Sanders -- No Valid Revenue Districts

[Joey Smith]

U.S. v. Sanders, 2012 WL 4088823 (S.D.Ill., Slip Copy, Sept. 17, 2012).

United States District Court, S.D. Illinois.

UNITED STATES of America, Plaintiff,

v.

Frankie L. SANDERS, in his individual capacity; Frankie L. Sanders, in his capacity as trustee of the Y & K Leasing Trust; Frankie L. Sanders, in his capacity as trustee of the Triple S Family Trust; and the State of Illinois Department of Revenue, Defendants.

Civil No. 11–CV–912–WDS.

Sept. 17, 2012.

MEMORANDUM & ORDER

STIEHL, District Judge.

*1 Before the Court is defendant Frankie L. Sanders' ("Sanders") Motion to Dismiss (Doc. 6), to which plaintiff has filed a response (Doc. 12), and Sanders has filed a reply (Doc. 20). Sanders seeks dismissal of the complaint against him as an individual and in his capacity as trustee, based upon his assertion that the United States has failed to state a claim upon which relief can be granted. Sanders argues that because of the lack of internal revenue districts and district directors, the United States is not entitled to pursue collection remedies against him.

BACKGROUND

Plaintiff, the United States of America, brought this action pursuant to 26 U.S.C. sec. 7401(a), to collect from Sanders outstanding liabilities for federal internal revenue taxes, and to enforce federal income tax liens upon his interests in certain realty (Doc. 2). The government alleges that Sanders failed to file income tax returns for each of the taxable years ending December 31, 1991, through December 31, 1997, and for each of those years, the Commissioner of Internal Revenue determined an income tax deficiency. A delegate of the Secretary of the Treasury made assessments against Sanders for each of the income tax periods noted above. Sanders was given notice of each assessment and received a demand for payment of the assessed liability in accordance with 26 U.S.C. sec. 6303. As of August 31, 2011, Sanders remained indebted to the United States for unpaid income taxes in the amount of $406,099.09, with interest continuing to accrue.

Sanders allegedly took a number of actions to attempt to evade tax collection, including: execution of documents that placed ownership of his assets with other persons or entities that effectively function as his nominees or his alter ego; conversion of hundreds of thousands of dollars in bank and investment accounts into assets that are difficult to trace (collectable coins and guns); and the transfer of the Fayette Farm and Montgomery Farm to trusts for little or no consideration. These trusts are allegedly illusory and do not constitute legal trusts in that Sanders is the sole owner of the farms, and the trusts are simply Sanders' nominee or alter ego.

The government further alleges that Sanders' transfer of the two farms to trusts was made with the intent to hinder, delay, and/or defraud his creditor, the United States; Sanders transferred the Montgomery Farm without receiving a reasonable equivalent value in exchange, and the Fayette Farm without the grantor receiving a reasonably equivalent value in exchange; the transfers rendered Sanders insolvent; and the transfers were fraudulent under Chapter 740 of the Illinois Statutes, making each void as to the United States of America.

The United States further alleges that pursuant to 26 U.S.C. sec. 6321–22, a lien in favor of the United States arose on the date of each of the assessments upon all property and rights to property belonging to Sanders, including the Fayette and Montgomery Farms, and that the United States is entitled to enforce its liens against the farms by judicial sale of each, with distribution of the proceeds to the United States and the defendants in accordance with their interests and priorities.

*2 The United States requests this Court: (1) find that Sanders is liable to the United States for unpaid internal revenue taxes in the amount of $406,099.09, plus interest, penalties, and other statutory additions that continue to accrue from and after August 31, 2011; (2) find that the transfer of the Montgomery Farm to the Y & K Leasing Trust is void as a fraudulent transfer, and Sanders is, therefore, the sole owner of the Montgomery Farm; (3) find that the transfer of the Fayette Farm to the Triple S Family Trust is void as a fraudulent transfer, and Sanders is, therefore, the sole owner of the Fayette Farm; (4) find that the Y & K Leasing Trust is Sanders' nominee/alter ego, and Sanders is, therefore, the sole owner of the Montgomery Farm; (5) find that the Triple S Family Trust is Sanders' nominee/alter ego, and Sanders is, therefore, the sole owner of the Fayette Farm; (6) find that the United States has valid and subsisting tax liens on all property and rights to property belonging to Sanders, (including but not limited to Sanders' interests in the Fayette Farm and the Montgomery Farm) to the extent of Sanders' unpaid federal tax liabilities, including amounts which continue to accrue; (7) order that the United States' liens on the Fayette Farm and Montgomery Farm be enforced by sale of said real estate, free and clear of all rights, title, and interest of the parties, with distribution of the proceeds to the United States and the defendants in accord with their lawful priorities; (8) award the United States costs, fees, and disbursements it incurred for this action; and (9) award the United States such other relief as this Court deems just and proper.

Sanders seeks dismissal of the complaint against him as an individual and in his capacity as trustee, based upon his assertion that the United States has failed to state a claim upon which relief can be granted. Sanders argues that because of the lack of "district directors," the United States is not entitled to pursue collection remedies against him. In response, the United States asserts that Sanders' motion should be denied because the United States has the power to assess and collect internal revenue taxes, and Sanders' argument that the Internal Revenue Service Restructuring and Reform Act of 1998 Pub.L. No. 105–206, 112 Stat. 685 (1998) ("RRA"),FN1 divested the United States of its power to tax lacks merit.

FN1. The RRA provides that:

(a) The Commissioner of Internal Revenue shall develop and implement a plan to reorganize the Internal Revenue Service. The plan shall (1) supercede any organization or reorganization of the Internal Revenue Service based on any statute or reorganization plan applicable on the effective date of this section; (2) eliminate or substantially modify the existing organization of the Internal Revenue service which is based on a national, regional, and district structure; (3) establish organizational units serving particular groups of taxpayers with similar needs; and (4) ensure an independent appeals function within the Internal Revenue Service...."

Pub.L. No. 105–206, sec. 1001, 112 Stat. 685 (1998).

LEGAL STANDARD

While Sanders frames his motion as one seeking dismissal for plaintiff's failure to state a claim upon which relief can be granted, it appears to the Court that he is actually challenging the plaintiff's standing to bring this claim against him, seeking dismissal under Fed.R.Civ.P. 12(b)(1), and therefore ultimately challenging the Court's subject-matter jurisdiction. FN2 In fact, in Sanders' reply, he requests that the Court dismiss the complaint for lack of jurisdiction (Doc. 20 at 5). Nowhere in his motion or reply does Sanders reference the 12(b)(6) standards regarding the sufficiency of the complaint (besides citing 12(b)(6) in the first paragraph of his motion and one sentence stating that the complaint cannot state a claim upon which relief can be granted on page 19 of his motion). The Court will, therefore, consider defendant's motion as a motion to dismiss for lack of subject-matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1).

FN2. Lack of standing and failure to state a claim upon which relief can be granted are "distinct concepts [which] can be difficult to keep separate," but "the question whether a plaintiff states a claim for relief 'goes to the merits' in the typical case, not the justiciability of the dispute." Bond v. United States, 131 S.Ct. 2355, 2362 (2011). Sanders argues not the merits of the complaint against him, but the justiciability—whether the United States has the authority or ability to bring these claims against him in the first place.

*3 Under Article III of the Constitution, the judicial power of the United States is limited to cases and controversies, and a plaintiff must have standing to fall within this limitation. Hein v. Freedom From Religion Found., Inc., 551 U.S. 587, 597–98 (2007). "Standing under Article III of the Constitution requires that an injury be concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling." Monsanto Co. v. Geertson Seed Farms, 130 S.Ct. 2743, 2753 (2010); see also Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992). The plaintiff bears the burden of establishing standing under Article III. DaimlerChrysler Corp. v. Cuno, 547 U .S. 332, 342 (2006).

Plaintiff claims that the Court has jurisdiction pursuant to 28 U .S.C. secs. 1331, 1340, 1345 and 26 U.S.C. secs. 7402–7403. Under 28 U.S.C. sec. 1331, "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." Pursuant to 28 U.S.C. sec. 1340, "[t]he district courts shall have original jurisdiction of any civil action arising under any Act of Congress providing for internal revenue...." Pursuant to 28 U.S.C. sec. 1345, "[e]xcept as otherwise provided by Act of Congress, the district courts shall have original jurisdiction of all civil actions, suits, or proceedings commenced by the United States, or by any agency or officer thereof expressly authorized to sue by Act of Congress." Pursuant to 26 U.S.C. sec. 7402(a):

[t]he district courts of the United States at the instance of the United States shall have such jurisdiction to make and issue in civil actions, writs and orders of injunction, and of ne exeat republica, orders appointing receivers, and such other orders and processes, and to render such judgments and decrees as may be necessary or appropriate for the enforcement of the internal revenue laws.

Finally, pursuant to 26 U.S.C. sec. 7403(a):

n any case where there has been a refusal or neglect to pay any tax, or to discharge any liability in respect thereof, whether or not levy has been made, the Attorney General or his delegate, at the request of the Secretary, may direct a civil action to be filed in a district court of the United States to enforce the lien of the United States under this title with respect to such tax or liability or to subject any property, of whatever nature, of the delinquent, or in which he has any right, title, or interest, to the payment of such tax or liability.

Sanders claims that the United States cannot bring the present complaint against him to collect outstanding federal taxes and to enforce tax liens upon his interests in certain realty because, he claims, the United States has failed to follow its own internal revenue statutes and therefore lacks authority to assess or collect taxes. Plaintiff seemingly challenges standing on the basis that the plaintiff cannot claim to be injured by Sanders' actions because plaintiff completely lacks authority to assess or collect taxes or, in other words, Sanders has not violated a legally protected interest of the United States.

