In the Dornbrock case, below, was published on January 17, 2009. The case involves a nominee lien issue. The nominee theory may be established without a showing of fraud. See, e.g., United States v. Bollinger [ 88-1 USTC ¶9233], 485 U.S. 340 (1988) (corporation held title to property as a nominee for partnerships so the partnerships could avoid Kentucky usury law). A nominee holds bare legal title to property for the benefit of another. Black's Law Dictionary (7th Ed. 1999); United States v. Gilbert, 244 F.3d 888, 902 n.37 (11th Cir. 2001). When a taxpayer's property or rights to property are held in the name of another, or are transferred to another with the taxpayer retaining beneficial ownership, the third party is said to hold the property as a nominee for the taxpayer. William D. Elliott, Federal Tax Collections, Liens, and Levies ¶ 9.10[1] at 9-93 to 9-94. The "nominee theory involves the determination of the true beneficial or equitable ownership of the property" at issue. Oxford Capital Corp. v. United States [ 2000-1 USTC ¶50,447], 211 F.3d 280, 284 (5th Cir. 2000). "Focusing on the relationship between the taxpayer and the property, the [nominee] theory attempts to discern whether a taxpayer has engaged in a sort of legal fiction, for federal tax purposes, by placing legal title to property in the hands of another while, in actuality, retaining all or some of the benefits of being the true owner." In re Richards [ 99-1 USTC ¶50,317], 231 B.R. 571, 578 (E.D. Pa. 1999); see also Shades Ridge Holding Co., 888 F.2d at 728 (nominee theory focuses on delinquent taxpayer's relationship to the property); May v. United States [ 2007-2 USTC ¶50,799], Case No. 07-10531, 2007 WL 3287513 (11th Cir., Nov. 8, 2007) (same). Who really benefits from and controls the property is at the heart of a nominee case. The issue is important to tax return preparers for obvious reasons. For example, income is taxable income to the true owner of the property, and that owner could be the substantive owner. I see these issues frequently and, in my opinion, the factors considered justify a substance over form analysis. The government was entitled to foreclose tax liens that attached to a property held by a corporation as the nominee of a delinquent taxpayer. The government established that the individual was the true beneficial and equitable owner of the property. The corporation had no business purpose and was created for the sole purpose of holding title to the property. The individual was the only officer and director of the corporation and controlled the funds, assets and bank accounts of the corporation and related entities for his own benefit. Moreover, the individual exercised clear dominion and control over the property because he was the sole occupant, never paid any rent for its use, controlled the manner in which the property could be used and claimed an ownership interest in the property.



United States of America, Plaintiff v. William L. Dornbrock a/k/a Robert William Lee, Inland Management Systems, Inc., and Intelec, Inc., f/k/a Integra Engineering, Inc., Defendants.

U.S. District Court, So. Dist. Fla., Fort Lauderdale Div.; 06-61669-CIV-MARRA/GONZALEZ, January 17, 2008.

Related case at 2009-1 USTC ¶50,220.







FINDINGS OF FACT AND CONCLUSIONS OF LAW


GONZALEZ, District Court Judge: This action came before this Court to reduce to judgment the federal income tax liability of Defendant William L. Dornbrock ("Dornbrock") for tax years 1994 and 1995, and to foreclose on real property in collection of that liability. An agreed judgment was entered on August 31, 2007 as to the approximately $1.2 million liability against Defendant Dornbrock. The Court held trial in this matter commencing on November 19, 2007. The main issue at trial was whether Defendant Dornbrock is the true owner of the real property upon which the United States seeks to foreclose. Defendant Dornbrock is the sole occupant of the subject property, a three-bedroom condominium in Ft. Lauderdale, purchased in 1997 for $499,000 and assessed in 2007 as worth approximately $780,000. The condominium has at all times been titled in the name of Inland Management Systems, Inc. ("Inland").

The United States alleges that defendant Inland is a nominee for the true owner, Defendant Dornbrock. The defendants counter that Inland is a nominee for defendant Intelec, Inc., formerly known as Integra Engineering, Inc. ("Intelec"). The United States responds that if Intelec is determined to be the beneficial owner of the condominium, then because Intelec is the alter ego / nominee of Intelec owner Defendant Dornbrock, Defendant Dornbrock remains the only true owner of the condominium. The defendants deny that Defendant Dornbrock owns Intelec.



I. FINDINGS OF FACT

1. On April 28, 2000, Defendant Dornbrock consented to a U.S. Tax Court judgment for income tax liabilities for tax years 1994 and 1995.

2. On June 2, 2000, Notices of Federal Tax Lien were recorded in Broward County, Florida against William L. Defendant Dornbrock, Robert W. Lee, and Inland Management Systems, Inc.

3. Pursuant to an agreed judgment in this case, Defendant Dornbrock is indebted to the United States for unpaid income taxes, penalties, and interest for the tax years 1994 and 1995 in the amount of $1,206,570.43, plus interest and statutory additions as allowed by law from August 31, 2007 until the judgment is paid.



A. Defendant Dornbrock Controlled and Benefitted from Unit 1005.

1. Defendant Inland Management Systems, Inc. was formed for the sole purpose of holding title to a three-bedroom condominium, Unit 1005 in the Point of the Americas II complex. The condominium is located at 2200 S. Ocean Boulevard, Ft. Lauderdale, Florida ("Unit 1005").

2. Inland is record title holder of Unit 1005. Since the October 31, 1997 purchase of Unit 1005, title has not been held by any other entity or person.

3. Point of Americas II Condominiums approved a sale of Unit 1005 to Inland.

4. Inland has no business purpose and has never filed a tax return.

5. Inland was automatically dissolved as a Michigan corporation on July 15, 2002.

6. Inland is not a Florida corporation.

7. Defendant Dornbrock has always been the only officer and director of Inland and the only person to act on behalf of Inland. He has held himself out as an officer of Inland. Defendant Dornbrock was the president, CEO, secretary, treasurer, and CFO of Inland.

8. Defendant Dornbrock is the only person authorized to sign bank checks for Inland and the only person who signs any documents on behalf of Inland.

9. No documentary evidence reflects that Inland is owned by Intelec.

10. Defendant Dornbrock has identified himself as the owner of Unit 1005. [Exhibit 305 page 2 paragraph 2.]

11. Defendant Dornbrock has always been the sole occupant of Unit 1005.

12. Defendant Dornbrock controls the use of Unit 1005. He decides who may stay there and for what purpose the Unit is used.

13. Defendant Dornbrock has never paid rent for the use of Unit 1005.

14. Defendant Dornbrock may have guests at Unit 1005 without approval.

15. There are no restrictions imposed by Intelec or Inland or Maureen Russell on Defendant Dornbrock's use of Unit 1005.

16. Defendant Dornbrock has never declared his use of Unit 1005 as income.

17. No individual other than Defendant Dornbrock has claimed an ownership interest in Unit 1005.

18. Absent an order of foreclosure in this case, Defendant Dornbrock has the power at any time to sell the condominium and use the sale proceeds.

19. There is no mortgage on Unit 1005. It was purchased for $499,000.

20. Unit 1005 was assessed by Broward County in 2007 at $783,860.

21. Unit 1005 was purchased for Defendant Dornbrock's benefit.

22. At the time of the purchase of Unit 1005, the IRS was examining Defendant Dornbrock's tax returns and Defendant Dornbrock had retained counsel to appear on his behalf before the IRS.

23. Within the same year that Unit 1005 was purchased for Defendant Dornbrock, Unit 207 was purchased for the benefit of Timothy and Maureen Russell.

24. Defendant Dornbrock processes and pays all expenses of Unit 1005.

25. Defendant Dornbrock has authorized improvements to Unit 1005 in 2003.


B. Defendant Dornbrock Controls the Funds, Assets, and Bank Accounts of Inland, Integra, Intelec, Support Solutions and Related Entities for his Benefit. He Intentionally Holds No Assets in his Name.


1. Defendant Dornbrock opened and maintains a bank account in Inland's name. Defendant Dornbrock makes deposits and writes checks on the Inland account. The checks on the Inland bank account include payment of Defendant Dornbrock's personal expenses, including credit cards debt, resort fees, and gifts to family. Defendant Dornbrock also writes checks to pay the taxes and expenses affiliated with Unit 1005.

2. Defendant Dornbrock maintains no bank accounts in his name from which he pays his expenses. He uses bank accounts in the name of Inland and Support Solutions, Inc. to pay his personal expenses.

3. Defendant Dornbrock freely transfers funds between financial accounts he controls in the names of Integra, Inland, Support Solutions, Internal Technical Services, and Continental Manage.

4. Defendant Dornbrock holds no assets in his name, including real estate, cars, boats or financial accounts. His boat in Michigan is titled in the name of Continental Management, Inc., a corporation that does no business. His son, Dennis Dornbrock, is the primary user of the boat.

5. Defendant William Lee Dornbrock has used the alias Robert William Lee, including owning property, signing documents, and maintaining a checking account under the alias to aid in the concealment of assets.

6. Defendant Dornbrock has opened financial accounts for his sole personal benefit at ING and Fidelity and under the Inland American Real Estate Trust but placed the accounts in the name of Support Solutions, Inc., a defunct corporation.

7. Support Solutions, Inc. operated from 1998 to 2002 as a temporary staffing company. It was not owned by any other entity. It is a defunct company. The last tax return it filed was for tax year 2002.

8. Defendant Dornbrock represented to Patrick Kirby that he owned Integra Engineering, Inc. and sold assets of Integra to Kirby in an Asset Purchase Agreement signed by Defendant Dornbrock on behalf of Integra on December 31, 2004.

9. As a result of the Asset Purchase Agreement, checks and wire transfers of more than $400,000 were made to the account number 3660564271 of Support Solutions, Inc. Defendant Dornbrock misrepresented to Kirby that Support Solutions owed Integra. Defendant Dornbrock is the only signatory to the Support Solutions bank account into which the sales proceeds were deposited.

10. Defendant Dornbrock transferred more than $300,000 from the Support Solutions bank account to financial accounts for his personal benefit and over which he has sole control. Support Solutions has paid no taxes with regard to income from these accounts.

11. Defendant Dornbrock was an authorized signatory on the Integra Engineering, Inc. bank accounts at Comerica Bank from at least from February 28, 2002 and wrote checks on the Comerica accounts, including transferring money to the Support Solutions, Inc. account he controlled, after Support Solutions no longer did business.

12. Defendant Dornbrock transferred funds from the Comerica Bank accounts of Integra for his own benefit.

13. Defendant Dornbrock and Timothy Russell controlled Integra Engineering, Inc. until Timothy Russell's death on December 7, 2001.

14. Defendant Dornbrock and Timothy Russell, while he was living, held themselves out as partners in Integra Engineering, Inc.

15. Any remaining ownership interest or claims Maureen Russell may have had in Integra Engineering Inc. after her husband Timothy Russell died were transferred to Defendant Dornbrock in or about February 2005.

16. On January 31, 2005, Defendant Dornbrock had the name of Integra Engineering, Inc. changed to Intelec, Inc., but Intelec, Inc. does no business, has no bank accounts, and has never filed a tax return.

17. Integra Engineering, Inc. last filed a Form 1120 federal income tax return for tax year 2004. It reported $38,239 in net taxable income for 2004.

18. Integra Engineering, Inc. Form 1120 federal income tax returns were signed by Defendant Dornbrock from 1997 through 2002.

19. Integra Engineering, Inc. did not identify Unit 1005 as a corporate asset to the IRS.

20. Maureen Russell denies an ownership interest in Unit 1005.

21. Maureen Russell owns Unit 201.



II. CONCLUSIONS OF LAW

a. A tax lien arises by operation of law upon the assessment of an income tax deficiency. 26 U.S.C. §§6321, 6322.

b. A tax lien attaches to any interest a taxpayer holds or will hold in property, including property held by a nominee or alter ego. G.M. Leasing v. United States [ 77-1 USTC ¶9140], 429 U.S. 338, 350-51 (1977); Shades Ridge Holding Co., 888 F.2d 725, 729 (11 th Cir. 1989). A tax lien applies to any interest in property a taxpayer acquires after the lien. United States v. McDermott [ 93-1 USTC ¶50,164], 507 U.S. 447 at 447 (1993); see also Glass City v. United States [ 45-2 USTC ¶9449], 326 U.S. 265, 267 (1945) (tax lien applies to all property of taxpayer at any time during the life of the lien). The language of Section 6321 "is broad and reveals on its face that Congress meant to reach every interest in property that the taxpayer might have." United States v. National Bank of Commerce [ 85-2 USTC ¶9482], 472 U.S. 713, 719-20 (1985) ("Stronger language could hardly have been selected to reveal a purpose to assure the collection of taxes.")

c. A Notice of Federal Tax Lien operates as public notice to those who might seek to buy property titled to either the taxpayer or his or her known nominees that the property is encumbered and any sale would be subject to the government's claim. 26 U.S.C. §6323; Fla. Stat. §695.01(1) (recording to perfect a lien).

d. The nominee theory may be established without a showing of fraud. See, e.g., United States v. Bollinger [ 88-1 USTC ¶9233], 485 U.S. 340 (1988) (corporation held title to property as a nominee for partnerships so the partnerships could avoid Kentucky usury law).

e. A nominee holds bare legal title to property for the benefit of another. Black's Law Dictionary (7th Ed. 1999); United States v. Gilbert, 244 F.3d 888, 902 n.37 (11th Cir. 2001).

