The Journal of Accountancy repots that, applying a five-part test, a district court upholds IRS liens against property nominally owned by the taxpayer’s wife.
Specifically, the District Court for the Northern District of Illinois invalidated a husband’s quitclaim deed that purportedly transferred ownership of the marital residence to his spouse. The husband, Jack L. Stone, had unpaid federal tax liabilities, and the government was seeking enforcement of tax liens against him. The court held that the wife, Linda K. Stone, held the husband’s interest in the property as his nominee. Accordingly, the tax liens attached to the husband’s interest in the property.