ANALYSIS

*4 For the sake of brevity, the Court will not repeat Sanders' entire rendition of the historical progression and restructuring of the tax laws which, in his opinion, led to the loss of the United States' authority to collect or assess taxes. The crux of Sanders' motion for dismissal rests on his assertion that after enactment of the RRA, the district directors were abolished, and, according to the language of particular code sections, the entire federal taxing system rests upon the existence of districts and their directors.FN3 He takes issue with the fact that the internal revenue code continues to refer to districts and district directors, even though they no longer exist and have not existed for years. Based upon the various Code of Federal Regulations sections which refer to districts and district directors, and are printed yearly, Sanders asserts that the district structure "continues," as these sections have not been modified, terminated, superseded, set aside, or revoked in accordance with the law. He claims that the RRA did not repeal 26 U.S.C. sec. 7621, which directs the President to establish internal revenue districts, and provides the jurisdictional basis for administration of the internal revenue laws. He further claims that the district directors are responsible for processes related to liens and levies within internal revenue districts, and because directors no longer exist, the Commissioner has no authority to place liens or levies on Sanders' property. Sanders also claims that the Secretary of the Treasury himself is the only individual authorized to initiate a complaint such as the one against Sanders, and he "doubts" that the Secretary himself authorized the complaint at bar. Finally, Sanders claims that, according to the regulations, the only delegate of the Secretary authorized to make assessments or perform collection functions (such as lien enforcement), is the district director.

FN3. Defendant cites 26 U.S.C. sec. 7621(a), which provides, inter alia, "[t]he President shall establish convenient internal revenue districts for the purpose of administering the internal revenue laws. The President may from time to time alter such districts." He also cites 26 C.F.R. sec. 301.6301–1, which provides, inter alia, "[t]he taxes imposed by the internal revenue laws shall be collected by district directors of internal revenue."

Plaintiff asserts that Sanders' district director argument is meritless, and has been rejected by other courts. For instance, in Grunsted v. Comm'r of Internal Revenue, 136 T.C. 455, 460–61, 463 n. 5 (May 11, 2011), the United States Tax Court addressed the same district director argument Sanders asserts here, clearly explaining why it lacks merit. This Court will not re-invent the wheel, but instead, adopts the United States Tax Court's explanation in the following excerpt:

An assessment is made by recording the liability of a taxpayer in the office of the Secretary in accordance with rules or regulations prescribed by the Secretary. Sec. 6203. Assessments are made by assessment officers who are appointed by the district director and the director of the regional service center. Sec. 301.6203–1, Proced. & Admin. Regs. Petitioner argues that there is no district director, therefore no assessment officers have been properly appointed and so there can be no valid assessment of frivolous return penalties against him. Petitioner is correct in arguing that there are no longer any district directors. He errs, however, in concluding that there were no valid assessments because of the absence of district directors.

*5 The IRS has been reorganized several times in recent history. The district director position and responsibilities were assigned to others after the Internal Revenue Service Restructuring and Reform Act of 1998(RRA), Pub.L. 105–206, 112 Stat. 685, required the Commissioner to eliminate or substantially modify the IRS' national, regional and district structure. Id. sec. 1001, 112 Stat. 689. To ensure continuity of operations, the RRA specifically included a savings provision. Id. sec. 1001(b). The savings provision applies to keep in effect regulations that refer to officers whose positions no longer exist. Id. It also provides that nothing in the reorganization plan would be considered to impair any right or remedy to recover any penalty claimed to have been collected without authority. Id.

Furthermore, IRS Deleg. Order 1–23 (formerly IRS Deleg. Order 193, Rev. 6), Internal Revenue Manual pt. 1.2.40.22 (Nov. 8, 2000) allows directors, submission processing field, compliance services field and accounts management field to appoint assessment officers. This order further implemented Congress' intent that the IRS' normal duties, including that of assessment, not be obstructed by the reorganization.FN5 In short, petitioner's frivolous return penalties were properly assessed and his argument, albeit novel, is without merit.

FNFN5 See H. Conf. Rept. 105–599 at 194 (1998), 1998–3 C.B. 747, 948 ("The IRS Commissioner is directed to restructure the IRS by eliminating or substantially modifying the present-law three-tier geographic structure and replacing it with an organizational structure that features operating units serving particular groups of taxpayers with similar needs. * * * The legality of IRS actions will not be affected pending further appropriate statutory changes relating to such a reorganization (e.g., eliminating statutory references to obsolete positions).").

Id. District courts have arrived at similar conclusions when faced with similar arguments: in United States v. Barry, No. 2:08–cr–56–FtM–99SPC, 2009 WL 1767581, at *2 (M.D. Fla. June 22, 2009), the defendant argued that the lack of internal revenue districts stripped the court of jurisdiction, in that no venue could be found without established districts. The court concluded:

The bureaucratic restructuring of the Internal Revenue Service authorized by the Internal Revenue Service Reform and Restructuring Act of 1998 did not eliminate the statutory requirement that defendant file tax returns under the circumstances set forth in the tax statutes. See 26 U.S.C. sec. 6012(a) (2002). An individual such as Mr. Barry is required to file their tax return "in the internal revenue district in which is located the legal residence or principal place of business of the person making the return," 26 U.S.C. sec. 6091(b)(1)(A)(I), or "at the service center serving the internal revenue district" in which is located the legal residence or principal place of business of the person making the return, 26 U .S.C. sec. 6091(b)(1)(A)(ii). Thus, as Mr. Barry recognizes ..., venue is proper in either the district of residence or the district where the service center is located. Accordingly, defendant's arguments regarding venue lack merit.

*6 Id. Similarly, in United States v. Springer, 444 F. App'x 256, 260–61 (10th Cir.2011), the court defeated an argument strikingly similar to Sanders' as "patently frivolous:"

Defendants first contend they committed no crimes because no government entity exists outside of Washington, D.C. with the lawfully delegated authority to collect taxes or enforce federal tax laws. As we understand their argument, defendants believe the Secretary of the Treasury is authorized to collect taxes only within the territorial limits of Washington, D.C. See Aplt. Revised Opening Br. at 10 (citing 4 U.S.C. sec. 72 ("All offices attached to the seat of government shall be exercised in the District of Columbia, and not elsewhere, except as otherwise expressly provided by law.")). To accommodate this geographic restriction, defendants contend, Congress granted the President, pursuant to 26 U.S.C. sec. 7621, the power to establish internal revenue districts, headed by district directors, to exercise the Treasury Secretary's authority beyond Washington. See Aplt. Revised Opening Br. at 8–9. However, Congress passed the Internal Revenue Service Restructuring and Reform Act of 1998 ("RRA"), Pub.L. 105–206, 112 Stat. 685, which, among other things, abolished internal revenue districts and district directors. See Aplt. Revised Opening Br. at 11 (citing the RRA and asserting that "[w]ithout [internal revenue districts and district directors] there could never have been any proper delegation of authority outside the District of Columbia from the [Treasury] Secretary to any U.S. Attorney."). Consequently, defendants claim, there is no legally authorized entity to collect taxes or enforce the tax laws, and no criminal offense stemming from their failure to pay taxes. See id. ("Without [internal revenue districts and district directors] the indictment failed to allege an offense in all Six Counts because no law required Springer to deliver any Form 1040 ... to any place required by law." (internal quotation marks omitted)).

These types of spurious delegation arguments were rejected as frivolous before the RRA was enacted, see, e.g., Lonsdale v. United States, 919 F.2d 1440, 1448 (10th Cir.1990), and they have been rejected as frivolous since, see, e.g., United States v. Ford, 514 F.3d 1047, 1053 (10th Cir.2008). The Secretary of the Treasury is authorized under 26 U.S.C. sec. 6091(a) to promulgate regulations prescribing "the place for the filing of any return, declaration, statement or other document." Internal revenue districts are "now defunct," Allnutt v. Comm'r, 523 F.3d 406, 408 n. 1 (4th Cir.2008), but 26 C.F.R. sec. 1.6091–2(a) requires individuals to file returns with "any person assigned the responsibility to receive returns at the local Internal Revenue Service office that serves the legal residence ... of the person required to make the return." Otherwise, if so instructed, individuals or corporations must file returns with a specifically designated internal revenue service center. Id. sec. 1.6091–2(c).

*7 In short, defendants' delegation argument is patently frivolous.

In accordance with the opinions cited above, the Court FINDS Sanders' argument that the lack of districts and district directors renders the United States powerless to assess or collect taxes, and enforce tax laws to be meritless. The RRA contains specific provisions that keep the regulations referring to districts and district directors in full effect, including all of the rights and remedies prescribed therein, even though those districts or district directors no longer exist. Besides asserting his meritless district director argument, Sanders argues no other basis upon which this Court lacks jurisdiction.

CONCLUSION

In accordance with the statutes conferring jurisdiction upon this Court to enforce IRS liens, and the power conferred upon the United States and its various officers having delegated authority to assess and collect taxes, the Court can find no reason why the United States lacks standing to bring this action against Sanders, or that this case does not otherwise meet the requirements of Article III. The Court, therefore, DENIES Sanders' motion to dismiss (Doc. 6) on all grounds raised.

IT IS SO ORDERED.

[Famspear]

"Oh, dang!", exclaimed poor little Frankie
As he reached, teary-eyed, for a hankie.
"My great theory had cracks --
"Now I have to pay tax!
"This is makin' me feel sad and cranky!"

[grixit]

And remember kids:

No Frivpen = Victory!