f. When a taxpayer's property or rights to property are held in the name of another, or are transferred to another with the taxpayer retaining beneficial ownership, the third party is said to hold the property as a nominee for the taxpayer. William D. Elliott, Federal Tax Collections, Liens, and Levies ¶ 9.10[1] at 9-93 to 9-94.

g. The "nominee theory involves the determination of the true beneficial or equitable ownership of the property" at issue. Oxford Capital Corp. v. United States [ 2000-1 USTC ¶50,447], 211 F.3d 280, 284 (5th Cir. 2000). "Focusing on the relationship between the taxpayer and the property, the [nominee] theory attempts to discern whether a taxpayer has engaged in a sort of legal fiction, for federal tax purposes, by placing legal title to property in the hands of another while, in actuality, retaining all or some of the benefits of being the true owner." In re Richards [ 99-1 USTC ¶50,317], 231 B.R. 571, 578 (E.D. Pa. 1999); see also Shades Ridge Holding Co., 888 F.2d at 728 (nominee theory focuses on delinquent taxpayer's relationship to the property); May v. United States [ 2007-2 USTC ¶50,799], Case No. 07-10531, 2007 WL 3287513 (11th Cir., Nov. 8, 2007) (same). Who really benefits from and controls the property is at the heart of a nominee case.

h. While the federal courts generally apply the law of the forum state (in this case, Florida) to resolve nominee, alter-ego and similar questions, Florida, like many states, does not have a bright-line test for determining nominee ownership. Therefore, federal common law applies. See Towe Antique Ford Found. v. IRS [ 92-1 USTC ¶50,115], 791 F.Supp. 1450, 1454 (D. Mont. 1992), aff'd on other grounds [ 93-2 USTC ¶50,430], 999 F.2d 1387 (9th Cir. 1993) (applying the test for nominees used by other courts when no applicable law from the appropriate state can be found); cf. Grippo v. Perazzo, 357 F.3d 1218, 1222 (11th Cir. 2004) (where Florida law does not answer the question at bar, the court will "look to federal law for guidance"); see also May v. United States [ 2007-2 USTC ¶50,799], Case No. 07-10531, 2007 WL 3287513 (11th Cir., Nov. 8, 2007) (affirming trial court finding that delinquent taxpayer owned land titled to a nominee).


FACTORS


i. Factors considered to determine whether property is being held by a nominee of the taxpayer include: (1) whether the taxpayer exercised dominion and control over the property; (2) whether the property of the taxpayer was placed in the name of the nominee in anticipation of collection activity; (3) whether the purported nominee paid any consideration for the property, or whether the consideration paid was inadequate; (4) whether a close relationship exists between the taxpayer and the nominee; and (5) whether the taxpayer pays the expenses (mortgage, property taxes, insurance) directly, or is the source of the funds for payments of the expenses. See Scoville v. United States [ 2001-1 USTC ¶50,442], 250 F.3d 1198, 1202 (8 th Cir. 2001); Oxford Capital Corp. v. United States [ 2000-1 USTC ¶50,447], 211 F.3d 280, 284 (5 th Cir. 2000); Shades Ridge Holding Co., 888 F.2d at 729; United States v. Klimek [ 97-1 USTC ¶50,281], 952 F.Supp. 1100, 1113 (E.D. Pa. 1997).

j. Not all of the foregoing factors are of equal weight, and they "should not be applied rigidly or mechanically, as no one factor is determinative." In re Richards [ 99-1 USTC ¶50,317], 231 B.R. 571, 579 (E.D. Pa. 1999). See also Simpson v. United States [ 89-1 USTC ¶9285], 1989 WL 73212 at *6 (M.D. Fla. 1989).

k. The most critical issue is who has substantial control over the property. See Shades Ridge, 888 F.2d at 728 ("The issue under either state or federal law depends on who has 'active' or 'substantial' control."); see also In re Richards [ 99-1 USTC ¶50,317], 231 B.R. at 579, citing United States v. Kudasik [ 98-2 USTC ¶50,535], 21 F.Supp.2d 501, 508 (W.D. Pa. 1998).

l. A related principal to the nominee doctrine is the alter ego doctrine. There are common elements to both doctrines. While the nominee doctrine focuses on the relationship between the taxpayer and the property, the alter ego doctrine focuses on whether the taxpayer is similar to or controls another individual, trust, business or corporation. See, e.g., Century Hotels v. United States [ 92-1 USTC ¶50,080], 952 F.2d 107, 110 n.5 (5th Cir. 1992) (listing objective factors to be considered); see also Zahara Spiritual Trust v. United States [ 90-2 USTC ¶50,473], 910 F.2d 240, 245 (5th Cir. 1990).


CONCLUSION


The United States has met its burden of proving that Defendant Dornbrock is the true and sole beneficial owner of Unit 1005. It is clear that Defendant Dornbrock exercised dominion and substantial control over the property located at Point of Americas. Also, this Court determines that Defendant Dornbrock holds true beneficial and equitable ownership of the property.

Therefore, foreclosure of Unit 1005 is ordered. The United States shall sell Unit 1005 to satisfy Defendant Dornbrock's tax liabilities as reflected in the judgment of August 31, 2007. The United States will submit a proposed Order of Sale setting forth the details of sale.

Judgment shall be entered for the United States.

DONE AND ORDERED.

Real property. --Tax Liens: Property Subject to Tax Liens: Real property

Tax liens were effective to reach the following property.

Condominium unit and related common areas.

Rev. Rul. 79-55, 1979-1 CB 400.

An interest that the decedent had in an estate by the entirety, where the lien arose from federal estate taxes.

Detroit Bank, SCt, 43-1 USTC ¶9224, 317 US 329.

Equitable rights in real property.

E. Fox, DC N.D., 69-2 USTC ¶9695.

J. Schuster, DC Ohio, 73-1 USTC ¶9241.

Equitable interest in real property that the taxpayer was purchasing through an installment contract.

H.G. Runkel, Jr., CA-9, 76-1 USTC ¶9152, 527 F2d 914.

The taxpayer's residence, which was being purchased in his mother's name.

R.D. Williams, DC Ga., 84-2 USTC ¶9936.

Unrecorded fee interest in real property.

A.C. Fisher, DC Pa., 80-2 USTC ¶9583.

Real property that had been sold to a third party.

Juvenile Products of Pasadena, DC Calif., 51-1 USTC ¶9176, rev'd on another issue, 52-1 USTC ¶9108, 193 F2d 154.

Real property in the possession of a third party.

J. Morgan, Jr., DC La., 78-1 USTC ¶9243. Aff'd, CA-5 (unpublished opinion 8/6/80).

Real property subject to a so-called business lease.

O.W. Dickerson, DC Mo., 51-2 USTC ¶9453.

A hotel, notwithstanding a subsequent execution of a lease to a third party.

C. Marin, CA-1, 81-2 USTC ¶9506.

Fixtures attached to the taxpayer's building by its subsidiary.

Bullock, CA-2, 65-1 USTC ¶9143, 339 F2d 603.

Silt deposits that belonged to the taxpayer, a coal plant operator, and not to a land owner.

Gilberton Contracting Co., Inc., DC Pa., 66-2 USTC ¶9579, 255 FSupp 687.

Real property that the taxpayer gratuitously conveyed to his daughter.

Buchman, DC N.Y., 69-1 USTC ¶9307.

Reversionary interest in real property.

E.G. Lackey, DC N.C., 72-2 USTC ¶9578.

Undivided interest in real property.

Benson, DC Kan., 42-2 USTC ¶9621.

A. Vega, DC D.C., 45-1 USTC ¶9244.

M.E. Brandenburg, DC Calif., 52-1 USTC ¶9342.

One-half of joint tenancy property.

A.M. Borcia, DC Calif., 58-1 USTC ¶9119.

Taxpayer-husband's right of survivorship in the balance of funds derived from a sale of a tenancy by the entirety.

L.M. Ragsdale, DC Tenn., 62-2 USTC ¶9741.

One-half of the residential property owned jointly by the taxpayer and his wife.

B. Mosolowitz, DC Conn., 67-1 USTC ¶9350, 269 FSupp 12.

H.D. Popky, CA-3, 2005-2 USTC ¶50,466, 131 FedAppx 816.

One-half of tenancy in common.

I. Paurowski, DC Va., 72-1 USTC ¶9229. Aff'd on other grounds, CA-4, 73-1 USTC ¶9398, 475 F2d 1401.

Community real property that the taxpayer's ex-wife had received pursuant to their property settlement agreement.

R. Prewitt, CA-5, 86-2 USTC ¶9513, 792 F2d 1333.

A residence that was purportedly transferred by the taxpayer to an entity that was his alter ego.

H.M. Boos, DC Okla, 85-2 USTC ¶9639.

A pre-avoidance interest as a tenant by the entirety.

T. Barry, BD-DC, 83-2 USTC ¶9514, 31 BR 738.

A husband-taxpayer's property, notwithstanding the fact that it was subject to contingent and inchoate dower rights.

First National Bank of Elkhorn, Wis. Cty. Ct., 58-2 USTC ¶9568.

Chandler, Tenn. Probate Ct., 60-1 USTC ¶9238.

G.H. Griffin, Fla. DCA, 64-1 USTC ¶9436, 164 So2d 883.

L.D. Benn, DC Fla., 73-1 USTC ¶9415.

Real property that was being acquired by acquisitive prescription by a third party under Puerto Rican law.

M.E. Rodriguez, CA-1, 84-2 USTC ¶9698, 740 F2d 92.

A residence that was provided by the taxpayer's corporation to himself.

Travelers Rent-A-Car of Alaska, Inc., DC Hawaii, 87-1 USTC ¶9285.

An unrecorded interest in real property that was sold to a co-tenant before the IRS filed a tax lien.

A.L. Raimo, DC Pa., 88-1 USTC ¶9170.

Parcels of real estate transferred to the taxpayer's mother for a stated consideration of $10.

L.C. Weldon, DC N.C., 2002-1 USTC ¶50,288. Aff'd, per curiam, CA-4 (unpublished opinion), 2002-1 USTC ¶50,445.

Married taxpayers' residence and the husband's dental office.

L.D. Wight, DC Calif., 2002-1 USTC ¶50,287.

A. Patej, DC Mich., 2002-2 USTC ¶50,792

Real property fraudulently transferred by a delinquent taxpayer to his wife in order to avoid paying taxes. The wife, who was subsequently awarded the property in a divorce proceeding, could not avoid the lien based on the alleged priority of her dower rights.

A. Patej, DC Mich., 2002-2 USTC ¶50,792. Motion for reconsideration denied, 2003-1 USTC ¶50,250.

A husband's interest in entireties property constituted "property" or "rights to property" to which a federal tax lien could attach, despite the fact that, under state (Michigan) law, the property was exempt from the claims of creditors. Following the IRS's issuance of the lien against all of the husband's property, he and his wife jointly executed a quitclaim deed transferring his interest in a parcel of realty to her for $1. Upon the wife's sale of the property, half of the proceeds were placed in escrow pending a determination of the government's interest in the realty, and the wife brought a quiet title action seeking to recover the funds. According to the U.S. Supreme Court, the interpretation of Code Sec. 6321 is a federal question, and exempt status under state law is not binding on the federal tax collector. The Court examined the individual rights created by Michigan law in order to determine whether the husband possessed property or rights to property, and concluded that the broad language of Code Sec. 6321 demonstrates that Congress intended to reach every property interest that a taxpayer might have.

S.L. Craft, SCt, 2002-1 USTC ¶50,361.

A state foreclosure statute, which protected real estate once foreclosed upon from subsequent attachment by creditors, did not bar the government from its attempt to foreclose on the property.

R.C. Jones, DC Kan., 89-2 USTC ¶9411.

The transfer of a condominium by delinquent taxpayers to a related corporation did not defeat an IRS tax lien that was filed against the individuals only. Although the deed was executed before the IRS filed its lien, it was not recorded until afterward.

First of America Bank --West Michigan, DC Mich., 94-1 USTC ¶50,169.

Under state law (Minnesota), a creditor of an individual is permitted to reach corporate assets where the corporation functions as the individual's alter ego. However, there was a genuine issue of fact regarding whether a husband and wife used their corporation to conceal their assets in order to evade the collection of income tax. Thus, the corporation's motion for summary judgment in a suit to quiet title of real estate to which income tax liens had attached was denied.

BBCA, Inc., DC Minn., 90-1 USTC ¶50,309, 733 FSupp 73.

A tax lien on an individual taxpayer's real estate was superior to claims by his wholly owned corporation's bankruptcy trustee and by his wife. The bankruptcy trustee failed to establish that the corporation was entitled to have a constructive trust placed on the property by virtue of its having advanced to the taxpayer a part of the down payment for the original purchase of the property. The wife failed to establish a superior interest because the tax lien attached when the taxpayer originally took title in his name alone, which occurred before he subsequently conveyed the property to himself and his wife as joint tenants.

Hamilton & Son, Inc., BC-DC Me., 90-1 USTC ¶50,223.

A taxpayer did not show the existence of a tenancy in the entirety as to certain real estate so as to defeat an IRS lien on the property. The court was justified in ordering foreclosure of the IRS lien because no special equitable factors existed that would render the foreclosure overwhelmingly unjust to the taxpayer's wife.

R.L. Scharf, DC Mo., 91-1 USTC ¶50,205.

Real property allegedly conveyed by an exempt organization that was liable for taxes arising out of lottery activities to another exempt organization for insufficient consideration was subject to foreclosure for the satisfaction of tax liens.

