Elderly parents defrauded out of real estate property.

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Elderly parents defrauded out of real estate property.

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I have a cousin that convinced my parents that there was an IRS Levy against property they owned that she wanted to get her hands on. There was an IRS Lien NOT a Levy against their property as a result of declining business at their local restaurant that they owned and operated for 17 years. If the stress of owing money to the IRS wasn't enough, they became even more vulnerable after this business was destroyed by a fire caused by 100+ year old electrical wiring. She definitely used their vulnerable frame of minds to her advantage. This cousin of mine was my dad's niece, they never had any reason to not trust that she was telling them the truth. She convinced them to sell her property located on Bois Blanc Island that my parents had owned for years for about 1/3 of its value. The fact is that they would have NEVER sold this property to anyone as it holds tremendous sentimental value to my parents children and only grandchild. She convinced them that if they didn't sell the property to her by a specific date (which I have in writing from the deceitful cousin) that the IRS would seize the property and sell it to the highest bidder. She persuaded them into selling it to her by telling them that this was the best thing for our family, as it would keep it at least within the family, and she also told them that their children and granddaughter would be able to use it whenever they wanted to. Feeling this was better than losing the property to strangers, they agreed to sell the property to her.

They have since contacted the cousin on numerous occasions requesting the documentation she claimed to have in her possesion stating that unless a substantial payment was received by the IRS the property would be seized and sold. These requests have gone unanswered, which leads us all to believe that she did in fact fabricate the entire story.

We feel that she defrauded them out of the property she wanted by pressuring them with losing the property with information that was not true, as there is a very big difference between an IRS Lien vs IRS Levy. Do we stand a chance of getting this sacred piece of "heaven on earth" back?

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D DadsLastRequest Mar 2014 · Answer 1 · 2014-03-10T16:45:05.000-0400

We feel that the most important evidence we have against this cousin is that she boldly lied to my parents to get them to sell her the property. She made them believe that the IRS had issued a LEVY, claiming that the IRS needed to receive a substantial amount of money towards the taxes owed by April 16th, 2012 or they would start proceedings to seize and auction the property. My parents knew there was a LIEN against the property, but they never received an IRS Form 1058 via certified mail, which as I understand from the IRS's website is how my parents would have been notified, if in fact a levy was issued. Their website also indicates that all certified correspondence would have been sent to my parents primary address - my parents did not receive any certified notification of an IRS levy being placed against any of their properties. We find it hard to believe that the IRS would travel 300 miles north and pay to take their vehicle across on the ferry, in hopes of catching my parents at a home that they should have been able to tell was a secondary/vacation home, as this is how my cousin claims she was notified by the IRS. She has been asked on numerous occasions to surrender whatever notification she received from the IRS on my parents behalf, and she produces nothing!

I have a copy of the form that the IRS used to release this property and it very clearly states, "Released From IRS Lien" - if in fact there was a levy against the property wouldn't the form have stated "Released From IRS Levy"?

V vegaslady Mar 2014 · Answer 2 · 2014-03-10T19:30:32.000-0400

It is quite possible that an IRS Revenue Officer would travel that distance to try and find your parents. In Alaska the ROs sometimes have to travel by small hired planes to small villages to reach people. Sometimes they have to watch out for bears between the landing site, garbage dump and the location of their field call. The government pursues taxes around the world, not just where you might think. But, I digress. About the Form 1058....that is a Final Demand warning that a levy may be issued. If a levy is issued you get a copy of the levy that was issued by regular mail. You don't get a certified copy of a notice of levy. The same goes for the filing of a NFTL ( Notice of Federal Tax Lien) you don't get a certified copy of that either. Basically after you've been warned by certified mail of what could happen, it can then start to happen with notice of the actions by regular mail. If the IRS had taken possession of the property your parents would have received a Notice of Seizure, not levy. IF the property was seized and later released they would have gotten a notice of the release. I doubt if the property was ever seized....liened yes, seized no. The sale of the property saved them that experience. Since the purchase involved a mortgage it's most likely that a title company handled paperwork. How about looking at their file? The cousin may actually have been contacted in person at the property. It is possible that she was told (probably inappropriately) that this property was going to be seized and sold. That may not have been a lie. Cutting a deal that was such an advantage to her, not so nice.
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D DadsLastRequest Mar 2014 · Answer 3 · 2014-03-10T21:01:00.000-0400

I'm getting a little confused because some of what you're saying doesn't agree with what I have read on the IRS's official website.

You're saying that it is possible that an IRS official traveled 300 miles away from my parents primary residence and place of business, paid the fees to transport them and their vehicle via ferry boat to the island, find my parents place and then leave the legal IRS documents regarding their visit which would have been addressed to my parents, with someone other than my parents?

If no one was there, would they have left the IRS documentation posted on the door? If they went to the trouble to find the place, wouldn't they have left some sort of documentation that should have made its way to my parents via the evil cousin?

You said that maybe my cousin was told "probably inappropriately" that the property was going to be seized and sold - does that mean that they told her that officially there was currently a "lien" on the property, and that if something wasn't done in a timely fashion that it would then be seized and sold? Would they have given her a definite final date for payment, either verbally or in writing?

Thank you so much for trying to help me to understand what actually happened...little by little some of the pieces may be coming together...

D DadsLastRequest Mar 2014 · Answer 4 · 2014-03-10T21:37:25.000-0400

Another thought...the IRS could have easily made a trip to my parents primary residence or their place of business and they would have most definitely been able to locate and speak to them, so why would they send someone on what could, and at most times of the year, would have been a 300 mile wild goose chase?