[Gregg]

Thread too gay...did not read.

But you felt the need to comment?

[Pottapaug1938]

Thread too gay...

Not that there's anything wrong with that...Jerry.

...did not read.

[The Observer]

UNITED STATES OF AMERICA,
Plaintiff,
v.
FRANKIE L. SANDERS AND
STATE OF ILLINOIS DEPARTMENT OF REVENUE,
Defendants.

Release Date: FEBRUARY 18, 2016


IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS

MEMORANDUM AND ORDER

ROSENSTENGEL, District Judge.

Defendant Frankie Sanders is a self-employed farmer. He has not, however, filed a federal income tax return or paid federal income taxes since at least 1991. In fact, it is unclear if he has ever done so. He is a "tax defier" and believes that he has no obligation to pay income taxes. As many tax protestors before him have learned, adherence to this belief, no matter how sincerely held, is unwise and can be costly. 1 That is the case here. The Government filed this collection lawsuit seeking to satisfy, or at least partially satisfy, Mr. Sanders's tax debt by selling the two farms on which three generations of his family have earned their livelihood.

This matter is currently before the Court on the motion for summary judgment filed by the Government on March 7, 2015 (Doc. 87). The Government seeks a judgment that, for the tax years 1991 through 1997, Mr. Sanders is liable for $ 441,845.75 in unpaid federal income taxes, penalties, and interest through January 31, 2015 (Doc. 87). The Government further seeks additional interest and statutory additions accruing from February 1, 2015, to the present (Doc. 87). The Government also seeks a judgment declaring that Mr. Sanders's tax liabilities constitute a valid lien on all property belonging to him -- including a farm in Fayette County, Illinois, and a farm in Montgomery County, Illinois -- and permitting the Government to enforce those liens by foreclosing on and selling the properties (Doc. 87).

FACTUAL BACKGROUND

A. The Audit and Assessments

As mentioned above, Frankie Sanders has not filed a tax return since at least 1991. The Internal Revenue Service ("IRS") eventually caught up with him, and, in 1998, the IRS began an audit of Mr. Sanders's financial dealings during the calendar years 1991 through 1997 (Docs. 87-3; 87-4). Mr. Sanders refused to respond to any of the agents' phone calls or letters or otherwise cooperate with them (Doc. 87-3). Without the documents needed to determine his tax liability, the agents attempted to reconstruct Mr. Sanders's income and tax liabilities using information obtained from public records and the records of private businesses with whom Mr. Sanders conducted business (Doc. 87-3; see also Doc. 87-6, paragraph 3 and pp. 5-50; Doc. 87-7; Doc. 87-8, pp. 1-20). In particular, the IRS agents consulted records from the United States Department of Agriculture and its Farm Services Agencies, from which they learned that Frankie Sanders operated a farm in Fayette County, Illinois (the "Fayette farm"), which was owned by his mother Genevieve Sanders (Doc. 87-6, pp. 43-50; Doc. 87-7, pp. 1-6). The Fayette farm was purchased by Mr. Sanders's parents, Milton and Genevieve, in 1951 when Mr. Sanders was a child (Doc. 87-1, paragraph 2; Doc. 87-10, pp. 178, 184). 2 Mr. Sanders grew up on the Fayette farm, raised his sons there, 3 and continues to live there to this day (Doc. 87-1, paragraphs 1, 3; Doc. 87-4, pp. 34-36; Doc. 87-10, p. 90).

The IRS also learned that Frankie Sanders owned and operated a second farm in Montgomery County, Illinois (the "Montgomery farm") (Doc. 87-6, pp. 43-50; Doc. 87-7, pp. 1-6). The Montgomery farm was purchased by Mr. Sanders in 1977 with a loan from the seller pursuant to a land contract (Doc. 87-1, paragraphs 6, 9; Doc. 87-10, pp. 124-25, 207-251). Mr. Sanders made installment payments from 1977 to 1996 that totaled approximately $ 412,500 (Doc. 87-1, paragraph 10; Doc. 87-6, pp. 37, 38). On November 21, 1996, a warranty deed transferring title of the property to Mr. Sanders was recorded in Montgomery County, Illinois (Doc. 87-6, p. 38; Doc. 87-10, p. 218). 4 Six days later, Mr. Sanders gifted about five and a half acres of the Montgomery farm to his son, Eric, and Eric's wife, Karen (Doc. 87-10, pp. 111, 219-20). 5

From plat maps and land records maintained by the Recorder of Deeds in Fayette County and in Montgomery County, the agents determined the size and location of the Fayette farm and the Montgomery farm (Doc. 87-6, pp. 37-50; Doc. 87-7, pp. 1-5). The agents then canvassed local grain elevators, livestock dealers, and hauling companies, and, while they were able to identify some of Mr. Sanders's crop revenues, they could not assemble a reasonably complete set of business records for his farm operations (Doc. 87-1, paragraphs 34, 35; Doc. 87-6, p. 18. See also, e.g., Doc. 87-7, p. 19).

Left with no other option, the agents calculated Mr. Sanders's tax liability by estimating his gross income, deductions, and exemptions (Doc. 87-1, paragraph 36). In particular, audit reports submitted by the Government demonstrate that agents estimated grain sales based on the number of acres Mr. Sanders operated and statistical data showing the average grain yields and prices for the general area of Montgomery and Fayette Counties (see Doc. 87-6, pp. 20-22; Doc. 87-7, pp. 19-33). 6 Because the agents did not know the financial arrangement between Mr. Sanders and his mother regarding compensation for operating the Fayette farm, all income estimated from that farm was determined to be compensation paid to Mr. Sanders (Doc. 87-7, pp. 19-33). All income estimated from the Montgomery farm was also attributed to Mr. Sanders (see id.). 7 Also factored into his income were the dividends that Mr. Sanders earned from the Nokomis Equity elevator and the Rosamond Cooperative (Doc. 87-7, pp. 34-35).

The audit reports further describe how the agents estimated Mr. Sanders's deductible business expenses by using statistical data to estimate his grain production costs (Doc. 87-7, pp. 45-51; Doc. 87-8, pp. 1-15). The agents also included the self-employment tax deduction (Doc. 87-7, pp. 36-41); the standard deduction (Id. at pp. 42-44); and the personal exemption for each respective year (Doc. 87-8, pp. 16-18). Based on Mr. Sanders's estimated adjusted gross income, the agents calculated Mr. Sanders's tax liabilities and penalties for the years 1991 through 1997 (Doc. 87-1, paragraph 36; Doc. 87-8, pp. 55-60).

The IRS then served Mr. Sanders with a statutory Notice of Deficiency dated May 9, 2001, for tax years 1991 through 1997, demanding payment of $ 130,908 in back taxes and penalties plus an undisclosed amount in interest (Doc. 87-1, paragraph 37; Doc. 87-6, paragraph 4; see Doc. 87-8, pp. 21-83). 8 Mr. Sanders did not challenge the IRS's deficiency determination (Doc. 87-1, paragraph 38; Doc. 87-6, paragraph 4). Consequently, on October 15, 2001, Mr. Sanders was assessed with the income tax liabilities, penalties, and interest that had accrued to date (Doc. 87-1, paragraph 39; Doc. 87-6, paragraph 5; Doc. 87-8, pp. 85, 97, 103, 109, 115, 122, 227; Doc. 87-9). 9 Years later, in March 2006, Mr. Sanders was assessed with additional penalties (Doc. 87-1, paragraph 39; Doc. 87-6, paragraph 5; Doc. 87-8, pp. 85, 97, 103, 109, 115, 122, 227; Doc. 87-9). The Government claims that a notice of the assessment and a demand for payment was mailed to Mr. Sanders on the same day of (or shortly after) each assessment (Doc. 87-1, paragraph 40; Doc. 87-9). All assessments are contained in the following table:

Tax Assessment Assessment
Year Date Assessment Type Amount
___________________________________________________________________________