Auxiliary to the Knights of St. Peter Claver, DC Ind., 92-1 USTC ¶50,176.

The IRS had valid tax liens upon all the taxpayer's property, right to property, and after-acquired property upon assessment of federal income taxes and additions to tax against the taxpayer. The taxpayer's right to the proceeds that the executor, as trustee, possessed after the sale of their mother's residence was a chose in action. Therefore, the federal tax liens against the taxpayer attached to the taxpayer's chose in action.

G.L. Walker, DC Ky., 92-1 USTC ¶50,065.

The government followed correct procedures in placing a tax lien upon a home. Therefore, seizure and sale of the home to satisfy unpaid tax debts was proper.

M.J. Geiselman, CA-1, 92-1 USTC ¶50,200, 961 F2d 1.

The IRS was authorized to foreclose a tax lien on real property owned by a corporation to satisfy the personal tax liabilities of an insolvent taxpayer because the corporation was determined to be the alter ego of the taxpayer under state (California) law.

Brownfield Investment Corp., DC Calif., 92-2 USTC ¶50,453. Aff'd, CA-9 (unpublished opinion 7/13/94).

Individuals who received real property by deed of gift from their tax-delinquent parents were denied injunctive relief against the IRS, which maintained a lien on the property; the Anti-Injunction Act barred any action seeking to restrain the IRS from collecting the parents' taxes by proceeding against the property, and no exception to the Act applied.

M.D. Ross, DC N.C., 94-2 USTC ¶50,372, 861 FSupp 406.

The IRS was entitled to one-half of the proceeds from the foreclosure sale of property held in joint tenancy by married taxpayers and upon which a federal tax lien relating to the husband's unpaid taxes had attached prior to his death. Under state (Wisconsin) law, the government's recovery was not limited to one-half of the value of the property at the time of the husband's death. Although the husband's interest in the property ended upon his death, his wife took the interest that he could have transferred prior to death subject to the tax lien. Further, if the government had enforced the lien during the husband's lifetime, it would have compelled a severance and his wife would have received no more than her one-half interest.

C.F. Librizzi, CA-7, 97-1 USTC ¶50,263.

A tax lien properly attached to an individual's marital residence. At the time of assessment, the individual and his wife held the property as joint tenants; therefore, the individual had a separable interest in the property to which the lien could attach even though the property was subsequently converted by the taxpayers to a tenancy by the entirety.

A.D. Davenport, Jr., CA-7, 97-1 USTC ¶50,213.

The amount that the government could recover on an IRS tax lien against an individual's interest in real property was not limited to the taxpayer's equity in the property at the time he conveyed it to his wife. The wife sold the property, which the couple held as tenants by the entireties, and used the proceeds to pay the balances of several liens against the property with priority over the tax lien. Since the lien was determined by reference to the taxpayer's interest in the property and was unaffected by the sale of the property, there was no reason to fix the amount recoverable on the lien based on the property's value at the time of the sale.

F.A. Avila, CA-3, 96-2 USTC ¶50,357, 88 F3d 229. Rev'g and rem'g J.D. Diemer, DC N.J., 94-2 USTC ¶50,420.

A lien for unpaid taxes relating to income an individual received from the illegal sale of drugs did not attach to a residence in which he lived but that was owned by a family farm. The farm was not the alter ego of the taxpayer. In addition, the taxpayer did not have any claim for damages against the farm that would represent an interest to which a lien could attach. The taxpayer also was required to provide to the IRS an accounting of the current assets and liabilities of the farm in order to determine the value of the taxpayer's stock to which the lien could attach. The taxpayer's children to whom his ex-wife had deeded the property were not entitled to the monetary value of the property because the ex-wife did not acquire any interest in the property due to the marriage.

D.J. Miller, DC Ohio, 96-2 USTC ¶50,445.

A previous court order established that the taxpayer was the only party with a potential interest in real property with respect to which the IRS held a tax lien. Thus, the IRS, was entitled to foreclose on the property.

R.L. Bodwell, DC Calif., 97-1 USTC ¶50,260. Aff'd, CA-9 (unpublished opinion), 98-1 USTC ¶50,172.

State (Indiana) law which prohibited the seizure and sale of land held as tenants by the entirety for the benefit of a spouse's creditors did not prevent the IRS from foreclosing on the property. The taxpayer's wife was not residing on the property and would not be harmed by its sale. The wife, however, was entitled to one-half of the sale proceeds.

R.S. Waltman, DC Ind., 97-2 USTC ¶50,760.

In a clarification of the above decision, real property owned by married taxpayers in a tenancy by the entireties was not subject to levy in order to satisfy the tax liabilities of the husband. State (Indiana) law created a unity of ownership that was not severable except upon consent of both parties. Thus, the IRS could not levy on entireties property to satisfy the tax debt of one spouse since neither spouse possessed an independent interest in the property. However, the husband's subsequent transfer of his interest to his wife so that she could convey the property to a third party constituted a fraudulent transfer. Accordingly, ownership reverted back to the taxpayers, and a sale of the property was ordered to satisfy the husband's tax liabilities.

R.S. Waltman, DC Ind., 98-1 USTC ¶50,487.

Summary judgment was granted to the IRS and denied to a joint owner of property in his third-party suit for refund of taxes that were owed by the other joint owner and collected by the IRS out of proceeds from the sale of the property. The IRS's notice of federal tax lien against the delinquent taxpayer was sufficient to protect its interest in the property, even though the lien was not in the proper form or properly indexed with respect to the property due to a misspelling of the taxpayer's name. Since the third-party owner did not purchase his interest from the delinquent taxpayer, he was not a subsequent bona fide purchaser protected under Code Sec. 6323.

J.D. Brady, DC Calif., 99-1 USTC ¶50,334. Aff'd, CA-9 (unpublished opinion), 2000-1 USTC ¶50,131.

A tax lien attached to real property held by a debtor and her husband as tenants by the entirety because the couple filed a joint return and, thus, assumed joint responsibility for taxes owing. While property held in tenancy by the entirety cannot be reached to satisfy the debts of an individual spouse under state (Virginia) law, it can be used to satisfy joint obligations.

T.A. O'Gorman-Sykes, BC-DC Va., 2000-1 USTC ¶50,174, 245 BR 815.

The government was granted summary judgment on the issue of the legitimacy and amount of a tax lien imposed against a residence held by married debtors as tenants by the entirety. The taxpayers, who filed joint returns for four tax years preceding the year of their marriage, attempted to avoid joint liability for the taxes owing by amending their returns to renounce the joint filing status claimed for those years. The IRS had the discretion to accept or reject the amended returns, and the taxpayers presented no valid reason for the court to require the IRS to accept those documents.

R.M. Sawyer, BC-DC N.C., 2000-1 USTC ¶50,175.

A bankruptcy court's determination that the IRS imposed a valid tax lien against a debtor's interest in real property, owned jointly with his spouse, was sustained. The tax lien attached to the joint tenancy interest in accordance with state (Oregon) law.

R.W. Pletz, CA-9, 2000-2 USTC ¶50,660.

The government was entitled to the surplus funds generated from the forced sale of married taxpayers' real property because the tax liens attached to the property before the taxpayers' creditors instituted the foreclosure proceeding.

Law Offices of Dean Malone, P.C., DC Tex., 2001-1 USTC ¶50,160.

A delinquent taxpayer's nondebtor ex-wife was not entitled to payment of her share of the sale proceeds from levied marital property ahead of the government. Upon assessment of the tax against her, a lien interest arose that attached to all property and rights to property held by her. Upon perfection of the tax lien, the government acquired a superior interest in the sale proceeds.

A. Doncheff, BC-DC Ark., 2001-1 USTC ¶50,215.

A delinquent taxpayer's conveyance of real property to his children constituted a sale, and not a valid inter vivos gift, under state (Arkansas) law. Thus, the taxpayer had an ownership interest in the property to which a tax lien could attach. Although the children tendered a promissory note to the taxpayer that was secured by a mortgage on the realty, which the taxpayer subsequently released, the purported release occurred several years after the alleged gift occurred and after the tax assessment was made. Consequently, the release did not definitively demonstrate that the conveyance was a gift or remove the lien against the property.

J. Jepsen, CA-8, 2001-2 USTC ¶50,698.

A lien was valid and could be foreclosed with respect to a parcel of real estate owned by a taxpayer's wife under the nominee theory. While the wife retained beneficial ownership of the land, it was purchased with the proceeds of a loan undertaken by the husband, the husband exercised clear dominion and control over the land, and held himself out as the owner of the property to tenants, a zoning board and a bank.

M. Olsen, Jr., DC Ill., 2002-1 USTC ¶50,360.

Married debtors who were equitable owners, but not owners of record, of a residence at the time they filed a bankruptcy petition could not avoid a federal tax lien against the property even though their personal liability for the underlying tax had been discharged. Pursuant to state (Florida) law, when they entered into a purchase agreement the debtors acquired a beneficial or equitable interest in the residence, to which the lien attached.

T.G. Ready, BC-DC Fla., 2001-2 USTC ¶50,637.

An order authorizing foreclosure and sale of real property owned by various related corporations and individuals was amended because factual errors in the order wrongfully excluded various properties.

W.M. Arnold, DC Fla., 2002-1 USTC ¶50,300.

The government was entitled to foreclose on an individual's real property in order to satisfy her delinquent tax liability. The government presented sufficient evidence to establish that the taxpayer was the owner of the property and that she possessed it at the time of the assessment.

M.M. Abbott, DC Nev., 2003-2 USTC ¶50,603.

The government was entitled to foreclose upon real property owned by married taxpayers resulting from their unpaid income taxes, interest and penalties. The government's secured claim was not limited to the extent of the taxpayers' equity in the property at the time the lien attached. As a result, the tax liens attached to the appreciated value of the residence.

S.B. Doyle, DC Pa., 2003-2 USTC ¶50,619.

The IRS has released guidance on collection efforts with respect to property held by a married couple in a tenancy by the entirety in circumstances where only one of the spouses is liable for outstanding tax liabilities. These guidelines have been issued in light of the ruling in S.L. Craft, SCt, 2002-1 USTC ¶50,361, that a federal tax lien arising under Code Sec. 6321 on all property and rights to property of a delinquent taxpayer attaches to the taxpayer's rights in entireties property, even though state (Michigan) law insulates such property from creditors' claims against only one spouse. The Service has set forth the general principles on which it will rely in addressing issues raised as a result of the Craft ruling. Also, it has provided nine questions and answers illustrating how it will apply Craft.

Notice 2003-60, 2003-2 CB 643

A federal tax lien properly attached to a condominium held in joint tenancy by a mother and her delinquent son. Despite the mother's assertion that joint ownership was transferred to the son solely for estate planning purposes, under state (Arizona) law, the son had an interest in the whole of the property that could be levied upon.

L. Nikirk, DC Ariz., 2003-2 USTC ¶50,701.

The taxpayer admitted during the CDP hearing that he inherited an interest in the property at issue upon his mother's death. As such, the IRS did not have to review state (Oklahoma) law to determine whether the taxpayer owned the requisite property interest. Moreover, federal lien procedures were appropriately followed, despite the absence of an advisory review.

J.D. Criner, 86 TCM 655, Dec. 55,362(M), TC Memo. 2003-328.

Relatives of delinquent married taxpayers who claimed to own the townhouse where the taxpayers lived were mere nominee owners. Therefore, a federal tax lien on the home resulting from the delinquent tax liability of the taxpayers was valid and the government could proceed with foreclosure.

R.F. Cody, DC Va., 2005-1 USTC ¶50,213.

The government was not entitled to foreclose on a federal tax lien attached to an individual's residence, which the taxpayer held with his spouse as tenants by the entireties. The court had insufficient information to determine whether the taxpayer had other assets available to satisfy the lien or to cushion the nondebtor spouse's dislocation costs. Moreover, there was insufficient evidence for the court to adjudicate the relative equities between the taxpayer and the nondebtor spouse regarding the residence. Since the government failed to present specific evidence for the court to determine the merits of all the claims to and liens upon the property it was not entitled to foreclose on the lien.

J.A. Frein, DC Fla., 2005-1 USTC ¶50,253.

The Bankruptcy Court upheld the trustee's motion for turnover of the debtor's home, and denied the debtor's motion to compel abandonment of the property, where the debtor claimed that the total tax liens against his home far exceed its value. The court held that the turnover order would facilitate an expeditious sale of the property and provide unsecured creditors with significant benefits.

D.M. Bolden, BC-DC Calif., 2005-2 USTC ¶50,443.

The taxpayer's conveyance of land to his mother was not fraudulent and he was not the nominee or alter ego of a trust. The taxpayer purchased the land as his mother's agent with proceeds from the sale of land originally owned by his mother. Then, after conveyance from the taxpayer, the mother subsequently placed the property in a trust and named the taxpayer as a trustee and beneficiary of the trust. Since the trust was established by another person using another person's assets, the trust was not considered the taxpayer's alter ego merely because of his position as trustee and beneficiary.

H.E. Greer, DC N.C., 2005-2 USTC ¶50,559.

The IRS could foreclose on a couple's real property because the couple did not timely file responses to interrogatories. The couple had agreed to an entry of judgment against them if they failed to meet an extended discovery deadline. The IRS was also entitled to summary judgment in its foreclosure action because the tax liens were based on amounts reported in the couple's returns. An assertion that the wife intended to amend one of her returns did not change the validity of the tax liens.

