not coincide with economic realty and the trust was, in effect, a sham. The husband admitted that the trust was set up as a shell for the purpose of keeping his property at arm's length from potential creditors, including the IRS, and the undisputed facts established that he maintained active and substantial control over the trust. Since the trust was the nominee or alter ego of the couple, the timing of its creation was irrelevant.G.J. Landsberger, DC Ariz., 97-2 USTC ¶50,822. Aff'd, CA-9 (unpublished opinion), 99-1 USTC ¶50,318.Married taxpayers' contentions that assessments were based upon an erroneous determination concerning trust income were rejected. The trust was invalid under state (Oregon) law because it had no identifiable beneficiaries. A deed by which the taxpayers purported to convey real property to the trust was void as a sham transfer because it failed to identify a valid grantee. Therefore, title remained with the taxpayers.H.E. Wilfley, DC Ore., 97-2 USTC ¶50,825.The IRS was entitled to funds assigned to a trust that was created by an insurance agent to hold both his commissions and other agents' commissions that were assigned to him. The tax lien against the taxpayer and one of the other agents extended to the commissions paid on their behalf and those commissions assigned to the taxpayer by the remaining agents. Further, since the commissions were earned and paid after the tax lien became effective and since the trust's interest in the commissions did not become choate until they were paid, the tax lien had priority over the trust's interest.American Trust, DC Ohio, 97-2 USTC ¶50,759. Aff'd on another issue, CA-6, 98-1 USTC ¶50,369.Summary judgment that a trust was the alter ego of married taxpayers was denied. Genuine disputes existed as to whether the trust was established before or after the IRS began auditing the taxpayers, whether the taxpayers treated the trust property as their own and whether the taxpayers personally benefited from a loan made to the trust. There was also evidence that the trust income was distributed to beneficiaries in accordance with the trust agreement, that the trust filed its own tax returns and that the beneficiaries reported their trust income on their personal tax returns. Finally, material issues existed as to the core issues of the case, including the amount of taxes owed by the taxpayers and whether the taxpayers had received notice and demand from the IRS.J.R. Dean, DC Mo., 97-2 USTC ¶50,941.The IRS could not rely on an alter ego theory to levy the assets of a trust for the tax liability of its beneficiary-trustee. There was no unity of interest between the taxpayer and the trust, and a finding of alter ego liability was not necessary to avoid an inequitable result. The taxpayer's only trust interests were an income interest and an independently exercised discretionary spendthrift interest. Transfer of title to the trust's assets required the signature of a second trustee or the approval of a state court. Accordingly, the taxpayer had no direct interest in the trust's assets on which the IRS could levy. Moreover, the alter ego theory created an inequity as to the trust's other beneficiaries, particularly when the IRS could still file a lien against the taxpayer's discretionary interest and bring an action under Code Sec. 7403 to enforce it.S. Cohen, DC Calif., 98-2 USTC ¶50,769. Aff'd on another issue, CA-9 (unpublished opinion), 2000-1 USTC ¶50,297.The IRS was entitled to levy against a residence held by married debtors as trustees for their son in order to satisfy their tax liabilities. Although under state (Pennsylvania) law, title to the residence may have vested in the son when his parents created the trust, the parents' subsequent behavior indicated that they were the equitable owners of the house, and the trust held the property merely as their nominee. Further, while the trust was not created merely to avoid the parents' tax liabilities, it was created to safeguard the residence from future creditors. Also, the debtors paid the mortgage and related expenses and claimed federal tax deductions as if they owned the home. Finally, it was not inequitable to allow the liens to attach to the property.E.T. Richards, Jr., DC Pa., 99-1 USTC ¶50,317, 231 BR 571.Summary judgment was granted to the IRS allowing an IRS tax lien to attach to the taxpayer-beneficiary's interest in a valid trust. Although the taxpayer agreed to transfer his interest in the trust to his wife pursuant to a separation agreement prior to the filing of the tax lien, there was no evidence of any writing extinguishing the taxpayer's interest in the trust. Moreover, the IRS's tax lien was valid because the trustees' transfer of the property to the taxpayer's wife took place after the filing of the tax lien, thus, the purported transfer was a nullity.M. Murray, CA-1, 2000-2 USTC ¶50,571.A debtor's assignment of his interest as a naked owner beneficiary in an usufructuary trust as a security interest for real estate venture loans was a valid assignment that was perfected prior to filing of IRS liens. The trust instrument did not address the alienation or encumbrance rights of a naked owner beneficiary; therefore, under