1991 Oct. 15, 2001 Tax by examination $ 9,890.00

1991 Oct. 15, 2001 IRC section 6651(a)(1) $ 2,472.50
failure to file penalty

1991 Oct. 15, 2001 IRC section 6654 estimated $ 565.22
tax penalty

1991 Oct. 15, 2001 Interest to assessment date $ 14,659.07

1991 March 27, 2006 IRC section 6651(a)(2)-(3) failure $ 2,472.50
to pay penalty

1992 Oct. 15, 2001 Tax by examination $ 13,997.00

1992 Oct. 15, 2001 IRC section 6651(a)(1) failure $ 3,499.25
to file penalty

1992 Oct. 15, 2001 IRC section 6654 estimated $ 610.49
tax penalty

1992 Oct. 15, 2001 Interest to assessment date $ 18,002.90

1992 March 27, 2006 IRC section 6651(a)(2)-(3) $ 3,499.25
failure to pay penalty

1993 Oct. 15, 2001 Tax by examination $ 18,939.00

1993 Oct. 15, 2001 IRC section 6651(a)(1) failure $ 4,734.75
to file penalty

1993 Oct. 15, 2001 IRC section 6654 estimated $ 793.53
tax penalty

1993 Oct. 15, 2001 Interest to assessment date $ 21,112.20

1993 March 27, 2006 IRC section 6651(a)(2)-(3) $ 4,734.75
failure to pay penalty

1994 Oct. 15, 2001 Tax by examination $ 11,924.00

1994 Oct. 15, 2001 IRC section 6651(a)(1) $ 2,981.00
failure to file penalty

1994 Oct. 15, 2001 IRC section 6654 estimated $ 618.78
tax penalty

1994 Oct. 15, 2001 Interest to assessment date $ 11,027.80

1994 March 27, 2006 IRC section 6651(a)(2)-(3) $ 2,981.00
failure to pay penalty

1995 Oct. 15, 2001 Tax by examination $ 15,027.00

1995 Oct. 15, 2001 IRC section 6651(a)(1) failure $ 3,756.75
to file penalty

1995 Oct. 15, 2001 IRC section 6654 estimated $ 814.82
tax penalty

1995 Oct. 15, 2001 Interest to assessment date $ 11,029.95

1995 March 27, 2006 IRC section 6651(a)(2)-(3) $ 3,756.75
failure to pay penalty

1996 Oct. 15, 2001 Tax by examination $ 16,268.00

1996 Oct. 15, 2001 IRC section 6651(a)(1) failure $ 3,660.30
to file penalty

1996 Oct. 15, 2001 IRC section 6654 estimated $ 865.87
tax penalty

1996 Oct. 15, 2001 IRC section 6651(a)(2)-(3) $ 4,067.00
failure to pay penalty

1996 Oct. 15, 2001 Interest to assessment date $ 9,045.11

1997 Oct. 15, 2001 Tax by examination $ 10,594.00

1997 Oct. 15, 2001 IRC section 6651(a)(1) failure $ 2,383.65
to file penalty

1997 Oct. 15, 2001 IRC section 6654 estimated tax penalty $ 566.80

1997 Oct. 15, 2001 IRC section 6651(a)(2)-(3) $ 2,224.74
failure to pay penalty

1997 Oct. 15, 2001 Interest to assessment date $ 4,273.67

B. Transfer of Property

By late 2009, despite multiple notices and demands for payment, Mr. Sanders still refused to either remit payment or to acknowledge the IRS's collection efforts in any manner (Doc. 87-6, paragraph 5; Doc. 87-9). At that point, the IRS proceeded with collection efforts, including serving Mr. Sanders with a collection summons and then filing a civil action to enforce the summons (Doc. 87-4, paragraphs 6, 7 and pp. 11-15; Doc. 87-9). See also United States v. Frankie Sanders, Case No. 10-cv-358-WDS-SCW (S.D. Ill.). As part of the enforcement action, Mr. Sanders was questioned under oath by an IRS agent on August 2, 3, and 16, 2010 (see Doc. 87-4, paragraph 8 and pp. 19-106, 107-138). Mr. Sanders also produced documents for the IRS agent to examine, including trust documents, bank statements, title documents, and other business records (Doc. 87-4, paragraphs 9, 10 and pp. 2, 138-74; Doc. 87-5). While none of those documents shed any light on Mr. Sanders's taxable income from 1991 through 1997, the documents were still of some value -- from those documents, the Government learned that, after the IRS began its audit of his finances, ownership of the Fayette farm and the Montgomery farm was transferred into two trusts (Doc. 87-1, paragraph 51).

The first trust, the Y&K Leasing Trust, was created on September 16, 1999 (Doc. 87-1, paragraph 52, Doc. 87-4, pp. 139-174). Mr. Sanders obtained the trust documents from Thomas Magro, a fellow tax protestor (Doc. 87-1, paragraph 51; Doc. 87-4, p. 102). 10 The documents purportedly created something called a "Pure Trust" through which a citizen can elect to be governed by common law and to be exempt from legislative enactments like the Internal Revenue Code ("IRC") (Doc. 87-1, paragraph 55; Doc. 87-4, pp. 139-74; Doc. 87-5, pp. 1-65). Mr. Sanders and his two sons, Eric and Jeffrey, were named trustees of the Trust (Doc. 87-4, pp. 146, 165, 169-172). No beneficiaries were named (see id. at pp. 139-174). It appears that at the time the trust documents were executed, only personal property items were placed in trust (Id. at p. 167). 11 No real estate was placed in trust (Id. at p. 166). Approximately two weeks after the trust was created, however, Mr. Sanders recorded a deed in Montgomery County, Illinois, purporting to transfer ownership of the Montgomery farm from himself to the Y&K Leasing Trust (Doc. 87-1, paragraph 53; Doc. 87-10, p. 221).

The second trust, the Triple S Family Trust, was created by Genevieve Sanders, on November 8, 2002, with the assistance of attorney Jerold Barringer, a tax protestor who routinely represents other tax protestors (Doc. 87-1, paragraph 60; Doc. 87-5, pp. 66-90). 12 The documents purportedly created a "Pure Common Law Trust Organization" that is exempt from the laws and regulations applicable to a corporation, partnership, trust, grantor trust, or any other type, class, or form of business organization or entity (Doc. 87-5, pp. 68-69). Under the terms of the trust, the Fayette farm was to be held in trust (Doc. 87-5, p. 87). The same day the trust was created, Genevieve Sanders recorded a deed in Fayette County, Illinois, transferring ownership of the Fayette farm from herself to the Triple S Family Trust (Doc. 87-1, paragraph 60; Doc. 87-10, pp. 195-96).

Frankie Sanders was named as a trustee of the Triple S Family Trust, and Eric and Jeffrey Sanders were named as his successor trustees (Doc. 87-1, paragraph 61; Doc. 87-5, pp. 84, 89). Genevieve was also named as a trustee, but no successor trustees were named for her (Doc. 87-1, paragraph 61; see Doc. 87-5, pp. 85, 89). 13 According to the trust instrument, the trustees held all legal and equitable title and had complete management and control of the property held in trust (Doc. 87-5, pp. 68-69, 73-74); they were the "absolute owners of" the trust property (Id. at p. 73). The trust instrument also authorized the issuance of 1,000 trust units to investors, to be evidenced by Trust Certificates for a given number of units (Id. at pp. 75-76). The Certificate holders did not have "any legal or equitable title in or to" the trust property, and they did not "have any right to manage or control the destiny, property, affairs, or business" of the trust (Id. at pp. 76, 77). Instead, the Certificate holders were entitled to a portion of the income or surplus earned, and those payments were made as the trustees deemed it "proper and advisable" (Id. at p. 77). All 1,000 trust certificate units were purchased by Frankie Sanders for $ 10 (Id. at p. 83).

C. The Tax Liens

In August 2010, the Government recorded a federal tax lien in Montgomery County, Illinois, with respect to the Montgomery farm (Doc. 87-10, p. 223). This notice identified Frankie Sanders as the taxpayer (Id.). By then Mr. Sanders's tax liability had grown to $ 237,913 (Id.). Two other notices were filed against the Montgomery farm in April 2011 identifying the taxpayers as "Eric and Karen Sanders as Nominees of Frankie Sanders" and Y&K Leasing; Frankie Sanders, Trustee; Frankie Sanders, Beneficiary; as Nominee of Frankie Sanders" (Doc. 87-10, pp. 224, 225). All three notices were refiled in October 2011 (Doc. 87-10, pp. 226-35).

In April 2011, the Government also recorded a federal tax lien in Fayette County, Illinois, with respect to the Fayette farm in the amount of $ 237,949 (Doc. 87-10, p. 202). This notice identified the taxpayers as "Triple S Family Trust; Frankie Sanders, Trustee; Frankie Sanders, Beneficiary; as Nominee of Frankie Sanders" (Id.). This notice was refiled in October 2011 as two separate notices -- one for $ 217,907 and one for $ 20,043 (Doc. 87-10 pp. 203-06).

By January 31, 2015, due to accruing interest on the unpaid taxes and penalties, Mr. Sanders's total tax liability for the years 1991 through 1997 had ballooned to $ 441,845.75 (Doc. 87-6; Doc. 87-8, pp. 131-37). To date, he has not made any voluntary payments towards his tax liability (Doc. 87-6, paragraph 5).

Tax Year Balance Due as of January 19, 2012
___________________________________________________

1991 $ 47,813.68
1992 $ 75,475.74
1993 $ 94,633.66
1994 $ 55,462.59
1995 $ 64,457.28
1996 $ 65,097.98
1997 $ 38,904.82
TOTAL $ 441,845.75

PROCEDURAL HISTORY

The Government filed this collection lawsuit on October 11, 2011 (Docs. 1, 2). Mr. Sanders was initially represented by attorney Jerold Barringer. Mr. Barringer was terminated as Mr. Sanders's attorney in December 2012, however, because he was suspended from practicing in this district (Doc. 35). Since then, Mr. Sanders has represented himself. For over four years, this case languished on the Court's docket due almost exclusively to Mr. Barringer and Mr. Sanders's obstructionist behavior that is classic of the tax-protestor movement: they made ever-changing, nonsensical arguments as to why Mr. Sanders does not have to pay taxes, they resisted discovery then made empty promises to produce documents, they refused to answer the Government's questions with any candor, and they refused to obey orders of this Court. 14

The Court wants to highlight a few of Mr. Sanders's actions, which are of particular consequence at this stage of the litigation for reasons that will become apparent later in this Order. First, during the course of discovery, the Government requested and the Court ordered Mr. Sanders to produce financial records for the Fayette farm, the Montgomery farm, the Y&K Leasing Trust, and the Triple S Family Trust (Doc. 87-10, paragraphs 3, 5 and pp. 5-27; Doc. 58; Doc. 65; Doc. 68). To date, Mr. Sanders has produced nothing responsive to the Court's order.

On March 26, 2012, the Government also served Mr. Sanders with requests to admit the accuracy of the income tax assessments for 1991 through 1997 (Doc. 87-10, paragraphs 6-10 and pp. 58-70). On October 9, 2012, five months after the response deadline had expired, Mr. Barringer sent responses to the Government via electronic mail (Id.). Mr. Barringer had not, however, requested an extension of time to respond, and the Government had not consented in writing to service by electronic means (Id.). In the responses, Mr. Barringer denies that the Government "had the authority to make such assessment[s]" and asserts that the assessments are "not accurate" (Id.).