A.S. Roberts, DC Ala., 2005-2 USTC ¶.

A federal district court's decision allowing the IRS to attach a nominee federal tax lien to property owned by an ex-spouse of a delinquent taxpayer was vacated because it was not clear that the ex-spouse held the property as a mere nominee and that her former husband was the true beneficial owner under state (Kentucky) property law. At the time the lien arose, the former husband had not lived in the home or derived any beneficial interest related to the home for more than fourteen months. The case was remanded to determine under state law whether the former husband had any property interest in the home and, if so, to what extent the lien attached.

P.A.S. Spotts, CA-6, 2005-2 USTC ¶50,643, vac'g and rem'g DC Ky., 2004-2 USTC ¶50,367.

Genuine issues of material fact existed regarding the nature of a conveyance of property subject to a tax lien to an individual by her ex-husband. The IRS produced evidence suggesting that the wife was an active participant, along with her ex-husband, in a tax-avoidance scheme. Further, her ex-husband testified that one of the reasons the house was titled in her name was to protect the property from his creditors. Finally, the assignment and release of a sham mortgage raised questions about the legitimacy of the entire sequence of events surrounding the purchase of the house. Therefore, quiet title was not granted to the wife.

P. Spotts, DC Ky., 2006-2 USTC ¶50,561.

The IRS was entitled to foreclose on real property owned by two individuals in order to satisfy tax liens arising from their unpaid federal tax liabilities. The district court had previously entered a default judgment against the taxpayers and the trustee of a trust that held title to the property pursuant to a sham transfer intended to defraud the United States. The taxpayers were ordered to vacate the property, and the IRS was authorized to proceed with the foreclosure.

J. Verni, DC Calif., 2006-1 USTC ¶50,265.

The IRS's tax lien against real property held by a company that purchased the property by warranty deed was valid, even though the seller held an unrecorded deed of trust securing the warranty deed that was executed prior to the lien and a state (Tennessee) court had declared the warranty deed void. The company had sufficient interest in the property for the lien to attach since it had the power to convey the property and the property was free from all encumbrances at the time of the lien attachment.

Gatlinburg Airport Authority, Inc., DC Tenn., 2007-2 USTC ¶50,643.

A federal district court's decision refusing to foreclose a federal tax lien against property held by alleged nominees of a delinquent taxpayer was vacated and remanded. The district court erroneously held that the transfer of legal title from the husband to the wife was a requirement for enforcement of a nominee lien against her interest in the property. However, since the wife met the five factors required for nominee status, actual transfer of legal title of the property was not essential to the enforcement of the lien. In addition, the district court failed to determine whether the husband had any interest in the property under state (Utah) law and, if so, whether the lien could be enforced against that interest as a matter of federal law.

D.M. Holman, CA-10, 2007-2 USTC ¶50,734.

The IRS was entitled to reduce a married couple's tax liability to judgment and foreclose on federal tax liens. Moreover, the couple's homestead declaration could not prevent the tax lien foreclosure. Although the couple's bankruptcy discharge relieved them of their personal liability for some of the years at issue, it did not exempt their property from the federal tax liens.

S.A. Berk, DC Mass., 2007-2 USTC ¶50,757.

The government was entitled to foreclose its tax liens on a tax protestor's interest in residential property owned by him and his wife as tenants by the entirety. The taxpayer's interest in the tenancy constituted "property" or "rights to property" within the meaning of Code Sec. 6321. However, because it was not clear whether the wife engaged in a fraudulent conveyance of the property, what her percent interest in the property was, or the extent to which she would be prejudiced by the forced sale, these issues were left for determination at trial.

M.D. Miller, DC Ind., 2008-1 USTC ¶50,148.

The government was entitled to foreclose its tax liens on a married couple's real property and to sell that property at auction. The government established the amount of the couple's tax liability and that the liens securing those liabilities attached to all of the couple's property.

W.V. Marlatt, DC Ore., 2008-2 USTC ¶50,496.

The government was entitled to foreclose federal tax liens against a trustee's property interests in two parcels of real property in order to recoup taxes owed by him. The trustee's transfer of his rights in the property to his wife pursuant to their divorce did not affect the government's right to foreclose because the wife took the property subject to the taxes assessed against her husband, prior to the date of that transfer. Under the terms of the trust, the individual held an equitable right to the property as a beneficiary, and thereafter, held legal title to the property as a trustee. Additionally, under the state (Illinois) law, the individual, as a beneficiary, could alienate, assign or transfer his interest and could also sell or mortgage it. Hence, his equitable interest qualified as property under federal law. Any liens the government had pertaining to the taxes assessed, attached to the property on the day the assessments were made, and not upon the filing of the notices of federal tax liens.

R.F. Schaudt, DC Ill., 2008-2 USTC ¶50,609.

The government was denied summary judgment in its action to foreclose federal tax liens against real property. While the government presented sufficient facts to support its theory that the corporation that held title to the property was an alter ego of a married couple who owed taxes, disputed facts existed regarding whether the corporation paid adequate compensation for the property and whether the couple paid adequate rent to the corporation. Although the corporation could be considered a sham because it was not capitalized, and corporate formalities were disregarded, a reasonable fact finder could conclude that the corporation's president compensated the couple for the property and that the couple paid at least some rent.

Northern States Investment, Inc., DC Ill., 2009-1 USTC ¶50,132.

Foreclosure. --Action to Enforce Lien or to Subject Property to Payment of Tax: Foreclosure

An act approved March 4, 1931, gives the United States, where it owns a prior lien on real estate, authority to ask for affirmative relief in the form of foreclosure of its lien, and the right to bid at the sale up to the amount of its claim and expenses of sale.

Statute of March 4, 1931, Public No. 862, 71st Congress.

The government was not entitled to summary relief in an action to foreclose a tax lien against a surety bond. Although the agreement secured by the bond had come to an end, there was a triable issue of material fact as to whether any claims against the bond might exist.

Blue Ribbon Products Corp., DC, 66-2 USTC ¶9594.

The Government, having valid and subsisting liens on property and rights to property belonging to or owned by the taxpayers, was entitled to have its federal tax liens foreclosed on such property.

L.T. Anderson, DC, 65-2 USTC ¶9638.

J. Platon, DC, 66-1 USTC ¶9292.

G.E. Trager, DC, 72-1 USTC ¶9133, 53 FRD 654.

E.R. Hicks, DC, 72-2 USTC ¶9611.

A.J. Farinella, DC, 74-2 USTC ¶9749.

San Antonio Savings Assn., DC Tex., 86-2 USTC ¶9665.

C.F. Martin, DC Tex., 88-1 USTC ¶9215.

S.A. Stemm, DC Fla., 97-2 USTC ¶50,838. Aff'd, per curiam, CA-11 (unpublished opinion), 98-2 USTC ¶50,636.

G. Labato, DC Fla., 97-2 USTC ¶50,922. Aff'd, per curiam, CA-11 (unpublished opinion), 98-2 USTC ¶50,817.

M.K. Turner, DC Hawaii, 2000-2 USTC ¶50,815.

F.C. Tapp, DC Tex., 2001-1 USTC ¶50,427.

W.M. Arnold, DC Fla., 2001-2 USTC ¶50,605. Aff'd on specific properties foreclosed, DC Fla., 2002-1 USTC ¶50,300.

R.W. Olsen, DC Wis., 2001-2 USTC ¶50,736.

C.D. Schaut, DC Ill., 2002-1 USTC ¶50,184.

J. Delano, DC Colo., 2002-1 USTC ¶50,229. Aff'd, after motion to reconsider, DC Colo., 2002-1 USTC ¶50,261.

S.C. Burdine, DC Wash., 2002-2 USTC ¶50,560, 205 FSupp2d 1175.

J.M. Bannister, DC Wis., 2002-2 USTC ¶50,706.

The transfer of real property by the taxpayer to a trust of which she was trustee, without consideration, was a fraudulent conveyance under Minnesota law. Thus, the conveyance was set aside and the government's lien on the property was enforceable despite the conveyance.

M.A. Wurdemann, DC, 81-1 USTC ¶9353. Aff'd, per curiam, CA-8, 81-2 USTC ¶9757, 663 F2d 50.

Similarly.

Indiana National Bank, DC Ill., 84-2 USTC ¶9884.

W.H. Schroeder, DC Ill., 85-2 USTC ¶9709.

I.R. Hoffman, DC Wis., 86-2 USTC ¶9733, 634 FSupp 346.

W.E. Drexler, Sr., DC Okla., 87-2 USTC ¶9493.

J.A. Course, DC Ill, 87-2 USTC ¶9553.

A. Langrehr, DC Neb., 2001-1 USTC ¶50,253. Aff'd, per curiam, CA-8 (unpublished opinion), 2001-2 USTC ¶50,697.

L.D. Wight, DC Calif., 2002-1 USTC ¶50,287.

P. Labato, DC Fla., 2002-2 USTC ¶50,541.

E.G. Novotny, DC Colo., 2002-2 USTC ¶50,637. Aff'd, CA-10 (unpublished opinion), 2003-2 USTC ¶50,639.

D. Cook, DC Calif. 2003-1 USTC ¶50,242.

The taxpayer's undivided one-half interest in community property was subject to tax liens, and those liens could be enforced by foreclosure against assets of the community.

J.A. Overman, CA-9, 70-1 USTC ¶9342, 424 F2d 1142.

Followed.

American Business Machines, Inc., BC-DC, 80-2 USTC ¶9684.

A taxpayer's undivided one-half interest in community property was subject to tax liens, and those liens could be enforced by foreclosure against assets of the community. However, the government may not receive from its liens more than one half of the value of the community estate.

L. Ackerman II, CA-9, 70-1 USTC ¶9343, 424 F2d 1148.

Where the government served notice of levy, compelled transfer of legal title to itself and exercised the rights of an owner to control the property so that the taxpayer justly concluded that he had no further right to deal with the property, there was an effective levy. Thus, the taxpayer was entitled to a credit against his tax liability reflecting the value of the property at the time it should have been sold by the government following its seizure.

H. Pittman, CA-7, 71-2 USTC ¶9650, 449 F2d 623.

Foreclosure was denied on a residence held in joint tenancy by the taxpayer and his wife, where the Kansas homestead exemption precluded taking the wife's interest.

R.H. Hershberger, CA-10, 73-1 USTC ¶9289, 475 F2d 677.

Since a taxpayer failed to pay valid assessments, federal tax liens arose and attached to the taxpayer's property and to his rights to property and could be foreclosed.

T.A. Brown, DC, 76-1 USTC ¶9162.

The Court did not have jurisdiction to set aside a prior judicial sale of property under a lien foreclosure in the absence of a charge of fraud or a showing that the sales price was so inadequate as to amount to fraud, nor did the Oregon Homestead Act exempt the property from foreclosure.

J.F. Howard, DC, 69-1 USTC ¶9157, 296 FSupp 264.

Conveyance of a one-half interest in stock of a corporation to the delinquent taxpayer's wife was done with intent to defraud creditors; accordingly, the government was entitled to a judgment against the wife for her share of a liquidation distribution made by the corporation. In addition, the government was entitled to have its judgments satisfied through judicial sale of property owned by both the taxpayer and his wife.

E. Einhorn, DC, 69-1 USTC ¶9283.

The government was entitled to foreclose its tax liens on the property of the delinquent taxpayer. The conveyance of certain real property by the taxpayer and his wife to themselves as tenants by the entirety was made with the actual intent to defraud creditors and was, therefore, null and void.

W.C. Briggs, DC, 76-2 USTC ¶9543.

Similarly, where the property was conveyed prior to assessment. The taxpayers knew at the time of the transfer that they were in severe financial difficulty. Since the IRS was deemed to be a creditor from the date the obligation to pay taxes accrued, rather than from the date the assessment was made, the tax liens filed against the taxpayers and their transferees as nominees for the taxpayers were valid and could be foreclosed.

U. Freudenberg, DC Tenn., 99-2 USTC ¶50,623.

The government was entitled to foreclose its tax liens on a residence held in joint tenancy by the taxpayer and his wife even though the wife held a present property interest in the homestead under Iowa law. The buyer at the foreclosure sale, however, would take the foreclosed interest in the property subject to any rights that existed under state law on homesteads.

L.E. Musselman, DC, 81-2 USTC ¶9750.

For failure to make service on any named defendant, the court dismissed the government's action to foreclose a tax lien and to temporarily enjoin the distribution of funds deposited into court.

Capital Goods Supply & Leasing, DC, 73-1 USTC ¶9407.

The government's motion for reconsideration of the court's partial foreclosure of a tax lien was denied. The court concluded that it could exercise flexibility in fashioning its decree and that it had acted within its discretion in refusing to foreclose to the full extent of the taxpayer's property right.

H.H. Russell, DC, 75-1 USTC ¶9272. Motion for reconsideration denied, DC, 78-1 USTC ¶9333.

The government could foreclose its tax liens against a certain parcel of real estate despite the fact that the taxpayer had conveyed the reality by quitclaim deed to his wife. The taxpayer was found to have retained a two-thirds interest in the real property. The deed he gave his wife did not transfer his entire interest because two-thirds belonged to his minor son for whom the taxpayer was guardian.

H.T. Teti, DC, 75-2 USTC ¶9709.

Federal tax liens attaching to the home of the delinquent taxpayer were valid and had priority over any other lien. Taxpayer's wife could not block the sale of the house under state (Montana) homestead provisions since such provisions are merely exemption provisions and create no independent property interest.