V vegaslady Mar 2014 · Answer 5 · 2014-03-11T20:08:04.000-0400

The Revenue Officer could make the decision by his/herself to see the property that would be seized. If I think I would have to seize and sell it I would have gone to look at the property. Evaluating the asset for seizure is different than talking to the taxpayer. I wouldn't consider that a wild goose chase if it was the property I wanted to see. (For example, does the property have saleable timber, the condition of the buildings, etc. It's easier if you really know what you're selling, maybe get some pictures and you can't get the right info just off the legal description.). If the RO wanted to talk to your parents, you're right, going to the house or business would be typical, usually unannounced ahead of time. I'm guessing that the RO did contact your parents. I'm not sure what type of documents you think the IRS person would have left with your cousin. It doesn't sound like the property was ever seized by the IRS and therefore no such documents relating to a seizure were ever sent or left with anyone. Since the NFTL is a public document filed at the county, so what that means could be discussed. It seems very unlikely that a relative would have been told of a due date for a payment for somebody else. That wouldn't have been her business, nor would the amount needed to prevent seizure. There is a case history with the IRS of the actions to collect the taxes, but would be a bit of a pain in the a•• to get it. (Parents would probably need to file a Freedom of Information request and pay for it.). I'm thinking that the cousin got wind of your parents tax problems and took advantage of it. I'm guessing your parents owned the business as a sole proprietorship and since it wasn't going so well that they didn't owe personal income tax. What is more likely is that they owed payroll taxes on the employees wages. The IRS definitely wants to collect those because the employees are getting credit on THEIR taxes for the income tax and Social Security taxes that were withheld and not paid bt the employer. So it does get paid in but the government doesn't hold that against the employee who never even knows....they still get their refund and credit for Social Security and Medicare coverage. Overall it will be hard to prove fraud on the part of the cousin IMHO because it sounds to me like your parents, if competent, just made a bad deal. They didn't get a clause in the sale that allowed the family's ongoing use of the property, they took too little money for it, they got themselves in financial trouble and generally made some bad decisions. Most of that is not the fault if the cousin. It is possible that your parents got confused, stressed out, and now feel victimized. Is there a way to smooth over the anger and come to a different resolution other than pursuing a criminal case? Is there some type of family mediation program in your area that could help work things out?

D DadsLastRequest Mar 2014 · Answer 6 · 2014-03-11T21:42:21.000-0400

I really do appreciate the knowledge you've shared, vegaslady...I would agree with your words if the story ended here, but we have significant evidence that proves she did it with the intent to defraud my parents - she duped them into believing that she was doing this for their own good! The truth is that her actions and words all prove otherwise!! As far as a mediator...I have an uncle that volunteered to try and help us discover just exactly how this entire nightmare went down, however, after his initial conversation with the other party, he informed me, very politely, that this was a much more stressfully difficult situation than he and my aunt had bargained for, and asked to be removed from the entire serious kerfuffle...this spoke volumes...if it were just a slight misunderstanding that could be ironed out, he wouldn't have opted out - as well as, if he thought we were all barking up the wrong tree he would have advised us to not waste our time.

I feel that the Prosecuting Attorney's interest in our case is promising, I don't believe he would have asked for detailed facts if he felt it was just a case of a "bad deal"...

V vegaslady Mar 2014 · Answer 7 · 2014-03-11T23:55:27.000-0400

Good luck with your case and the Prosecuting Attorney. Let us know how it all turns out down the line.

J JonasSmith May 2014 · Answer 8 · 2014-05-24T01:05:43.000-0400

Wow! You’ve certainly done a great job by posting this bit of information for the benefit of us viewers. It’s so great to know that the Internet is not a dumb place after all.

V vegaslady May 2014 · Answer 9 · 2014-05-24T09:54:11.000-0400

I'd bet 100 to 1 that the District Attorney, if ever provided a full account of the situation, never does a thing. A good way to put off having to deal with someone so emotionally involved is to send them off with the task of putting all the data together and essentially build the case for them. How often do you think that a pulled together report ever gets presented to a DA? Especially when the OP doesn't have the support of the immediate family (child and siblings). It's more than time to let it go. A book would even make it worse.

G GardenArtist May 2014 · Answer 10 · 2014-05-24T12:00:28.000-0400

VegasLady, I've found your insights into the issues very helpful and an educational experience.

And I fully support your caution to the OP not to write a book. She should have documented everything but to publish would be one of the worst things she could do, especially since the cousin could well learn of it and institute an action for libel and/or slander and/or character defamation.

As to the actual process of what happened, the OP should get the tax ID (Sidwell) from her parents' tax bills, contact a title company and ask for a foreclosure search or other thorough search which reflects the history of actions affecting the property. A commitment doesn't provide that detail. If she still needs to know more about the IRS actions and release, a foreclosure search will help reveal those actions. But she should explain to the title company what her interests are as there may be additional ways to get the data she seeks.

She could also contact the county register of deeds or go to the county offices and research the issues herself. Whatever liens or levies were filed would be reflected.

And as to fraud, a critical element of proof is the INTENT to commit fraud. The cousin could easily argue that she was simply helping out the family.

J JonasSmith Jun 2014 · Answer 11 · 2014-06-04T04:54:51.000-0400

No, no one owes money to the IRS. You do not "owe" money to a mugger so you do not owe money to the Irresponsible Rotten Scum.

V vegaslady Jun 2014 · Answer 12 · 2014-06-04T08:31:25.000-0400

Wow Jonas. What insight! That comment is certainly bound to help many of us on this site. Enjoy Singapore and don't come back to the land of freedom of speech.

G GardenArtist Jun 2014 · Answer 13 · 2014-06-04T11:44:26.000-0400

Jonas, perhaps you should join Snowden in exile; the two of you would compliment each other's treason.

Elderly parents defrauded out of real estate property.

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