The Government served Mr. Sanders on January 24, 2013, with a second set of requests to admit that he is the sole owner of the Fayette farm and the Montgomery farm (Doc. 87-10, paragraphs 11-13 and pp. 71-74). To date, Mr. Sanders has not responded (Id.).

On March 7, 2015, the Government filed a motion for summary judgment seeking the relief described above. See supra p. 2. Mr. Sanders's response to the motion for summary judgment was originally due on April 9, 2015, but he was given two extensions of time totaling four months (Docs. 87, 91, 93). Mr. Sanders then requested an additional ninety days to respond because he did not have an attorney and he needed more time to process the 700-plus pages of evidence submitted by the Government (Doc. 94). His request was denied because his reasons for needing the extension of time were disingenuous, and the undersigned was out of patience with his delay tactics (Doc. 96). Shortly thereafter, Mr. Sanders filed a one-page response in which he claimed that he had completed "a Revocation of Election and removed himself from any claims by the IRS that he is a taxpayer" (Doc. 99). The attached thirty-page "Revocation of Election" declares that Mr. Sanders has revoked his status as a taxpayer (Doc. 99-1).

DISCUSSION

A. Summary Judgment Standard

The standard applied to summary judgment motions under Federal Rule of Civil Procedure 56 is well-settled and has been succinctly stated as follows:

Summary judgment is appropriate where the admissible
evidence shows that there is no genuine dispute as
to any material fact and that the moving party is
entitled to judgment as a matter of law. A "material
fact" is one identified by the substantive law as
affecting the outcome of the suit. A "genuine issue"
exists with respect to any such material fact . .
. when "the evidence is such that a reasonable jury
could return a verdict for the nonmoving party."
On the other hand, where the factual record taken
as a whole could not lead a rational trier of fact
to find for the non-moving party, there is nothing
for a jury to do. In determining whether a genuine
issue of material fact exists, we view the record
in the light most favorable to the nonmoving party.

Bunn v. Khoury Enterprises, Inc., 753 F.3d 676, 681 (7th Cir. 2014) (citations omitted).

In this case, Frankie Sanders's response to the Government's motion for summary judgment is essentially a non-response. He did not dispute any of the Government's material facts (see Doc. 99), and consequently, those facts are deemed admitted to the extent they are properly supported by record evidence. FED. R. CIV. P. 56(e); Keeton v. Morningstar, Inc., 667 F.3d 877, 884 (7th Cir. 2012) (citations omitted). Mr. Sanders also did not dispute any of the Government's arguments (see Doc. 99). This failure, however, does not automatically result in judgment for the Government. Gerhartz v. Richert, 779 F.3d 682, 685-86 (7th Cir. 2015); Keeton, 667 F.3d at 884 (citations omitted). The Government must still demonstrate "that judgment is proper as a matter of governing law." Gerhartz, 779 F.3d at 686 (citations omitted). And the Court must still view all of the facts asserted by the Government in the light most favorable to Mr. Sanders and draw all reasonable inferences in his favor. Keeton, 667 F.3d at 884 (citations omitted).

B. Relevant Tax Principles

"All individuals, natural or unnatural, must pay federal income tax on their wages," United States v. Sloan, 939 F.2d 499, 501 (7th Cir. 1991). Generally, individuals self-report their income tax liability for a given year by filing a tax return. See Gyorgy v. Comm'r, 779 F.3d 466, 472 (7th Cir. 2015) (citing I.R.C. section 6011(a)). When an individual fails to file an income tax return, however, a tax deficiency arises. Kanter v. Comm'r, 590 F.3d 410, 418 (7th Cir. 2009). Once the IRS determine the amount of the deficiency, it must send the individual a notice identifying the amount owed. Gyorgy, 779 F.3d at 472 (citing I.R.C. section 6212(a) and 6213(a)). The individual then has ninety days from the date the notice was mailed to contest the IRS's deficiency determination by filing a petition in the tax court. Gyorgy, 779 F.3d at 472 (citing I.R.C. section 6213(a), 6214(a)). If the individual does not file a timely petition with the tax court, then the deficiency "shall be assessed, and shall be paid upon notice and demand." Gyorgy, 779 F.3d at 472 (citing I.R.C. section 6213(c)).

"An 'assessment' amounts to an IRS determination that a taxpayer owes the Federal Government a certain amount of unpaid taxes." United States v. Fior D'Italia, Inc., 536 U.S. 238, 242 (2002). A tax assessment is made "by recording the liability of the taxpayer in the office of the Secretary in accordance with rules or regulations prescribed by the Secretary." I.R.C. section 6203. In other words, the assessment is "essentially a bookkeeping notation" in the IRS's books "establish[ing] an account against the taxpayer on the tax rolls." Laing v. United States, 423 U.S. 161, 171 n.13 (1976); Wadleigh v. Comm'r, 134 T.C. 280, 289 (T.C. 2010) ("A person's liability to pay a tax is established by assessment, which is the formal recording of a liability in the records of the Commissioner."); United States v. Buckner, 264 B.R. 908, 913 (N.D. Ind. 2001) ("An assessment reflects the I.R.S.'s judgment of what taxes are owed by the taxpayer as recorded on the I.R.S.'s books of account."); WILLIAM D. ELLIOT, FED. TAX COLLECTIONS, LIENS AND LEVIES, paragraphs 1.02, 2.03 available at 1999 WL 629195 ("The assessment . . . is nothing more than the ministerial acts of a Service official signing his or her name to an assessment register.") Nowadays, an assessment is just a computer entry. Meyer v. Comm'r, 106 T.C.M. (CCH) 599, at *3 (T.C. 2013).

After the assessment is made, the Government must demand payment from the taxpayer. I.R.C. section 6303(a). If the individual still does not pay after receiving the demand for payment, a tax lien in "the amount so assessed" automatically attaches to all property or rights to property belonging to the taxpayer. Gyorgy, 779 F.3d at 472 (citing I.R.C. section 6321); I.R.C. section 6322; ELLIOT at paragraph 1.02, available at 1999 WL 629195 ("The federal tax lien arises upon assessment, notice and demand, and failure to pay the tax liability.") To secure its lien against other creditors, the IRS can file a notice of the lien with the appropriate state or local government office. Gyorgy, 779 F.3d at 472 (citing I.R.C. section 6323(a), (f)). The IRS must then inform the taxpayer that it filed the lien notice. Gyorgy, 779 F.3d at 472 (citing I.R.C. section 6320(a)).

Interest begins to accrue on federal tax liabilities on the date the tax is originally due. I.R.C. section 6601(a), 6621. The interest continues to accrue so long as the liabilities remain unpaid. I.R.C. section 6601(a); ELLIOT at paragraph 5.03, available at 1999 WL 629223.

C. Analysis

The Government argues that this Court should grant its motion for summary judgment because there is no genuine dispute as to any material fact concerning Mr. Sanders's liability for the tax debts at issue, the validity of the federal tax liens, or the right of the United States to enforce those liens against the Fayette farm and Montgomery farm.

1. Reduction of the Tax Assessments to Judgment

The Government first seeks to reduce to judgment its assessments against Mr. Sanders for unpaid taxes, penalties, and interest.

In an action to collect taxes from an individual, the initial burden is on the Government to show what taxes are due. See, e.g., Nakano v. United States, 742 F.3d 1208, 1211 (9th Cir. 2014) (citing Oliver v. United States, 921 F.2d 916, 919 (9th Cir. 1990)); United States v. Sarubin, 507 F.3d 811, 816 (4th Cir. 2007). "That burden is satisfied by the IRS's 'deficiency determinations and assessments for unpaid taxes,' which are presumed correct 'so long as they are supported by a minimal factual foundation.'" In re Olshan, 356 F.3d 1078, 1084 (9th Cir. 2004) (quoting Palmer v. I.R.S., 116 F.3d 1309, 1312 (9th Cir. 1997)); United States v. Fior D'Italia, Inc., 536 U.S. 238, 242 (2002) ("It is well established in the tax law that an assessment is entitled to a legal presumption of correctness. . . ."); see also United States v. White, 466 F.3d 1241, 1248 (11th Cir. 2006) ("In reducing an assessment to judgment, the Government must first prove that the assessment was properly made."). The legal presumption of correctness "shifts the burden of proof to the taxpayers to show that the determination is incorrect." Palmer, 116 F.3d at 1312; Pittman v. Comm'r, 100 F.3d 1308, 1313 (7th Cir. 1996). "To rebut the presumption of correctness, the taxpayer has the burden of proving that the assessment is 'arbitrary or erroneous.'" United States v. Stonehill, 702 F.2d 1288, 1294 (9th Cir. 1983) (quoting Helvering v. Taylor, 293 U.S. 507, 515 (1935)).

As the Government candidly acknowledges, the accuracy of its assessments in this case is not perfect because, due to the lack of complete records, it had to reconstruct Mr. Sanders's income through indirect means (Doc. 87-2). Any imperfections, however, are Mr. Sanders's fault. That is because it is the taxpayer's responsibility "to keep adequate records from which their correct tax liability may be determined." JPMorgan Chase & Co. v. Comm'r, 530 F.3d 634, 638-39 (7th Cir. 2008) (citing I.R.C. section 6001). When the taxpayer has failed to maintain adequate records of income, and other available records are not sufficient to establish income, the IRS is authorized to reconstruct the taxpayer's income using indirect methods in order to determine the amount of any deficiency. McHan v. Comm'r, 558 F.3d 326, 332 (4th Cir. 2009); Williams v. Comm'r, 999 F.2d 760, 763 (4th Cir. 1993) (citing Holland v. United States, 348 U.S. 121, 130 (1954)). See also Kanter v. Comm'r, 590 F.3d 410, 426 (7th Cir. 2009) ("The Commissioner is empowered to use several methods to reconstruct a taxpayer's taxable income."); Palmer, 116 F.3d at 1312 ("The Commissioner . . . has wide discretion in choosing an income-reconstruction method.") The IRS's estimate will still carry a presumption of correctness so long as "the method used to make the estimate is a 'reasonable' one." Fior D'Italia, 536 U.S at 243.