G.E. Myers, Jr., DC, 76-2 USTC ¶9534.

The widow of a corporate officer who had failed to pay over withholding and FICA taxes from the wages of the corporation's employees did not have standing to contest the taxes assessed against her deceased husband. The husband's conveyance of the family residence without consideration to his wife prior to his death was constructively fraudulent because his widow failed to show that he had sufficient property remaining to pay his debts at the time the conveyance was executed. Thus, the husband's estate was indebted to the government in the amount of the tax lien and the family residence could be used to satisfy the government's claim.

L.C. Brown, DC, 81-2 USTC ¶9649.

A corporation that purportedly assigned its right to redeem real property from a tax sale purchaser to its president remained the owner. Because redemption rights may not be assigned, the president had no right to exercise the redemption privilege on his own behalf. Although the tax sale purchaser received a certificate of sale from the government, no deed was issued because of the purported redemption. Thus, title to the property remained where it was before the tax sale and, since the property was encumbered by unsatisfied tax liens, it was subject to IRS foreclosure.

Cassel Brothers, Inc., DC, 82-1 USTC ¶9189.

A federal district court may order the sale of a family home in which a delinquent taxpayer had an interest at the time that the tax indebtedness was incurred, or, in the exercise of its limited equitable discretion, it may decide not to order a sale. A spouse's separate homestead right (under state law) does not bar judicial sale, but it must be considered in determining the distribution of sale proceeds. A non-delinquent spouse is entitled to the portion of the proceeds that represents complete compensation for the loss of the homestead estate.

L.M.B. Rodgers, SCt, 83-1 USTC ¶9374, 103 SCt 2132.

Followed.

R.C. Gibson, CA-9, 87-2 USTC ¶9494.

R.P. Bachman, DC Iowa, 84-1 USTC ¶9390, 584 FSupp 1002, on remand from CA-8, 83-2 USTC ¶9450, 710 F2d 484..

W. Thomassen, DC Neb., 85-1 USTC ¶9325, 610 FSupp 386.

L. Wilson, DC Mich., 2003-1 USTC ¶50,153.

Similarly.

M. Dieter, DC Minn., 2003-1 USTC ¶50,439

The court of appeals ordered the cases of United States v. Rodgers, 81-2 USTC ¶9536, and Ingram v. United States, 81-2 USTC ¶9533 remanded to the district court for further proceedings consistent with the opinion of the United States Supreme Court ( 83-1 USTC ¶9374).

City of Dallas Department of Housing & Urban Rehabilitation, CA-5, 83-2 USTC ¶9572.

The government was entitled to reduce its lien on the property of a doctor who owed employment and income taxes to judgment. Although the doctor claimed that a forced sale would unduly burden his co-tenants, the federal district court could not exercise its limited discretion to decline to order the sale since the co-tenants did not assert a separate interest in the property.

J.C. Alden, DC Calif., 94-2 USTC ¶50,610. Aff'd, CA-9 (unpublished opinion), 97-2 USTC ¶50,604.

Neither the assets nor the stock of a family farm corporation could be sold in order to enforce a tax lien against one of the company's shareholders. The U.S. Supreme Court's decision in L.M.B. Rodgers, 83-1 USTC ¶9374, above, did not support the treatment of the shareholder's interest as an undivided interest in all of the company's outstanding stock that would permit the sale of the company's property and distribution of the proceeds. Moreover, the IRS failed to name the other shareholders as parties to the suit. In addition, the court could not order the sale of a percentage of the corporation's assets that represented the taxpayer's percentage of the total shares because, under state (Ohio) law, stock ownership does not create a property interest in corporate assets.

D.J. Miller, DC Ohio, 96-2 USTC ¶50,445.

The government could not force a sale of a married couple's home in order to satisfy its valid tax lien against the husband's property interest. Since the wife's interest was held as a tenant by the entirety, she had sufficient legal basis to expect that the property would not be disturbed by her husband's creditors. Also, half of the property's market value would not fully compensate the wife because she could become the sole owner by right of survivorship. Therefore, the government and the wife became tenants in common, the wife was ordered to pay the government half of the property's rental value, and the rental payments were credited against the unpaid amount of the judgment against the husband.

H.C. Jones, DC N.J., 95-1 USTC ¶50,190, 877 FSupp 907. Aff'd, CA-3, 96-1 USTC ¶50,056.

A husband's conveyance to his wife of his interest in the family home was set aside under Colorado's fraudulent conveyance statute, and the federal tax liens upon the property were foreclosed. The wife had paid her husband nothing in consideration of the transfer, and the husband became insolvent immediately after the transfer. A finding was made that the couple intended to hinder and delay their creditors generally, and the IRS in particular, by the conveyance. Also, the wife knew her husband was unemployed and that he was transferring to her the only asset with which he could hope to satisfy the just demands of his creditors.

J.E. Morgan, DC, 83-2 USTC ¶9535.

A taxpayer's wife was denied injunctive relief for wrongful levy where the tax lien for her husband's tax liability arising before they were married attached to a condominium which she held in joint tenancy with her husband. Although a non-taxpayer's property interest may be afforded certain protections when the government seeks to enforce its lien, a non-taxpayer cannot prevent attachment of the federal tax lien or a subsequent sale of a property to enforce such a lien.

M. Sato, DC, 84-1 USTC ¶9102, 579 FSupp 1170.

Tax liens representing a husband's liability were not valid against real property that he had transferred to his wife. The conveyance was not fraudulent under Connecticut law. The husband was not rendered insolvent by the transfer because his assets exceeded his liabilities both before and after the transfer.

C. Edwards, DC, 83-2 USTC ¶9719, 572 FSupp 1527.

The government was entitled to foreclose a federal tax and judgment lien on real property that was held in the name of the taxpayer's daughter. Other real property conveyed to the taxpayer's son and subsequently to his daughter with the intent to defraud creditors, including the United States, was exchanged for the property in question. The taxpayer's wife was not entitled to a homestead exemption after first fraudulently arguing that she had rented the property with her husband.

B.J. Chapman, CA-5, 85-1 USTC ¶9337, 756 F2d 1237.

Where the government served a notice of levy on the bankrupt taxpayer's debtor for an account receivable, caused notice of seizure of the account receivable to be served on the taxpayer and entered into a payment agreement with the taxpayer's debtor for the account receivable rather than selling it as required under Code Sec. 6335(b) and (d), the U.S. exercised control over the property and there was an effective levy. Thus, even though the taxpayer's debtor defaulted after making only one payment to the IRS under the payment agreement, only the taxpayer's debtor was liable to the U.S. for the value of the property not surrendered plus interest from the date of levy.

Barlows, Inc., BC-DC, 84-1 USTC ¶9233, 36 BR 826. Aff'd, CA-4 (unpublished opinion 7/22/85).

A federal tax lien took priority over an ex-wife's interest in the marital residence (which was awarded her pursuant to a judgment of divorce). Because she acquired her interest in the residence in exchange for relinquishing her marital rights, the court held that she was not a purchaser.

The lower court did not undervalue the wife's one-half interest in the homestead, but used the joint-life tables to value the interest which took into account the concurrent use of the property by both the husband and the wife.

S.M. Harris, CA-5, 85-2 USTC ¶9511, 764 F2d 1126.

Followed, where the court of appeals reversed and remanded to the lower court for redetermination the value of a wife's homestead interest in marital property because the lower court overvalued the wife's interest by failing to use the joint-life tables.

R. Molina, CA-5, 85-2 USTC ¶9510.

The foreclosure of a mortgage lien by a sheriff's sale under Pennsylvania law effectively extinguished a junior United States tax lien. The sheriff's sale was not considered as being a suit against the United States requiring consent.

W.J. Brosnan, SCt, 60-2 USTC ¶9516, 363 US 237.

Similarly. Foreclosure of tax liens denied.

P. Meyer, DC, 61-2 USTC ¶9747, 199 FSupp 508.

To the contrary, where the tax lien is senior to the mortgage lien.

R.C. Peterson, DC, 62-1 USTC ¶9445, 204 FSupp 683.

Distinguished, where enforcement proceedings predated initiation of lender's foreclosure action.

D.A. Hawkins, DC Wash., 99-1 USTC ¶50,383.

An "open-end" mortgage securing an original loan and all other indebtedness due did not secure three later loans. Thus, the government was entitled by tax lien to the proceeds of the foreclosure sale of the mortgaged realty that remained after paying the unpaid balance of the original loan, interest, taxes and sale expenses.

Automatic Heating & Equipment Co., DC, 60-1 USTC ¶9376, 181 FSupp 924. Aff'd by order, CA-6, 61-1 USTC ¶9280, 287 F2d 885.

A mortgage on property that was entitled to priority over the Government's lien for taxes did not lose its status as such when personal liability on a note for which the mortgage was given as security was released since the right to enforce the mortgage was not relinquished. Therefore, the purchaser at a foreclosure sale of the property was entitled to have the Government's lien cancelled.

Miners Savings Bank of Pittston, Pa., DC, 53-1 USTC ¶9222, 110 FSupp 563.

At the time that a plaintiff filed a foreclosure action based on a first mortgage lien on real property, the government had a lien on, and not title to, the property, notwithstanding the government's seizure and sale under 1954 Code Sec. 6331. A deed from a District Director to the government did not remove the jurisdiction of the court as to deciding the equities involved.

Waldoch, DC, 58-1 USTC ¶9291.

Even if the court had jurisdiction (which it did not), the sale of realty in partial satisfaction of transferee tax liability was valid.

Trustees of the Puritan Church, DC, 61-1 USTC ¶9135, 191 FSupp 670. Aff'd on the jurisdictional issue, CA-D.C., 61-2 USTC ¶9567, 294 F2d 735.

Sale of real properties subject to federal tax liens was ordered, the proceeds to be distributed according to the interests of the parties in the properties and the taxpayer's interest to be applied to liens according to priorities.

Fox, DC, 1931 CCH ¶9381, 52 F2d 794.

F. Folsom, DC, 61-1 USTC ¶9126.

D.E. Slater, DC, 61-1 USTC ¶9469.

McLaughlin Taylor Co., DC, 1927 CCH ¶7205.

Decker, DC, 62-1 USTC ¶9455.

J.A. Ashley, DC, 63-1 USTC ¶9384.

L.T. Anderson, DC, 66-2 USTC ¶9646.

E.E. Beasy, Sr., DC, 66-1 USTC ¶9236.

Title Ins. Co. of St. Louis, (St. Louis Court of Appeals) 68-2 USTC ¶9636.

J.L. Eshelman, DC Del., 87-2 USTC ¶9419, 663 FSupp 285.

H.L. Taylor, DC S.C., 2000-2 USTC ¶50,788. Aff'd, per curiam, CA-4 (unpublished opinion), 2001-1 USTC ¶50,343.

The taxpayer's conveyance of his one-half interest in residential real property to his daughters for no consideration was a fraudulent conveyance under West Virginia law. Thus, the court ordered the conveyance set aside and the property sold to satisfy a tax lien filed after the conveyance. Since the Tax Court determined that the taxpayer's spouse was an innocent spouse, the transfer of her one-half interest in the property to their children was effective, and the two daughters were entitled to one-half the proceeds from the sale of the property.

B. Brown, DC, 81-2 USTC ¶9481.

Although the Government had a lien against a delinquent taxpayer's undivided one-sixth interest in jointly-owned real estate, the Government had no right to force a sale of the entire properties in order to satisfy the lien, since under state law only the joint tenants are entitled to a partition or property in kind or to have the property sold and the proceeds divided.

J.E. Folsom, CA-5, 62-2 USTC ¶9648, 306 F2d 361.

To the contrary.

H. Trilling, CA-7, 64-1 USTC ¶9292, 328 F2d 699.

Folsom, above, does not apply when the nondelinquent joint tenant joins in the government's effort to have the property sold. The right not to have the entire property sold can only be raised by the nondelinquent co-owner.

F.B. Murphy, DC, 78-1 USTC ¶9299.

Where a wife received money from her insolvent husband-taxpayer, she could not be held personally liable as a fraudulent transferee for using his funds to pay his legitimate antecedent debts. When she did so, she merely acted as his agent. However, to the extent that she otherwise received funds from him and purchased a residence for them in her name, she could not avoid liability on the theory that he owed her an antecedent debt based on his marital obligation. She was not her husband's creditor. Avoidance of a foreclosure on the property, based on the minority view in J.E. Folsom, CA-5, 62-2 USTC ¶9648, also could not be condoned because Folsom is contrary to the weight of authority and the express language of section 7403, and both of the defendants benefited from the utilization of the non-paid taxes to acquire and maintain the subject residence. The equitable theories of laches and unclean hands were also unhelpful to the defendants because the government was asserting a sovereign right and it deferred acting on its claim against the wife only until the husband defaulted on two agreements to pay back taxes.

J.R. Mazzara, DC, 82-2 USTC ¶9423, 530 FSupp 1380.

The Connecticut residential real estate jointly owned by the taxpayer husband and his non-taxpayer wife could be sold in satisfaction of the federal tax lien upon property of the delinquent taxpayer husband. Government's motion for summary judgment was granted.

B. Mosolowitz, DC, 67-1 USTC ¶9350, 269 FSupp 12.

Similarly, as to property owned by a New York couple as tenants in common.

W. Kocher, CA-2, 72-2 USTC ¶9730, 468 F2d 503. Cert. denied, 411 US 931.

The lower court did not abuse its discretion in confining the sale to the taxpayer-husband's undivided one-half interest in property held in joint tenancy with his wife. The lower court in its sound discretion could have ordered the outright sale of the jointly held property or it could have refused to foreclose on the lien altogether.

