IRC 6321

The United States District Court, S.D. California in United States of America v. Charles Le Beau, et al. signed January 30, 2024 at 2024 WL 347918 explores the application of liens, nominee liens and fraudulent conveyances.  This case reviews the many transfers of property between the husband, who is a lawyer, his wife, and his business.  The government is seeking to enforce its tax lien against the wife, who holds legal title to the property.  Among other arguments, the government argues that she is a nominee lienholder.   The Court explains that there are six factors to be reviewed in this type of analysis: 1) whether inadequate or no consideration was paid by the nominees; 2) whether the properties were placed in the nominees’ names in anticipation of a lawsuit or other liability while the transferor remains in control of the property; 3) whether there is a close relationship between the parties; 4) failure to record the conveyances; 5) whether the transferor retained possession; and 6) whether the transferor continues to enjoy the benefits of the transferred property. In this matter, five of the six factors favored treating the wife as nominee lienholder of the husband, which allowed the government to enforce the lien filing.