Here, the Government introduced sufficient evidence to meet its initial burden and trigger the legal presumption of correctness afforded to tax assessments. In particular, the Government submitted the working papers, notes, and signed declarations from the agents who conducted the audit of Frankie Sanders and his farm operations, as well as deposition testimony from Mr. Sanders and his son. This evidence demonstrates that Mr. Sanders received tens of thousands of dollars of unreported income from 1991 through 1997. The Government also submitted the deficiency notice generated as a result of the investigation along with audit reports. This evidence shows that statistical data was used to estimate Mr. Sanders's adjusted gross income, which is a reasonable method for reconstructing income. See Fior D'Italia, 536 U.S. at 243 (citing Pollard v. Comm'r, 786 F.2d 1063, 1066 (11th Cir. 1986) (upholding estimate using statistical tables reflecting cost of living where taxpayer lived)); Palmer, 116 F.3d at 1312 ("Courts have long held that the IRS may rationally use statistics to reconstruct income where taxpayers fail to offer accurate records.") The audit reports further demonstrate how Mr. Sanders's tax liabilities and penalties were calculated. Finally, the Government submitted computerized account transcripts, supplemented by declarations from IRS personnel, documenting the assessment of income tax and penalties against Mr. Sanders and the accrual of interest. Therefore, the evidence creates a presumption that the assessments were properly made and are valid.

Consequently, Mr. Sanders bears the burden of proving the assessment is incorrect, which he quite obviously cannot do. First, as a result of his failure to timely respond to the Government's request to admit the accuracy of the 1991-1997 income tax assessments, those matters are deemed admitted. FED. R. CIV. P. 36(a)(3). Even if that were not the case, Mr. Sanders has not come forward with an alternative calculation regarding his tax liability or a reasonably complete set of financial records that would support any alternative calculation. In fact, during the course of discovery in this matter, Mr. Sanders refused to produce any financial records that would have allowed the Government to make an alternative assessment. Therefore, Mr. Sanders has failed to rebut the presumption of correctness applied to the assessment of his tax deficiency.

In conclusion, based on the presumption of correctness that attaches to the IRS's assessment, and Mr. Sanders's complete failure to dispute it, let alone to overcome the presumption, the Court must conclude that the Government is entitled to judgment as a matter of law on Mr. Sanders's tax liabilities pertaining to tax years 1991 through 1997. The motion for summary judgment is granted in the amount of the deficiency (including interest and statutory penalties) for tax years 1991 through 1997 -- $ 441,845.75 -- plus the additional interest and statutory penalties accruing from February 1, 2015.

2. Enforcement of the Tax Liens

A federal tax lien arises at the time of the tax assessment and continues until the assessment, or a judgment arising from the assessment, is satisfied or expires. I.R.C. section 6322. The lien extends to include "any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto." I.R.C. section 6321. The lien attaches to all of the taxpayer's "property and rights to property, whether real or personal." I.R.C. section 6321; United States v. Swan, 467 F.3d 655, 656 (7th Cir. 2006); United States v. Troyer, 983 F.2d 1074 (7th Cir. 1992). "The statutory language 'all property and rights to property,' appearing in section 6321 is broad and reveals on its face that Congress meant to reach every interest in property that a taxpayer might have." United States v. National Bank of Commerce, 472 U.S. 713, 719-720 (1985), cited in Drye v. United States, 528 U.S. 49, 56 (1999). The lien attaches not only to property owned by the taxpayer on the date of assessment, but also to property acquired at any time after assessment. Glass City Bank v. United States, 326 U.S. 265, 267 (1945). The Government can bring suit to enforce its tax liens against property owned by the taxpayer through the sale of such property. I.R.C. section 7403.

Here, the federal tax liens associated with Mr. Sanders's income tax liabilities for the years 1991-1997 arose and attached to his property on October 15, 2001, the date of the IRS assessments. It is undisputed that Mr. Sanders has not paid any portion of what he owes in back taxes, penalties, and interest. Consequently, the federal tax liens are valid and remain attached to his property. The critical question in this case is whether that property includes the Fayette farm and the Montgomery farm. To answer this question, the Court must determine whether Frankie Sanders had any rights to the farms. If the answer is yes, then the Government can seize the farm to satisfy its tax claim against Mr. Sanders.

a. Montgomery Farm and the Y&K Leasing Trust

As previously discussed, Frankie Sanders created the Y&K Leasing Trust and purportedly transferred ownership of the Montgomery farm from himself to the Trust (Doc. 87-10, p. 221). The Government first contends that Mr. Sanders is the real owner of the Montgomery farm because the Y&K Leasing Trust is a sham trust (Doc. 87-2, p. 13). The Government sets forth a number of facts in support of this argument. For example, the Government noted that trust instrument did not identify a beneficiary; the trust does not have a bank account and has never paid out or received any money; the trust does not have a general ledger accounting system or an accountant; the trust does not have a lawyer; and tax returns have never been prepared or filed for the trust (Doc. 87-2, p. 13). The Government did not, however, set forth the legal standard for determining the existence of a sham trust, and thus the Court has no framework for evaluating the facts set forth by the Government. Consequently, the Court declines to address the merits of this argument. See, e.g., United States v. Holm, 326 F.3d 872, 877 (7th Cir. 2003).

In the alternative, the Government argues that the Y&K Leasing Trust is Mr. Sanders's nominee, thus subjecting the Montgomery farm to the tax liens assessed against him (Doc. 87-2, p. 14). "A nominee is one who holds bare legal title to property for the benefit of another." Scoville v. United States, 250 F.3d 1198, 1203 (8th Cir. 2001) (citing Black's Law Dictionary (7th ed. 1999)). In other words, a nominee is "someone who has legal title [to the property] when, in substance, the taxpayer enjoys the benefits of ownership." United States v. Wesselman, 406 F. App'x 64, 65 (7th Cir. 2010). WILLIAM D. ELLIOT, FED. TAX COLLECTIONS, LIENS AND LEVIES, paragraph 9.10, available at 1999 WL 629255 ("The nominee doctrine . . . seeks an answer to the question of whether the taxpayer has used a legal fiction of transferring title to property to another while retaining the benefits of true ownership.") Federal tax liens attach to property belonging to the taxpayer and also to property held by the taxpayer's nominees. Wesselman, 406 F. App'x at 65 (citing G.M. Leasing Corp. v. United States, 429 U.S. 338, 350-51 (1977)).

To determine whether a trust serves as a taxpayer's nominee, district courts in the Seventh Circuit have examined several factors including: (1) whether the nominee paid adequate consideration for the property; (2) whether the property was placed in the name of the nominee in anticipation of a lawsuit or occurrence of liabilities while the transferor continues to exercise control over the property; (3) whether there is a close relationship between the nominee and the taxpayer; (4) the failure to record the conveyance; (5) whether the transferor retained possession of the property; and (6) whether the transferor continued to enjoy the benefits of the transferred property. United States v. Cohen, 930 F. Supp. 2d 962, 979 (C.D. Ill. 2013); United States v. Northern States Investments, Inc., 670 F. Supp. 2d 778, 788-89 (N.D. Ill. 2009); United States v. Wesselman, No. 05-CV-4152-JPG, 2010 WL 1654899, at *4 (S.D. Ill. Apr. 22, 2010), aff'd, 406 F. App'x 64 (7th Cir. 2010). "Additional considerations include whether the taxpayer used the putative nominee's funds to satisfy his personal expenses, whether the putative nominee interfered in any way with the taxpayer's use of the property, whether the taxpayer held himself out as the owner of the property, whether the taxpayer pays real estate taxes and other maintenance charges, and whether the taxpayer pays the fair rental value of the property." N. States Investments, Inc., 670 F. Supp. 2d at 789 (citations omitted).

Based on the relevant factors, no reasonable fact-finder could conclude that the Y&K Leasing Trust was not Frankie Sanders's nominee. The evidence establishes that Frankie Sanders paid over $ 400,000 for the Montgomery farm; however, there is no evidence that in 1999, when the Y&K Leasing deed was recorded, consideration of any substance passed to Mr. Sanders in exchange for the Montgomery Farm. Additionally, Mr. Sanders placed the Montgomery farm in trust after he knew the IRS was conducting an audit of his taxes. There is also a close relationship between Mr. Sanders and the trust -- he was a trustee along with his two sons. And it is clear that Mr. Sanders retains possession and control of the farm. After the purported transfer of the farm, Mr. Sanders continued working on it full-time; he reduced his working hours only in recent years due to his advancing age. He also continued to benefit from the income produced by the farm -- in 1996, Eric began receiving ten to fifteen percent of the crop sales, which he continues to receive to this day, and the remaining income goes to Mr. Sanders. Consequently, the Court must conclude that the Y&K Leasing Trust was merely Mr. Sanders's nominee. Also, as a result of his failure to timely respond to the Government's request to admit that he is the true owner of the Montgomery farm, that matter is deemed admitted. FED. R. CIV. P. 36(a)(3).