J.C. Eaves, CA-10, 74-2 USTC ¶9526, 499 F2d 869.

Since title to real property was owned by taxpayer and his wife as tenants in common, the government, with a lien for unpaid taxes, could sell the property and account to the wife for her portion of the sales price.

B.H. Deal, Jr., DC, 74-2 USTC ¶9678.

It is not a jurisdictional prerequisite in a suit under section 2410 of the Judicial Code to quiet title to real estate from a Federal tax lien that the District Court order a foreclosure. The court may take whatever action is necessary to assure that the Government's lien is fully and effectually respected in accordance with its established rank.

O.E. Morrison, CA-5, 57-2 USTC ¶9801, 247 F2d 285.

W.W. Boyd, Jr., CA-5, 57-2 USTC ¶9791, 246 F2d 477.

In an action to foreclose a tax lien, there is no right to trial by jury.

B. Damsky, DC, 60-2 USTC ¶9721, 187 FSupp 404.

Similarly.

D.T. Stewart, DC Tex., 2003-1 USTC ¶50,261.

Petition to mandamus the District Court judge to vacate denial of jury trial was granted to the extent that the government's suit was for a money judgment only against the husband for taxes that only he owed, and was denied otherwise, CA-2 61-1 USTC ¶9351, 289 F2d 46.

E.F. Malakie, DC, 61-1 USTC ¶9117, 188 FSupp 592.

R.J. Rentz, DC, 63-1 USTC ¶9140, 213 FSupp 521.

A.R. George, DC, 64-1 USTC ¶9277.

S.J. Gefen, CA-5, 68-2 USTC ¶9552.

L.D.T. Corp., DC, 69-2 USTC ¶9451, 302 FSupp 990.

Foreclosure of federal tax liens and sale of property purchased by a good-faith buyer from a delinquent taxpayer were stayed pending completion of foreclosure and surplus money proceedings affecting other property owned by the delinquent taxpayer.

M. Pollack, DC, 64-2 USTC ¶9688, 233 FSupp 775.

Once the other foreclosure was completed, the Court ordered the foreclosure at issue to proceed.

M. Pollack, CA-2 67-1 USTC ¶9325.

Where a delinquent taxpayer transferred land to her daughter who then sold the property to a third party, the government could enforce a tax lien against the sale proceeds. Although the daughter claimed that enforcement of the lien should be stayed because her parents disputed their tax liability, the parents had exhausted their avenues of challenge to the deficiencies. Also, the equitable doctrines of inverse order of alienation and marshaling of assets, which would have required that the lien first be enforced against properties to which the parents retained title, did not apply to the government.

J.B. Muldavin, DC Mich., 98-1 USTC ¶50,408.

In exercising its equitable power, the court refused to foreclose on a piece of property pursuant to a tax lien that had been reduced to judgment against a husband because the court was persuaded that the property in question rightly belonged to his wife and that she had obtained and improved the property with her own funds and through her own effort.

J.L. Garsky, DC Wis., 86-2 USTC ¶9501.

A 50% interest in proceeds from the dissolution of a corporation could not be attached by the IRS in order to satisfy a default judgment for delinquent income taxes, penalties and interest issued against the deceased shareholder of a corporation. The evidence indicated that the taxpayer's wife was the sole owner of 50% of the outstanding shares of the corporation. Although the original stock certificate had been issued in the taxpayer's name alone, replacement certificates were issued in the taxpayer's wife's name prior to the default judgment. The taxpayer's name was subsequently added to the replacement certificates. The change of name on the certificates, in light of the fact that the stock had initially been paid for with joint funds, converted ownership of the stock from the taxpayer individually to the taxpayer and his wife as joint tenants with rights of survivorship. Upon the taxpayer's death, his wife became the sole owner of the stock, free from any tax liens that became effective against the taxpayer after the creation of the joint tenancy.

Tidal Equipment Co., Inc., DC Del., 86-2 USTC ¶9538, 623 FSupp 933.

A transfer of a residence by a husband and wife against whom deficiencies had been assessed was null and void because it was made for the purpose of hindering the collection of tax. The transferee, the taxpayers' daughter, did not purchase the property for a fair consideration. Thus, foreclosure on the property to satisfy the tax delinquencies was warranted.

Y.T. Taylor, DC Tex., 88-2 USTC ¶9394.

Income tax assessments were upheld in the amounts established by the government against a tax protestor. A voluntary conveyance of property from the protestor to his son, which was made without consideration at the time the protestor was indebted to the government, impaired the rights of his creditors and was fraudulent. Federal tax liens on the fraudulently conveyed property were ordered foreclosed.

People of the United States of America, DC Ill., 87-2 USTC ¶9553.

The Kansas second foreclosure statute, which protects real estate once foreclosed upon from subsequent attachment by creditors, did not bar an attempt by the U.S. to foreclose on the property.

R.C. Jones, DC Kan., 89-2 USTC ¶9411.

An individual's conveyance of a real property interest to his common-law wife was set aside as fraudulent and the property was sold to satisfy tax liens.

D.W. Freeman, DC W.Va., 89-1 USTC ¶9127. Aff'd, CA-4 (unpublished opinion 1/11/90).

Proceeds from the sale of certain real property could be used to satisfy a judgment because the taxpayer had an interest in this property when the tax liens arose. A divorce decree did not divest the taxpayer of his interest in the property, and he held a one-half interest in it at the time the IRS filed its notice of tax lien. Judgment was entered against the taxpayer's ex-wife as to her claimed right to the proceeds from the sale of the property.

S.H. Ray, Jr., DC Ohio, 90-2 USTC ¶50,415.

The amount of a tax assessment against an individual was upheld. The IRS's motion for a forced sale of all real property was denied, however. The individual and his wife were equal owners in the subject real property, but the tax liens attached only to the husband's interest in the property. Foreclosure and sale were limited to the husband's interest in the property.

G.D. Sellner, DC Mont., 90-2 USTC ¶50,452.

The U.S. was granted judgment foreclosing its tax liens on fraudulently conveyed property and was authorized to sell such property to satisfy tax liens and additions to tax.

E.D. Christensen, DC Utah, 90-2 USTC ¶50,543, 751 FSupp 1532. Dism'd, CA-10 (unpublished opinion) 4/8/92.

The statute of limitations to foreclose a lien for taxes had not expired. The taxpayer did not show the existence of a tenancy in the entirety as to certain real estate so as to defeat an IRS lien on the property. The court was justified in ordering foreclosure of the IRS lien because no special equitable factors existed that would render the foreclosure overwhelmingly unjust to the taxpayer's wife. Finally, the real estate was not exempt from foreclosure as the taxpayer's principal residence. Although an exemption from foreclosure of a principal residence exists where the IRS is seeking a levy of the property, the exemption does not exist in the case for the judicial enforcement of an IRS lien through a court-ordered foreclosure.

R.L. Scharf, DC Mo., 91-1 USTC ¶50,205.

A tax lien against property conveyed to an irrevocable trust prior to the assessment of the taxes was foreclosed since the transfer was fraudulent under Utah state law.

M.E. Parks, DC Utah, 91-1 USTC ¶50,263.

An employer who ran a construction company from his home could not escape a lien on his house for unpaid federal employment taxes by transferring ownership of the house to his wife. The federal government was empowered to enforce the tax lien despite a state homestead exemption from ordinary creditors by virtue of the Supremacy Clause of the U.S. Constitution. The power to enforce tax liens when property is jointly held by a delinquent taxpayer and a non-liable third party is limited under a four-factor test set forth in Rodgers (SCt, 83-1 USTC ¶9374). The lower court had focused solely on the possibility of undercompensation for the spouse in preventing foreclosure, but an analysis that accorded equal weight to all four factors justified imposing the lien despite the negative consequences to the spouse.

C. Bierbrauer, CA-8, 91-2 USTC ¶50,331, 936 F2d 373.

A transfer of property was set aside as a fraudulent transfer and the IRS could foreclose federal tax liens against the property.

B.G. Gosnell, CA-10, 92-2 USTC ¶50,368.

The IRS was allowed to foreclose a tax lien on real property that was owned by a married couple. The non-delinquent wife's homestead interest in the realty was no bar to the IRS's foreclosure sale of the property. Since the tax lien emanated from assessments made only against the husband for unpaid federal income taxes, the IRS was entitled to retain only that part of the proceeds from the sale which represented the husband's interest in the realty. The wife failed to demonstrate that her situation authorized the court to exercise its limited equitable discretion to disallow the forced sale.

C.A. Anderson, DC S.D., 91-2 USTC ¶50,468.

Purchasers of real property subject to a federal tax lien did not have a legally recognized expectation that the property would not be subject to a forced sale by the government. The lien attached to the property prior to purchase and notice of the lien was properly executed and recorded prior to the sale.

T.J. Bentley, DC Mo., 91-2 USTC ¶50,584.

Failure to join all parties in the chain of title who owned and transferred property did not warrant dismissal of the IRS's action to set aside fraudulent conveyances and foreclose tax liens on the property.

L. Scherping, DC Minn., 92-2 USTC ¶50,345.

The IRS could not foreclose a lien on property held by a third party under the state (Hawaii) fraudulent transfer statute. The action fell outside of the period established by the statute for bringing the claim.

G. Vellalos, DC Hawaii, 92-1 USTC ¶50,227. Aff'd and dismissed, CA-9 (unpublished opinion 3/19/93).

The government's action to foreclose tax liens on property was subject to the state (Washington) redemption rights of an individual who was the successor in interest to the judgment debtor.

D. Garcia, DC Wash., 92-1 USTC ¶50,038.

The IRS's request to foreclose a tax lien against an individual's undivided one-half interest in a house and to sell the entire property was denied. No lien was in effect against the other one-half interest held by the individual's elderly and infirm wife. Thus, she was an innocent third party and the possibility of harm to her from selling the house substantially outweighed any prejudice to the government from delaying the sale.

D.R. Jensen, DC Utah, 92-1 USTC ¶50,078, 785 FSupp 922.

To the contrary. Foreclosure sale was allowed where the wife failed to state a reason why her interest should be exempt from the forced sale and where the government would be severely hampered in its collection efforts if it attempted to sell only the husband's interest in the property.

B.J. Smith, DC Ala., 92-1 USTC ¶50,202.

The IRS could foreclose on a lien it had filed against an individual taxpayer's property because the taxpayer failed to rebut the presumption that the requisite notice and demand had been sent to him.

M.D. Smalley, DC Tenn., 93-1 USTC ¶50,111.

Judgment against the personal representative of a decedent's estate was entered for the unpaid balance of the decedent's income tax assessment. Foreclosure of federal tax liens upon property in the decedent's estate was ordered and the proceeds were applied against the decedent's tax liabilities. A valid tax lien also attached to property that had been transferred by the representative to his own estate for no consideration or money.

L. Grable, DC Mich., 93-1 USTC ¶50,063.

A married couple was found to have fraudulently conveyed substantially all of their assets in trust to their children in order to protect their assets from IRS foreclosure. Thus, the IRS's tax liens attached to all of the couple's real and personal property that was acquired both prior and subsequent to the tax liens, and the government could proceed with foreclosure of the liens.

K. Bryant, CA-8, 94-1 USTC ¶50,057, 15 F3d 756.

The government was entitled to foreclose its liens on the residence of a delinquent taxpayer in satisfaction of his tax liabilities even though the property was purportedly transferred to his son and stepson. Since the transfer occurred after the issuance of assessments, the transferees acquired their interest in the property subject to the government's tax lien. In addition, since no consideration was paid, the transferees could not be treated as bona fide purchasers. Further, the transfer was a fraudulent conveyance under state (Florida) law.

T.E. O'Day, DC Fla., 97-1 USTC ¶50,250.

An individual who served as president, chief executive officer, chief financial officer, and one of two directors of a corporation was liable for penalties resulting from his willful failure to collect, truthfully account for and pay over the withholding and FICA taxes of the corporation's employees for the quarters at issue. The federal tax lien on the taxpayer's residence was foreclosed and the residence was sold to satisfy the tax assessment and other liens against the property.

J.C. Alkire, DC Calif., 93-2 USTC ¶50,450.

A federal tax lien that arose when an audit deficiency was assessed against a delinquent taxpayer had priority over the rights of a transferee of the taxpayer's oil and gas properties and was enforceable through a foreclosure sale of the transferred properties. Under state (Texas) law, the delinquent taxpayer had an interest in the mineral rights when the tax liens attached since the transfer deed had not yet been recorded. Similarly, stock owned by the taxpayer was subject to the tax liens because she did not transfer title in the shares until after the liens attached.

R.L. Huszagh, DC Ill., 94-1 USTC ¶50,147.

The government was entitled to foreclose a tax lien on property conveyed by a husband to his wife even though the assessment was made against the husband alone. Since the tax lien attached to the property when it was held by the couple as tenants by the entireties, any subsequent conveyance of a property interest to the wife was subject to the lien. The wife should not have had any real expectation that the property would have been shielded from foreclosure because, under state (Rhode Island) law, lien creditors of one spouse can force a sale once a tenancy in the entirety is terminated. However, the sale was delayed in order to provide the wife with sufficient time to obtain financing or to arrange for a sale on more favorable terms.

H.A. Brynes, DC R.I., 94-1 USTC ¶50,180.

