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United States v. Gavett

2011 WL 1790504 (U.S. Dist. Ct. D. N.J. 2011) (Unpublished)

TAXATION; LIENS — A taxpayer cannot invent a property interest in an attempt to defeat liens, such as tax liens, against his, her or its property.

A taxpayer was assessed for various individual federal income tax, penalty, and interest obligations covering a number of tax years. Despite notices and demands, the taxpayer did not pay what he owed. Notices of tax liens were filed, and the United States District Court entered a judgment in favor of the government.

Years earlier, the taxpayer and his late wife had acquired an interest in real property. When his wife died, he became the sole owner. Later, he filed a correction of deed with the county clerk. The Government filed a complaint seeking to foreclose the federal tax liens and judgment liens against the property. The taxpayer’s son and son’s wife signed an affidavit of title claiming that they were the only owners of the property and had been for years. The taxpayer then filed an answer and counterclaim making several allegations against the government including fraud, racketeering, inland piracy, extortion, denial of due process, collusion, conspiracy, and public humiliation. The government filed a motion to dismiss the counterclaims, which the taxpayer did not oppose. The government filed a motion for summary judgment, claiming that it was entitled to foreclose on the property and asking the Court to order a sale. The taxpayer opposed the summary judgment motion.

The Court promptly dismissed the taxpayer’s counterclaims, finding them completely lacking in factual support. In reviewing the summary judgment motion, the Court noted that the taxpayer was disputing his tax liability by arguing that the transcripts attached to the motion displayed a surname different than his own, and that he had not agreed to be a taxpayer. The Court found that the issue of liability had already been determined by another court, and that res judicata barred the taxpayer from disputing his tax liability.

Next, the Court found that, because it was undisputed that the taxpayer had refused to satisfy his tax liability, the government was entitled to foreclose its lien on his property. The taxpayer was not able to create a property interest merely by inventing one in an attempt to defeat other interests asserted against his property. The Court found that he attempted to do just that by purporting to grant a common law lien on his property through a tender of amends in favor of his son. There was no legal basis for a tender of amends.

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