Accordingly, the Government is entitled to judgment as a matter of law that the federal tax liens attached to the Montgomery farm on October 15, 2001.

3. The Fayette Farm and the Triple S Family Trust

As previously discussed, Genevieve Sanders created the Triple S Family Trust and transferred ownership of the Fayette farm from herself to the Trust (Doc. 87-10, pp. 66-90, 195-96). The Government contends that after Genevieve Sanders's death, Frankie Sanders held both legal title and equitable title to the Fayette farm, and therefore, the trust ceased to exist (Doc. 87-2, pp. 12-13). Thus, according to the Government, Frankie Sanders is the true owner of the Fayette farm and the federal tax lien attached to the farm (Id.). The Government does not make any arguments regarding the creation of the trust or the validity of the trust prior to Genevieve Sanders's death. Accordingly, the Court will not examine those issues. The Court will keep its analysis cabined to the argument made by the Government.

In a classic trust situation, the trustee holds legal title to the trust property for the benefit of the beneficiaries, who hold the equitable title to the trust property pursuant to the trust agreement. See, e.g., Culicchia v. Hupfauer, 884 N.E.2d 730, 733 (Ill. App. Ct. 2008); In re Estate of Mendelson, 697 N.E.2d 1210, 1212 (Ill. App. Ct. 1998); 35 ILL. LAW AND PRAC. TRUSTS section 68. "[O]rdinarily a trust cannot exist when the legal and beneficial interest are in the same person." 35 ILL. LAW AND PRAC. TRUSTS section 7, 78. Consequently, it follows that the sole beneficiary of the trust cannot be the sole trustee. UNIF. TRUST CODE section 402(a)(5) ("A trust is created only if . . . the same person is not the sole trustee and sole beneficiary."); RESTATEMENT (FIRST) OF TRUSTS section 99(5) (1935) ("The sole beneficiary of a trust cannot be the sole trustee of the trust."); RESTATEMENT (THIRD) OF TRUSTS section 32, cmt. b (2003); Wilson v. Harrold, 123 N.E. 563, 564 (1919) ("It is undoubtedly true that the same person cannot be at the same time sole trustee and sole beneficiary of the same identical interest. . . .") If one person acquires legal and equitable title, the trust terminates and the beneficiary holds the property free of trust. RESTATEMENT (THIRD) OF TRUSTS section 69 cmt. b (2003); 35 ILL. LAW AND PRAC. TRUSTS section 77; 19 Ill. PRAC., ESTATE PLANNING & ADMIN. section 228:7 (4th ed.).

Although the trust instrument did not explicitly identify any beneficiaries, based on the terms of that instrument, it appears that the beneficiaries of the Triple S Family Trust were the certificate holders. See, e.g., 19 ILL. PRAC., ESTATE PLANNING & ADMIN. section 215:1 (4th ed.) ("A beneficiary of a trust is any person who is entitled, or who may become entitled, to some part or all of the income or principal, or both, of the trust.") As the only certificate holder, Frankie Sanders was the sole beneficiary of the Triple S Family Trust. And he became the sole trustee of the Triple S Family Trust when Genevieve Sanders died, because the trust instrument did not provide for any successor trustees for her. Mr. Sanders has not given any indication or set forth any evidence that he declined to serve as sole trustee following the death of his mother. Accordingly, as of Genevieve Sanders's death on January 27, 2007, Frankie Sanders held the legal interest in the Fayette farm, as well as the equitable interest. See RESTATEMENT (THIRD) OF TRUSTS section 69 cmt. b (2003). There is no evidence that this did not encompass the whole trust interest. Consequently, the Triple S Family Trust terminated, and Frankie Sanders held the Fayette farm free of trust. And, once again, as a result of Mr. Sanders's failure to timely respond to the Government's request to admit that he is the true owner of the Fayette farm, that matter is deemed admitted. FED. R. CIV. P. 36(a)(3).

Accordingly, the Court must conclude that Frankie Sanders has an interest in the Fayette farm, and the Government is entitled to judgment as a matter of law that the federal tax liens attached to the Fayette farm on October 15, 2001.

CONCLUSION

The motion for summary judgment filed by the Government (Doc. 87) is GRANTED.

IT IS HEREBY ORDERED and ADJUDGED that:

1. Frankie Sanders is liable to the United States in the amount of $ 441,845.75 for income tax liabilities pertaining to years 1991 through 1997, itemized as follows:

Tax Year Balance Due as of January 19, 2012
___________________________________________________

1991 $ 47,813.68
1992 $ 75,475.74
1993 $ 94,633.66
1994 $ 55,462.59
1995 $ 64,457.28
1996 $ 65,097.98
1997 $ 38,904.82
TOTAL $ 441,845.75

Interest has accrued and shall continue to accrue on this adjudged liability on and after February 1, 2015, as specified in 26 U.S.C. section 6601, 6621-6622, 28 U.S.C. section 1961(c), along with all other statutory additions.

2. The Triple S Family Trust dissolved when Genevieve Sanders passed away, and Frankie Sanders is the sole owner of the "Fayette farm," located at RR 1, Box 136, Ramsey, Illinois, Fayette County, and more specifically described as follows:

The West Half of the Northwest Quarter of Section
27, Township 9 North, Range 1 West of the Third Principal
Meridian, in Fayette County, Illinois, excepting
all coal underlying the same.

The Northwest Quarter (NW 1/4) of the Southwest Quarter
(SW 1/4) of Section Twenty-seven (27) and the Northeast
Quarter (NE 1/4) of be Southeast Quarter (SE 1/4)
of Section Twenty-eight (28), all in Township Nine
(9) North, Range One (1) West of the Third Principal
Meridian, in Fayette County, Illinois, excepting
all the coal below the depth of 125 feet beneath
the surface, situated in Fayette County, Illinois.

3. The Y&K Leasing Trust is Frankie Sanders's nominee with regard to the Montgomery farm, and he is the sole owner of the farm, more specifically described as follows:

The Southeast Quarter (SE 1/4) of the Northeast Quarter
(NE 1/4) of Section One (1) the East Half (E 1/2)
of the Northeast Quarter (NE 1/4) of the Southwest
Quarter (SW 1/4) of Section One (1); and the Southeast
Quarter (SE 1/4) of Section One (1) in Township Nine
(9) North, Range Two (2) West of the Third Principle
Meridian (3rd P.M.), Except all coal underlying said
premises as hereto for conveyed, subject to all public
and private roadways or easements as now located,
situated in the Township of Witt, Montgomery County,
Illinois.

Excluding the South Half (S 1/2) of the Southeast
Quarter (SE 1/4) of the Southeast Quarter (SE 1/4)
of the Southeast Quarter (SE 1/4) all in Section
One (1), Township Nine (9) North, Range two (2) West
of the Third Principal Meridian, situated in Montgomery
County, Illinois.

4. Under 26 U.S.C. section 6321-22, the amounts due, described above, constitute liens in favor of the United States upon all property and rights to property belonging to Frankie Sanders, including the Fayette farm and the Montgomery farm.

5. The federal tax liens upon the described real estate shall be enforced by sale of said property free and clear of all rights, claims, titles, liens, and interests of the parties, with the proceeds of sale to be distributed according to law.

6. The United States shall promptly file a motion and proposed order setting forth with particularity the sale procedure and distribution priorities for the described real estate.

7. Under Federal Rule of Civil Procedure 54(b), judgment is final for purposes of appeal as to above paragraphs 1 through 5, because there is no just reason to delay entry of final judgment on this portion of the case pending sale of the described real estate. The Clerk of Court is DIRECTED to enter judgment under Rule 54(b) of the Federal Rules of Civil Procedure in favor of the United States against Frankie Sanders in the amount of $ 441,845.75 plus interest, penalties, and other statutory additions that continue to accrue on this adjudged liability on and after February 1, 2015.

IT IS SO ORDERED.

DATED: February 18, 2016.

Nancy J. Rosenstengel
United States District Judge

FOOTNOTES:

/1/ As the Seventh Circuit warned, "Few people enjoy paying taxes . . . [but] taxpayers, even very frustrated taxpayers, should resist the false siren call of the tax protester movement." United States v. Engh, 330 F.3d 954, 956 (7th Cir. 2003). See also United States v. Ford, 514 F.3d 1047, 1053 (10th Cir. 2008) (describing tax protestor arguments as "patently frivolous"); Stearman v. C.I.R., 436 F.3d 533, 537 (5th Cir. 2006) (describing tax protestor arguments as "shopworn" and "universally rejected by this and other courts"); United States v. Cooper, 170 F.3d 691, 691 (7th Cir. 1999) (describing tax protestor arguments as "frivolous squared"); Crain v. C.I.R., 737 F.2d 1417, 1418 (5th Cir. 1984) (describing a tax protestor's appeal as "a hodgepodge of unsupported assertions, irrelevant platitudes, . . . legalistic gibberish, [and] spurious arguments").

/2/ At the time Milton and Genevieve Sanders bought the Fayette farm, its legal description was as follows:

The Northwest Quarter of the Southwest Quarter of
Section Twenty-seven and the Northeast Quarter of
the Southeast Quarter of Section Twenty-eight, in
Township Nine North, Range One West of the Third
Principal Meridian, excepting however all the coal
below the depth of 125 feet beneath the surface,
which has been heretofore conveyed.

(Doc. 87-10, p. 178). In 1977, an adjacent portion of land, with the following legal description, was quit claimed to Milton and Genevieve:

The West Half of the Northwest Quarter of Section
27, Township 9 North, Range 1 West of the Third Principal
Meridian, except all coal underlying same, in Fayette
County, Illinois.