In order to satisfy an individual's outstanding tax liabilities, the government could foreclose on and sell four properties that he owned and fraudulently transferred to others who quit claimed the properties to his son's corporation. Even if state (Indiana) law prevented the seizure and sale of one parcel that was owned by the individual and his wife as tenants by the entireties, the government could foreclose on the property since the wife would not be prejudiced. She was not residing on the property and had little interest in it. However, the wife was entitled to half of the sale proceeds derived from that property.

R.S. Waltman, DC Ind., 97-2 USTC ¶50,760.

Clarifying R.S. Waltman ( 97-2 USTC ¶50,760, above), a federal tax lien could not attach to real property owned by married taxpayers in a tenancy by the entireties in order to satisfy the tax liabilities of one spouse. State (Indiana) law created a unity of ownership that was not severable except upon consent of both parties. However, since the husband's subsequent transfer of his interest to his wife so that she could further convey the property was a fraudulent transfer, ownership reverted back to the couple and a sale of the property could be ordered to satisfy the husband's tax liabilities.

R.S. Waltman, DC Ind., 98-1 USTC ¶50,487.

The IRS was permitted to foreclose tax liens against an individual on an entire piece of property that she held with her sister as joint tenants with right of survivorship, because the government's ability to collect taxes would have been prejudiced by a partial sale. A sale of the entire property better insured fair compensation to the joint tenants, and they did not incur dislocation costs by the sale. Further, the sister had no legally recognized expectation that she had a separate property interest that could not be subject to a forced sale by the delinquent taxpayer or by the delinquent taxpayer's creditors.

T.S. Hopkins, DC W.Va., 94-1 USTC ¶50,244.

The government was entitled to reduce assessments of unpaid tax liabilities to judgment and to foreclose its tax liens on assets owned by an individual and held by a trust and by a receiver. The taxpayer offered no evidence to disprove the government's assertion that he owned the assets, and he had admitted ownership of the assets in prior proceedings in connection with his filing of a bankruptcy petition.

W. Werner, DC N.Y., 94-2 USTC ¶50,345.

Two individuals were not entitled to either a statutory or an equitable period of redemption following the government's foreclosure of its tax liens on property fraudulently transferred from one of the individuals to the other. No statutory right of redemption existed because the government brought a judicial foreclosure action. Equitable relief was also barred by the clean hands doctrine since the property had been transferred with the intent to delay, hinder, or defraud the United States and the transferor had failed to pay federal income taxes.

K.T. Kilgore, DC Kan., 94-2 USTC ¶50,378.

The government was entitled to foreclose its tax lien against real property in which a delinquent taxpayer held a beneficial interest, subject only to a financial institution's prior perfected security interest in the property. An earlier transfer of the property by the taxpayer to a third party was set aside because it had been made with the intent to delay, hinder or defraud the government.

K.T. Kilgore, DC Kan., 95-1 USTC ¶50,099.

The government was entitled to a judgment of foreclosure and sale of one parcel of real property because it had a valid tax lien on the property and the owner did not assert that any other party owned an interest. However, the government was unable to foreclose on another individual's parcel because it did not address the issue of whether the individual's wife had a homestead interest in the property. The government also was unable to foreclose on parcels owned by the two individuals' corporation because it did not raise, in the pretrial order, the issue of piercing the corporate veil in order to treat the individuals as the actual owners of the corporation's property or the issue of selling their stock in the corporation.

H.L. Pottorf, DC Kan., 95-1 USTC ¶50,205, 881 FSupp 482.

The government was granted its motion for partial summary judgment allowing it to foreclose on tax liens on an individual's farm property despite a homestead interest in the property that was held by the individual's nonliable spouse. The individual failed to contest the motion, and the motion appeared meritorious on its face. The government's financial interest would have been severely prejudiced by a sale of only the liable spouse's interest. Further, although the state (Kansas) law provided broad protection of a homestead from a forced sale, the homestead interest of a nonliable spouse could be discharged by adequate compensation.

H.L. Pottorf, DC Kan., 95-2 USTC ¶50,502.

The IRS's motion for summary judgment to foreclose tax liens on an individual's real property was denied because issues of material fact existed regarding whether the individual fraudulently conveyed the property to a third party. The individual's transfer of stock to his four children may have been a gift, rather than actually fraudulent. Thus, his intent could not be determined on summary judgment. Finally, the government could not foreclose upon, and sell in their entirety, two properties in which the individual held partial interests because there was insufficient information to evaluate the impact of a forced sale on all parties.

A. DiGiulio, DC N.Y., 97-2 USTC ¶50,987.

The IRS's action seeking the foreclosure and sale of two residential properties in order to satisfy the tax liabilities of married taxpayers was dismissed without prejudice since the amount of the remaining unpaid tax liabilities was relatively modest when compared to the properties' value. The forced sale would have been inappropriate given the amount left at issue, and the taxpayers agreed to pay the remaining amount with interest.

R. Snyder, DC Pa., 98-2 USTC ¶50,643.

The Tax Injunction Act, 28 U.S.C. §1341, did not bar the government's action to foreclose federal tax liens against property that was also subject to state (Pennsylvania) tax liens. The foreclosure suit did not qualify as an attempt to enjoin, suspend or restrain the state's assessment and collection action, or to use an injunction or a declaratory judgment to deprive the state of any interest it had in the taxpayer's property.

R&E Corp., DC Pa., 99-2 USTC ¶50,813.

The foreclosure of an IRS judgment against real property owned by a delinquent church association was stayed pending the taxpayer's appeal of the judgment. The taxpayer could not obtain a supersedeas bond without endangering its financial stability, and the stay did not threaten the government's security interest in the taxpayer's property.

Indianapolis Baptist Temple, DC Ind., 99-2 USTC ¶51,004.

In a subsequent hearing, the church was ordered to vacate real estate foreclosed in a prior proceeding to collect delinquent federal employment tax. Its contention that the government would not suffer any harm were the enforcement of the judgment delayed while it sought Supreme Court review was rejected. The church merely repeated tax arguments that had been rejected in previous proceedings, namely that complying with tax laws would unconstitutionally force it to recognize the sovereignty of the federal government over its religious principles.

Indianapolis Baptist Temple, DC Ind. (unpublished opinion), 2000-2 USTC ¶50,764.

The government's request to foreclose on real estate to satisfy tax liens that had been assessed against an individual for failure to pay employment and unemployment tax was granted. Although the taxpayer conveyed the property to a trust, the tax liens had attached to the property when the notices of the liens were filed with the Register of Deeds. A subsequent transfer of the property after attachment did not extinguish the liens; the taxpayer transferred the real estate to the trust encumbered with the tax liens.

D.C. Stubb, DC Wis., 2000-2 USTC ¶50,573.

Married joint tenants were ordered to sell their residence to satisfy the tax debts of the husband in an action by the government to enforce a tax lien. The government's interests would have been prejudiced if it were only permitted to sell the husband's one-half interest in the property because such an interest would have little market value. Sale of the entire property did not substantially prejudice the wife because she received funds sufficient to obtain a house of the same quality.

W.J. Casey, DC Calif., 2000-2 USTC ¶50,816.

A federal district court did not grant the government's motion for summary judgment on its claim to have fraudulent conveyances set aside and on its request for foreclosure on federal tax liens that attached to the properties held by two trusts that were the nominees/alter egos of a married couple. Significant disputes existed between the parties as to the factual and procedural histories relevant to the government's claims.

J. Engels, DC Iowa, 2001-2 USTC ¶50,723.

After a motion to amend, the grant of the government's motion to reduce tax assessments against a married couple to judgment was amended to a denial without prejudice. The taxpayers successfully argued that the court overlooked evidence showing that they disputed the presumption of correctness of the assessed taxes.

J. Engels, DC Iowa, 2002-1 USTC ¶50,306.

The government was not entitled to foreclose its federal tax liens on a married couple's property that had been transferred to two trusts because it failed to demonstrate that the trusts were nominees of the taxpayers. Thus, the government's motion for summary judgment was denied. Moreover, the government's claim for summary judgment on its claim that the trusts were shams was denied. Genuine issues of material fact existed as to whether the husband continued to treat the seven parcels of property as his own after he transferred title to the trusts.

E.G. Novotny, DC Colo., 2002-1 USTC ¶50,147.

An individual trustee failed to satisfy the requirements for an injunction sought on behalf of a trust to halt the sale of real property subject to tax liens. The district court had already found that the taxpayer was the alter ego of the trust and, thus, his arguments that the trust's ownership of the property prevented a sale lacked merit. Additionally, the Anti-Injunction Act barred a suit by the trustee who failed to satisfy the requirements for an injunction.

Brandar Management Trust, DC Hawaii, 2002-1 USTC ¶50,308.

The government was entitled to summary judgment with respect to its suit to reduce to judgment an individual's personal tax liability with respect to four tax years, to establish the validity of tax liens on real property, and to foreclose the liens.

J.B. Peterson, DC Ohio, 2003-1 USTC ¶50,223.

The court declined to order a foreclosure on its tax liens against an individual. Because issues of material fact existed with respect to a possible fraudulent conveyance and to the marital status of the individual's alleged common law wife, no determination had been made as to whether various family members had a legally enforceable interest in the property subject to the lien.

R. Smith, DC Ohio, 2002-2 USTC ¶50,657.

A federal district bankruptcy court rejected a couple's valuation of property held as tenants by the entirety, as well as the IRS's valuation of such property. A valuation of the property was not dependent upon the market value of the property, rather it focused on the value of the property from the debtor's perspective. As a result, the court rejected the debtors' argument that the property had zero value, despite testimony that there would be a limited ability to sell only the husband's interest where the wife's interest in the property was not subject to the IRS's lien. Moreover, Code Sec. 7403 permits the IRS to sell the entire property to satisfy a lien obligation.

M.V. Basher, BC-DC Pa., 2003-1 USTC ¶50,426, 291 BR 357.

The government was entitled to foreclose upon real property owned by married taxpayers resulting from their unpaid income taxes, interest and penalties. The government's secured claim was not limited to the extent of the taxpayers' equity in the property at the time the lien attached. As a result, the tax liens attached to the appreciated value of the residence.

S.B. Doyle, DC Pa., 2003-2 USTC ¶50,619, 276 FSupp2d 415.

The government was entitled to summary judgment with respect to its suit to establish that federal tax liens attached to an individual's property, a holding trust was the alter ego of the taxpayer, and that foreclosure of the liens was proper. The government established that the trust paid inadequate consideration for real property that the taxpayer transferred to it; the taxpayer placed the property in the name of the trust in anticipation of suit, while he continued to exercise control over the property; there was a close relationship between the taxpayer and the trust; the taxpayer retained possession of the property; and the taxpayer continued to enjoy the benefits of the property. Moreover, the taxpayer refused to produce the trust instrument, although the real estate transactions were recorded. Because the trust was the alter ego of the taxpayer, the tax liens attached to all properties titled in the name of the trust.

B.S. Prather, Jr., DC Ohio, 2003-2 USTC ¶50,700.

The IRS could foreclose on farm properties that a divorced taxpayer held together with his third-party son where the son could not show why the foreclosure should not proceed. First, the son lacked a legal expectation that the properties would not be subject to a forced sale since he was not a bona fide purchaser of the properties. Second, foreclosure would not subject the son to hardship due to a forced dislocation since he did not live on the properties. Third, the son held a present fee interest so there was no complication in allocating the proceeds from the sale as there would be if the son held an interest contingent on the taxpayer's death. Fourth, the son's interest was equal to the taxpayer's and hence there was no inequity due to the son holding a disproportionately large share.

J.L. Padilla, DC Calif., 2005-1 USTC ¶50,134, 360 FSupp2d 760.

Foreclosure on a tract of real property was inappropriate because the taxpayer produced evidence that tended to show he purchased the land only as the agent for his mother, and that, at the time he transferred the property to her, he remained unaware of the tax deficiency asserted against him. The mother subsequently placed the property in a trust and named the taxpayer as a trustee and beneficiary of the trust. Under state law, the taxpayer was only entitled to 50.5 percent of the net income and corpus of the trust distributed at the discretion of the board of trustees. While the lien could attach to this income stream, foreclosure on the undistributed property was inappropriate unless the trust served as the taxpayer's alter ego. Since the trust was theoretically established by another person using another person's assets, the trust was not considered the taxpayer's alter ego merely because of his position as trustee and beneficiary.

H.E. Greer, DC N.C., 2005-1 USTC ¶50,234, 360 FSupp2d 760. Motion for reconsideration denied, 2005-1 USTC ¶50,433.

The IRS was entitled to foreclose on real property owned by two individuals in order to satisfy tax liens arising from their unpaid federal tax liabilities. The district court had previously entered a default judgment against the taxpayers and the trustee of a trust that held title to the property pursuant to a sham transfer intended to defraud the United States. The taxpayers were ordered to vacate the property, and the IRS was authorized to proceed with the foreclosure.

J. Verni, DC Calif., 2006-1 USTC ¶50,265.

Genuine issues of material fact remained regarding a decedent's liability for taxes and the merits of a cross-claim filed by a third-party purchaser of the decedent's real property that was subject to a federal tax lien. Therefore, foreclosure and judicial sale of the decedent's share in the real property were not granted until those issues relating to the property were resolved.

J. Doe, DC Ohio, 2006-1 USTC ¶50,295.

The government was entitled to foreclose and sell a tax debtor's marital residence and a bar he owned jointly with his wife in order to enforce a federal tax lien. The government has an overwhelming right to enforce tax liens and is not dependent on state (Montana) law that generally regulate creditors' rights. The Supremacy Clause provided the government with a means to sweep aside state-created exemptions against forced sale.