state (Louisiana) law the debtor was not prevented from assigning his interest in the trust.T.J. David, DC La., 2000-1 USTC ¶50,238, 83 FSupp2d 736.The government was entitled to foreclose its tax liens on real property that a taxpayer transferred to a nominee trust. The trust filed no income tax returns and failed to observe trust formalities such as meetings or trustees. Moreover, the trust beneficiaries were the taxpayer's children, who had little knowledge as to the existence of the property or the operations of the trust.J.W. Marsh, DC Hawaii, 2000-2 USTC ¶50,726, 114 FSupp2d 1036.Real property held in trust for the benefit of the taxpayer and his former spouse was subject to federal tax liens that attached to the property before the taxpayer transferred his interest as part of a divorce decree.A. Bruno, DC Ill., 2000-2 USTC ¶50,831.The IRS properly levied against property held by married taxpayers' alter ego trust over which the couple retained active and substantial control. They continued to treat property transferred to the trust as if it still belonged to them and the trust paid minimial or no consideration for transfer of the property title.R.G. Powell, DC Ariz., 2001-1 USTC ¶50,305. Aff'd, CA-9 (unpublished opinion), 2002-1 USTC ¶50,254.The IRS properly levied against property held by the taxpayers' alter ego trust, over which they retained active and substantial control. The taxpayers formed the trusts to hold and manage their property as a tax evasion device.J.M. Boyce, Jr., DC Calif., 2001-1 USTC ¶50,368.State (Tennessee) law restraints on alienation of a debtor's beneficial interest in a qualified retirement trust did not prevent an IRS tax lien from attaching to the beneficial interest. The Tennessee trust provisions did not affect the status of the beneficial interest as property or rights to which a tax lien could attach. The lien attached to both alienable and inalienable property. Accordingly, the state's restrictions on alienation were not enforceable under nonbankruptcy law, rendering the IRS's claim against the pension rights of the trust valid.J.L. Berry, BC-DC Tenn., 2001-1 USTC ¶50,466.A delinquent taxpayer's interest in a testamentary trust of which he was a co-trustee and the sole beneficiary constituted a property right despite the fact that it had no permanently fixed dollar value. Thus, the government was entitled to foreclose a federal tax lien against his trust interest in order to collect his outstanding personal income tax obligations. Although under state (Colorado) law, a beneficiary of a discretionary trust has a mere expectancy rather than a property interest in that trust, the testamentary trust in the present case was distinguishable from a discretionary trust. For purposes of foreclosing the lien, the taxpayer was deemed to hold a 100% interest in the trust assets.J. Delano, DC Colo., 2002-1 USTC ¶50,229, 182 FSupp2d 1020.On reconsideration of J. Delano (DC Colo., 2002-1 USTC ¶50,229), a co-trustee of a trust was found to be the sole beneficiary of the trust during his lifetime. Further, the beneficiary, as the trustee, had the power to terminate the trust and distribute the trust assets to himself. Therefore, the remainder beneficiaries merely had an expectancy interest in the trust assets and the prior determination that the co-trustee was, in fact, the only beneficiary for purposes of determining whether a tax lien could attach to his interests in the trust assets was unaffected.J. Delano, DC Colo., 2002-1 USTC ¶50,261.The government's motion for summary judgment on its contention that a trust was the alter ego/nominee of an individual was denied as it failed to present sufficient evidence to support such a claim. Genuine issues of material fact existed as to whether the taxpayer received consideration for the transfer to the trust, or that he continued to exercise dominion and control over the property after the transfer.D. Billheimer, DC Ohio, 2002-1 USTC ¶50,424.See also, ¶38,136.56.Co-trustees who held an interest in corporate assets that were transferred to several trusts were only nominees of the corporation. They were not permitted to interfere with the foreclosure or judicial sale of the real property because the trusts were sham trusts and alter egos of the corporation. The corporation's officers had created the trusts for the purpose of defrauding the United States by impeding the collection of income taxes and Federal Insurance Contribution Act (FICA) taxes. Therefore, the transfer of the real property to the sham trusts was a fraudulent conveyance and the property was subject to federal tax liens and foreclosure.Mathis Implement, Inc., DC S.D., 2006-1 USTC ¶50,279.A federal tax lien attached to all property owned by an officer of a corporation as the result of his failure to pay over withholding taxes following assessment. The tax lien also attached to property held in a trust since he had effective control over the trust and true beneficial ownership of the property. The lien continued to attach to the property after record title was transferred to the individual's son, who held title to the property as his father's nominee.R.G. Novelli, DC Calif., 2006-1 USTC ¶50,283.The beneficiary of two offshore trusts was ordered to repatriate trust assets to satisfy the tax liabilities of the beneficiary and her deceased husband who had also been a beneficiary of the trusts. As the surviving beneficiary, the widow had actual control of the trusts' corpus so that the monies funding the trust were really her assets; thus, they were subject to a federal tax lien.R. Grant, DC Fla., 2006-2 USTC ¶50,553.The government could foreclose on a parcel of undeveloped land held by sham entities created by a married couple to avoid payment of their income taxes. The entities, which included a trust and a religious mission, were mere nominees or alter egos of the couple. They were the sole trustees of the trust and its funds were used to pay their personal expenses. Moreover, the amount of income paid out from the trust to the couple was the exact amount of the deductions and exemptions shown on their tax returns for the tax years at issue. The trust and the mission had no legitimate purpose and the couple could not use them as a shield against paying the income taxes they owed to the government.J.G. Bahrs, DC Fla., 2006-2 USTC ¶50,568. Aff'd, per curiam, on another issue, CA-11 (unpublished opinion), 2007-2 USTC ¶50,557.The government could not seize assets of an irrevocable trust created by an individual in order to help satisfy the individual's tax liability. Although the individual had mixed motives when establishing and funding the trust, the government did not establish that he was insolvent at the time. Thus, it failed to meet its burden of proving actual or constructive fraud under state (New York) law. Moreover, the trust was not the individual's alter ego. It was set up primarily to aid the individual in his estate planning; the individual apparently had sufficient funds at the time to satisfy the amount owed; and, ever since, he respected the rental agreement with the trust and left the trust money untouched. Although the individual may have been partially motivated by concerns about tax collection, that, alone, was not a sufficient reason to pierce the trust to satisfy the individual's tax debts.J. Evseroff, DC N.Y., 2007-1 USTC ¶50,222. Vac'd and rem'd, CA-2 (unpublished opinion), 2008-1 USTC ¶50,240.The government sufficiently pleaded facts to support its claim that it was entitled to reduce to judgment several tax liens assessed against an individual and satisfy those liens through foreclose of a property that belonged to a land trust; therefore, the individual's motion to dismiss was denied. The government alleged that the land trust held the title to the property, and that the trust and its trustee were nominees or alter egos of the individual, thereby sufficiently stating a claim to foreclose liens on the trust property and adequately stating facts that, if proven, would support such a claim. Further, under state (Ohio) law, the individual, as an equitable owner, was recognized as the owner of the property, because, although the legal title was invested in another, the real and beneficial use belonged to him. Moreover, the trust and the trustee were named in the complaint because of their interests in the property; therefore, they were put on notice of the government's claims against them.R.G. Gaumer, DC Ohio, 2008-1 USTC ¶50,130.A federal district court denied the government's motion for summary judgment in a lien foreclosure action because it failed to prove that a trust was the nominee or alter ego of the delinquent taxpayers. The government could not rely on the alter ego theory because the property had been transferred into the trust before the government had assessed the delinquent taxes. Moreover, it failed to show that the taxpayers exercised control over the trust and its assets, used trust funds to pay their personal expenses or had a family relationship with the trustee.E. Lena, DC Fla., 2008-1 USTC ¶50,147.A trust was the nominee of a married couple and liens for the couple's unpaid taxes attached to the property in the trust and could be foreclosed. Despite the couple's conveyance of their residence to the trust, they retained all interests in that property that they possessed prior to the transfer. They continued to live on the property and claimed it as their homestead, paid bills due on the property from their personal funds and continued to make mortgage payments.E. Lena, DC Fla., 2008-1 USTC ¶50,403.The government was entitled to reduce tax assessments to judgment against an individual, in his personal capacity and as personal representative of an estate, and to foreclose the valid federal tax liens on the individual's residential property held nominally by a trust. The liens that encumbered the individual's residential property, which was conveyed to a trust created by the individual and his wife, were valid. The property was held by the trust as a nominee of the individual because the couple had continuous possession and enjoyment of the property, paid all its mortgage payments and other bills, claimed real estate tax and home mortgage interests on their tax return and testified that the trust was created for family financial planning purposes.K. Lang, DC Calif., 2008-2 USTC ¶50,473.