(Doc. 87-10, p. 184)

/3/ Eric Sanders was born in 1969, and Jeffrey Sanders was born in 1971 (Doc. 87-1, paragraph 16)

/4/ At the time the Montgomery farm was deeded to Frankie Sanders, it had the following legal description:

The Southeast Quarter (SE 1/4) of the Northeast Quarter
(NE 1/4) of Section One (1) the East Half (E 1/2)
of the Northeast Quarter (NE 1/4) of the Southwest
Quarter (SW 1/4) of Section One (1); and the Southeast
Quarter (SE 1/4) of Section One (1) in Township Nine
(9) North, Range Two (2) West of the Third Principle
Meridian (3rd P.M.), Except all coal underlying said
premises as hereto for conveyed, Subject to all public
and private roadways or easements as now located,
situated in the Township of Witt, Montgomery County,
Illinois.

(Doc. 87-10, p. 218).

/5/ The legal description for the portion of the Montgomery farm deeded to Eric and Karen Sanders is as follows:

The South Half (S 1/2) of the Southeast Quarter (SE
1/4) of the Southeast Quarter (SE 1/4) of the Southeast
Quarter (SE 1/4) all in Section One (1), Township
Nine (9) North, Range two (2) West of the Third Principal
Meridian, situated in Montgomery County, Illinois.

(Doc. 87-10, pp. 219-20).

/6/ Eric Sanders later confirmed they grew crops on the Fayette farm and the Montgomery farm, including corn, soybeans, wheat, clover, and hay (Doc. 87-1, paragraphs 12, 15; Doc. 87-10, pp. 90-92, 100-101, 112-118). They also raised livestock, mainly beef cattle, on the Fayette farm (Doc. 87-1, paragraph 14; Doc. 87-10, pp. 90-92, 100-101, 112-118). Around 1996, they switched to producing hay only on the Fayette farm, which was primarily used to feed the cattle they were raising (Doc. 87-1, paragraph 13; Doc. 87-10, p. 117. See also Doc. 87-4, p. 115). The crops grown on the Montgomery farm were sold on the open market for cash (Doc. 87-10, p. 118).

/7/ Eric Sanders later confirmed that during the time period at issue -- 1991 to 1997 -- Mr. Sanders worked full-time on the Fayette and Montgomery farms (Doc. 87-10, pp. 92, 103-104, 109, 115). For a majority of that time, Eric Sanders also worked full-time on the farms, but he was not paid for his work (Id. at pp. 103-04, 108). Sometime in 1996, Eric started getting paid ten to fifteen percent of the crop sales from the Montgomery farm, which has resulted in an average annual income of approximately $ 30,000 (Id. at pp. 118-20). Jeffrey Sanders helped out periodically when he was able, but he never worked on the farms on a full-time basis (Id. at pp. 103-04, 136). Milton Sanders died in 1979 (Doc. 87-10, p. 75). Genevieve Sanders was 76 in 1991; she died in 2007 at the age of 91 (Id. at p. 76). There were no other employees on the farms (see id. at pp. 103-04, 115).

/8/ Figure rounded to the nearest dollar.

/9/ As proof of the assessments, the Government submitted "transcripts of account" (Doc. 87-6, paragraph 5, Doc. 87-8, pp. 85, 97, 103, 109, 115, 122, 227). These account transcripts are largely incomprehensible on their face to any non-IRS employee because almost every piece of information is represented by a code. With the help of the declarations from the IRS personnel (Doc. 87-6; 87-9) and the IRS's Transaction Codes Pocket Guide (available at https://www.irs.gov/pub/irs-utl/transac ... _guide.pdf), the Court was able to decipher the following information: the taxable year, the date the tax and penalties were assessed, and the amount assessed.

/10/ In 1997, Magro was sanctioned $ 200 by the Central District of Illinois after participating in two tax protest lawsuits within two years. LaRue v. United States, 959 F. Supp. 959, 961 (C.D. Ill. 1997). Magro also attempted to appear as counsel on behalf of Frankie Sanders in another tax case pending before the undersigned, even though Magro is not a licensed attorney. United States v. Frankie Sanders, 12-cv-96-NJR-SCW (S.D. Ill.) at Doc. 73, pp. 3-5, 8.

/11/ Schedule "B" attached to the trust instrument provides that "Other personal property: (such as tools, bank accounts, furniture, fixtures, and other per the attached inventory)" is included in the trust (Doc. 87-4, p. 167). There is no inventory in the record, however.

/12/ Jerold Barringer has been the subject of at least one case to enforce an IRS summons and one tax collection case. United States v. Barringer, Case No. 12-cv-3324-SEM-TSH (C.D. Ill.) (IRS enforcement action); United States v. Barringer, Case No. 14-3132 (C.D. Ill.) (tax collection action). Barringer represented Frankie Sanders in this matter until he was suspended from practicing in this district based on his suspension from the Tenth Circuit for making frivolous arguments in a tax-related case. In re: Barringer, 11-816 (10th Cir. 2011); 12-mc-78-DRH (S.D. Ill. 2012); 15-mc-45-MJR (S.D. Ill. 2015). Barringer was also sanctioned $ 10,000 by the Seventh Circuit for the same reason and suspended for six months by the Illinois Supreme Court, which led to his suspension in the Eighth Circuit, the Third Circuit, and a number of district courts. United States v. Patridge, 507 F.3d 1092, 1095 (7th Cir. 2007) (remarking that Barringer "performed below the standard of a pro se litigant; we have serious doubt about his fitness to practice law. The problem is not simply his inability to distinguish between plausible and preposterous arguments. It is his disdain for the norms of legal practice . . . and the rules of procedure."); In re: Barringer, 15-9011 (8th Cir. 2015); 15-8069 (3d Cir. 2015); 15-mc-1008 (C.D. Ill. 2015); 15-mc-403-JFC (W.D. Penn. 2015); and 15-mc-50770-GER (E.D. Mich. 2015).

/13/ The documents states: "FRANK SANDERS, the first Trustee of this Trust Organization, and GENEVIEVE SANDERS, the second Trustee of this Trust Organization, do hereby designate as Successor Trustees, Eric Sanders of Nokomis, Illinois and Jeff Sanders of Kincaid, Illinois. . . . Each Successor Trustee will become a trustee of this Trust Organization upon the death, incapacity or resignation of Frank Sanders as a Trustee of this Trust Organization. . . ." (Doc. 87-5, p. 89).

/14/ The case was originally assigned to Senior District Judge William D. Stiehl, who has since retired and recently passed away. The case was reassigned to the undersigned District Judge on May 19, 2014 (see Doc. 69).

[morrand]

Frankie Sanders's appeal has been decided in the Seventh Circuit. It's probably not necessary to do more than to skip to the end:

We have reviewed Sanders’s remaining arguments, and none has merit. Sanders’s appeal is frivolous, and we give him 14 days to show cause why we should not impose a sanction of $4,000, the presumptive sanction for frivolous appeals by tax protesters. See Szopa v. United States, 460 F.3d 884, 887 (7th Cir. 2006).

AFFIRMED.

No luck there, either.

[notorial dissent]

I wouldn't want Posner on my Appeal bench unless I had a really good case. He eats the stupid ones for lunch otherwise.

[The Observer]

I wouldn't want Posner on my Appeal bench unless I had a really good case. He eats the stupid ones for lunch otherwise.

He could be our Judge Rooke!

[notorial dissent]

I wouldn't want Posner on my Appeal bench unless I had a really good case. He eats the stupid ones for lunch otherwise.

He could be our Judge Rooke!

Certainly some of his opinions have been joys to read. I would imagine he could/would slice and dice the issue quite thoroughly, effectively, and pithily.

[Jeffrey]

Defendant Frankie Sanders is a self-employed farmer. He has not, however, filed a federal income tax return or paid federal income taxes since at least 1991.

Aren't farmers heavily subsidized by the federal government?

[notorial dissent]

Depends on where they are and what they were/are farming or what kind of operation they are running. So answer is yes, no, maybe.

[.]

Depends on where they are and what they were/are farming or what kind of operation they are running. So answer is yes, no, maybe.

Totally true. Total subsidy payments of about 14 billion last year, which was a good hunk of total farm income of about 55 billion.

The biggest and most ridiculous "subsidy" in the pile is sugar, which isn't a direct subsidy, but rather an import limit that keeps domestic prices at about twice the world price and has for the last 80+ years. A devious indirect subsidy that penalizes all sugar consumers a few dollars each per year and some manufacturers many thousands of dollars each per year. Florida and Hawaii cane growers and sugar beet growers up north love it. We consumers are expected to shrug it off and we have, there's been no revolt.

Which is why a lot of companies who use a lot of sugar to manufacture their product (can you say candy and candy bars? e.g. Hershey?) are slowly moving their manufacturing to Mexico. As long as the ~100% domestic sugar price penalty remains they will continue to disintermediate the sugar price differential by slowly continuing to move to Mexico.

Direct cash subsidies from the Feds are maybe 7 billion, around 60% of that to corn. Rice, wheat, peanuts, cotton and soybeans get much smaller amounts, maybe 4-7% each. The rest goes to a few other minor crops like mohair/wool. (Calling Sam Donaldson, former ABC News reporter. Remember him? Mr. Mohair subsidy? Yeah, you can look up individual subsidy recipients. He caught a lot of flak back in the '80s when someone discovered that Sam had a mohair farm somewhere in New Mexico.)

It's all widely variable by year, so all the numbers are approximate.

And all of this has nothing to do with the idiot TP farmer of this thread, it's just a few miscellaneous factoids because I'm bored.