L. Sanders, DC Mont., 2006-2 USTC ¶50,385.

A husband's one-half interest in his home that he owned jointly with his wife could not be sold separately to satisfy his tax liability because the government's financial interests would be prejudiced if it were relegated to a forced sale of the partial interest, as opposed to the sale of the property as a whole. Thus, foreclosure and sale of the property as a whole was favored to satisfy the husband's tax debt.

B. Hanson, DC Minn., 2006-2 USTC ¶50,557.

Based on the four factors set forth in L.M.B. Rodgers ( 83-1 USTC ¶9374), the government was not allowed to foreclose on the entire property of a delinquent individual and his non-responsible ex-wife who each owned a one-half interest as tenants-in-common. Foreclosure would be an extremely inequitable and offensive result. It would displace an unemployed, disabled woman of modest and limited means who had lived on the property for 16 years. Moreover, the taxes at issue were the sole obligation of her ex-husband, from whom she had been divorced for 14 years and who did not reside on the property and would be relatively unaffected by the foreclosure.

W.F. Johns, DC Fla., 2007-1 USTC ¶50,316.

The government was entitled to enforcement of a lien against a married couple's property. The IRS's determination was presumed correct and the certificates of assessments established a prima facie case of liability on the part of the couple. They failed to offer evidence to show that the assessments were made in error. They merely pursued frivolous legal arguments that have been consistently and universally rejected by every federal court that has considered them. Thus, the couple failed to raise any genuine issue of material fact regarding the propriety of the tax assessments and statutory additions.

H.D. Goltz, DC Tex., 2007-1 USTC ¶50,360.

The government was not required to pay to other parties funds received through from a settlement with a married couple prior to the sale of the couple's foreclosed property. The other parties, who had interests in the foreclosed property, sought to compel the government to sell the property and distribute the proceeds. The parties, however, did not offer any support for granting such relief. The funds received were not derived from the foreclosed property and, since the government's claim was fully satisfied, it could not be compelled to sell the property in which it no longer had an interest. Although the other parties' liens against the property remained unpaid, they were unaffected.

A.S. Roberts, DC Ala., 2007-1 USTC ¶50,387.

The government could foreclose its tax lien on an individual's residential property. The IRS was not required to investigate and exhaust alternative collection methods before initiating foreclosure action. Further, the government had a considerable interest in an expeditious foreclosure of its lien. There were no third parties who would be impacted by the foreclosure and the property, since there was no insurance coverage, was at risk of being destroyed while in the individual's possession.

J.L. Meisner, DC Neb., 2007-1 USTC ¶50,513.

The government was entitled to foreclose its tax liens on personal and commercial property to collect the unpaid balance of the taxes due from a couple who had entered into a settlement agreement. The couple claimed that the IRS failed to credit them for payments made but they failed to produce canceled checks or copies of cashiers' checks actually paid to the IRS to prove they made the disputed payments.

N. Vong, DC Minn., 2007-1 USTC ¶50,521.

The government was entitled to foreclose on its tax liens and sell real property to which its liens had attached. An individual had failed to show that tax liabilities assessed against him were incorrect, and had not paid the assessed liabilities; consequently, federal liens had arisen on all of his property. Although the individual had transferred title of the real property to a trust, the liens had attached to the property before the transfer had occurred; consequently the property was not shielded from foreclosure.

D. Ruetz, DC Fla., 2007-2 USTC ¶50,630.

Summary judgment was granted reducing an individual's unpaid tax liability to judgment, foreclosing tax liens, and ordering the sale of real property held by the individual and his wife as tenants by the entirety. The evidence showed that the individual and his wife fraudulently conveyed the real property to a trust in order to avoid the tax liens attached on that property. Because the fraudulent conveyance was set aside, the government was entitled to proceed with the sale of the property, and the wife was entitled to a one-half interest in the sale proceeds.

A.A. Tolbert, DC Ark., 2007-2 USTC ¶50,717.

The government was entitled to foreclose federal tax liens and proceed with judicial sale of a ranch in which the taxpayer held only a one-half undivided interest. Although there was a substantial likelihood that the forced sale would unduly harm the co-tenants, who were innocent third parties, the government's interest in prompt collection of delinquent taxes was paramount. Moreover, the burden placed on the government due to the taxpayer's tax liabilities outweighed the burden placed on the co-tenants by the judicial sale.

J.V. Wells, DC Ky., 2007-2 USTC ¶50,728.

A federal district court's decision refusing to foreclose a federal tax lien against property held by alleged nominees of a delinquent taxpayer was vacated and remanded. The district court erroneously held that the transfer of legal title from the husband to the wife was a requirement for enforcement of a nominee lien against her interest in the property. However, since the wife met the five factors required for nominee status, actual transfer of legal title of the property was not essential to the enforcement of the lien. In addition, the district court failed to determine whether the husband had any interest in the property under state (Utah) law and, if so, whether the lien could be enforced against that interest as a matter of federal law.

D.M. Holman, CA-10, 2007-2 USTC ¶50,734.

A federal district court lacked jurisdiction over a married couple's damages claim against the IRS for failure to release tax liens on their property. The couple failed to exhaust all available administrative remedies with the IRS before brining their suit for damages and, therefore, the government's sovereign immunity was not waived.

S.A. Berk, DC Mass., 2007-2 USTC ¶50,757.

The government was required to submit evidence that its tax liens were properly recorded before it could foreclose those liens and seek judicial sale of a married couple's property to satisfy their tax liability.

A.B. Secapure, DC Calif., 2008-1 USTC ¶50,277.

Tax assessments against a married couple jointly and against the husband individually were reduced to judgment and tax liens on their residence were foreclosed. In addition, the government could proceed with a judicial sale of the residence. Since the residence was held in the husband's name only, the wife did not have compensable interest in the property. Moreover, there were no nonliable third parties who would be affected by the sale.

M. Patron, DC Minn., 2008-1 USTC ¶50,288.

Federal tax liens against an individual's real property were reduced to judgment. The government established that the individual was liable for unpaid taxes, interest and penalties, that he held title to the property as a joint tenant and that the liens had been recorded against his interest in that property.

D. Wagner, DC Colo., 2008-1 USTC ¶50,327.

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.

K. Lang, DC Calif., 2008-2 USTC ¶50,473.

The government was entitled to reduce to judgment a married couple's unpaid tax liability, interest and penalties. The couple filed joint tax returns and the wife failed to show that she was entitled to innocent-spouse relief. Because she did not argue that the Bierbrauer factors weighed in her favor, she failed to establish that the court should decline to order a foreclosure of the property.

J. Lovlie, DC Minn., 2008-2 USTC ¶50,503.

The government was entitled to reduce to judgment the unpaid tax liabilities of an individual and to foreclose federal tax liens on his property. The IRS properly sent by a statutory notice of deficiency certified mail to the individual's the last known address and other possible addresses. Contrary to the individual's argument, the IRS exercised reasonable diligence in determining his address. Although the individual was in contact with the IRS's criminal division while he was incarcerated, the IRS's civil division and criminal division generally do not share information and, therefore, the IRS's civil division was not aware of the individual's change in address while he was incarcerated.

T.T. Navolio, DC Fla., 2008-2 USTC ¶50,505.

The government was entitled to reduce to judgment the unpaid tax assessments, interest and penalties against an individual in light of the individual's stipulation to liability regarding the unpaid taxes. The government was also entitled to foreclose the valid federal tax liens on a real property and sell that property to satisfy the individual's tax debt. The tax liens arose on the date of assessment and attached to all of the individual's property and rights to property.

G.G. Langkand, DC Minn., 2008-2 USTC ¶50,526.

The government was entitled to foreclose and sell a delinquent individual's interest in a property he jointly held with his non-liable wife in tenancy by the entireties because such a sale would not be inequitable to the wife. The wife failed to show that, based on the four factors set forth in Rodgers, 83-1 USTC ¶9374, foreclosure and forced sale of the property would be an extremely inequitable and offensive result. The government's financial interest would have been substantially prejudiced if the sale of the entire property were denied, the wife had acted in such a way as to frustrate the government's tax collection efforts, there was no evidence to show that the wife would be unduly harmed by foreclosure and the interests in this case were easily divisible.

C.J. Barr, DC Mich., 2008-2 USTC ¶50,539.

The government was not granted summary judgment with respect to its motion to foreclose tax liens and sell a delinquent taxpayer's interest in a property he held in joint tenancy with his non-liable wife. The government failed to show that no genuine issues of material fact existed or that the foreclosure and forced sale of the property would be equitable.

M.R. Vogt, DC Ind., 2008-2 USTC ¶50,569.

Tax liens against two properties formerly held by a delinquent taxpayer's wholly owned corporation could be foreclosed even though the properties had been subsequently conveyed to third parties. The government established that the corporation was an alter ego of the taxpayer under the state (Nevada) law. The corporation's interest was inseparable from that of the taxpayer, the properties, as well as loans and insurance taken on them, continued to remain in the taxpayer's name even after the transfer and he paid the mortgage and treated the corporation's assets as his own. Further, the third parties took the properties subject to the tax liens because the government's notices of liens were filed before the third parties' recorded their interest.

L.R. Bretthauer, DC Nev., 2008-2 USTC ¶50,572.

Tax assessments against a married couple who failed to submit competent evidence to contest the accuracy of the assessments were reduced to judgment and federal tax liens on the husband's residence were foreclosed. Since the notices of assessment and demands for payment were properly made, the government was entitled to proceed with the sale of the residence.

K. Palhang, DC Miss., 2008-2 USTC ¶50,618.

Federal tax liens on an individual's real property which he held with his spouse as tenants by the entireties were foreclosed and the government could proceed with a judicial sale of the property. The government established that the individual was liable for unpaid taxes, interest and penalties. The tax liens were perfected upon assessment and attached to the individual's interest in the property prior to any conveyance to his son. Since the individual refused to pay his federal tax liabilities, the government was entitled to proceed with a sale of the real property.

N.P. Webb I, DC Hawaii, 2008-2 USTC ¶50,636.

The government's motion for reconsideration of the court's order denying summary judgment with respect to the IRS' motion to foreclose tax liens and sell a delinquent taxpayer's interest in a property was denied. The government failed to show that no genuine issues of material fact existed or that the foreclosure and forced sale of the property would be equitable based on the factors set forth in Rodgers, 83-1 USTC ¶9374. The burden was on the government to overcome the reasonable inference that the prejudice to the government was only minimal if the sale of the entire property were denied or if it could only sell the taxpayer's joint tenancy interest. Moreover, factual issues existed regarding the non-liable wife's dislocation costs, including the impact on her children and her health if the sale was ordered. The Rodgers factors weighed in the wife's favor because the government failed to provide additional facts necessary to evaluate the impact the factors might have on the wife's dislocation costs.

M.R. Vogt, DC Ind., 2008-2 USTC ¶50,652.

A married couple's motion for reconsideration of the court's order granting summary judgment reducing tax assessments to judgment and foreclosing tax liens on the couple's property was denied. The IRS's assessment of federal taxes was entitled to a presumption of correctness and the couple bore the burden of proving that the assessments were wrong. However, the couple failed to submit competent evidence to contest the accuracy of the assessments and raised meritless arguments.

K. Palhang, DC Miss., 2008-2 USTC ¶50,680.

Federal tax liens attached to properties an individual allegedly conveyed to a trust and could be foreclosed because the trust was merely a sham. No consideration was paid by the trust for the conveyed properties, the individual retained full use of the trust's assets, her personal expenses and those of her residence were paid out of the trust and there was no evidence that any trust assets had been distributed to the supposed beneficiaries. Since, the trust lacked economic reality it was disregarded for tax purposes.

M. McMahan, DC Tex., 2009-1 USTC ¶50,128.

An oral settlement agreement between the IRS and a married couple that allowed the IRS to sell the couple's home to satisfy the husband's unpaid tax liabilities was valid and enforceable. The wife's claim that the settlement agreement was invalid because she was unaware that the agreement involved foreclosure of the property was rejected. Her agreement to allow the IRS to auction the property coupled with the fact that she was intelligent, well-educated and capable of articulating her position, indicated that she understood that the agreement involved foreclosure. Finally, her willingness to sell the property on the condition that the agreement was modified to incorporate her settlement demands also undermined the credibility of her claim.

K.M. Stabler, DC Ala., 2009-1 USTC ¶50,135.

The government's request to foreclose tax liens against a couple's interest in a property was denied. The couple's allegations that the holder of the First Deed of Trust had already foreclosed would impact the government's foreclosure claim.

G.J. Wroblewski, DC Calif., 2009-1 USTC ¶50,182.

The government was entitled to foreclose and sell a delinquent taxpayer's properties which he held as a joint tenant with a non-liable co-owner because such a sale was in the co-owner's best interests. The co-owner would suffer no dislocation costs as he did not reside on any of the properties. He would receive the most advantageous compensation for his interest if the properties were sold in their entirety because it would result in a higher total sale price than a sale of each partial interest. Moreover, the government's interest would be substantially prejudiced by a sale of a partial interest in the properties because it would be at a price disproportionately below the market value of the entire property. Finally, under state (West Virginia) law, the co-owner did not have a "legally recognized expectation" that he had separate property interest that could not be subject to a forced sale by the government.

G.E. Zinkon, DC W.Va., 2009-1 USTC ¶50,183.