Interesting Footnote to the Ed Brown Saga

[Dr. Caligari]

The U.S. District Court for New Hampshire holds that the Government cannot forfeit Ed Brown's gun collection, but must allow it to be sold for Ed's benefit.

Discussion of the case, and link to the judge's decision, here:
http://volokh.com/2010/04/14/the-second ... gs-clause/

[Dr. Caligari]

I should have added, these are only the guns he surrendered when he was first charged with tax evasion. The IEDs and guns he used in his standoff with the Feds are, presumably, forfeitable.

[Red Cedar PM]

The U.S. District Court for New Hampshire holds that the Government cannot forfeit Ed Brown's gun collection, but must allow it to be sold for Ed's benefit.

Discussion of the case, and link to the judge's decision, here:
http://volokh.com/2010/04/14/the-second ... gs-clause/

Sold for Ed's benefit? Forgive me for asking what may be a dumb question (liens and judgements are definitely not my area of expertise), but wouldn't any proceeds first go to satisfy outstanding tax debts? I have to think the value of Ed's property and assets do not exceed the amount of his tax liabilities.

[Demosthenes]

Ed's benefit was probably consumed by the outastanding storage fees on the guns. They were held at a commercial gun shop.

[LPC]

The U.S. District Court for New Hampshire holds that the Government cannot forfeit Ed Brown's gun collection, but must allow it to be sold for Ed's benefit.

Discussion of the case, and link to the judge's decision, here:
http://volokh.com/2010/04/14/the-second ... gs-clause/

Sold for Ed's benefit? Forgive me for asking what may be a dumb question (liens and judgements are definitely not my area of expertise), but wouldn't any proceeds first go to satisfy outstanding tax debts? I have to think the value of Ed's property and assets do not exceed the amount of his tax liabilities.

The short answer to your question is that the issue of federal tax liens was not before the court.

The longer answer to your question is that the court did *not* order the weapons sold for Brown's benefit, because Brown no longer owned them, having given them away before he was taken into custody.

The guns were delivered to a gun shop as a condition of Brown's bail during his first trial on currency charges. According to the court:

On April 21, 2007, while a fugitive, Brown signed and delivered a letter to the claimant, Bernhard Bastian, which stated, in relevant part:

. . . in the event of my death or incarceration or in any circumstances which prohibit my repossessing my property (guns, ammunition, firearms or any other items held at Riley’s Sport Shop, Inc., at 1575 Hooksett Road, Hooksett, New Hampshire) all that property in its
entirety is to be given to Bernhard Bastian, Weare, New Hampshire.

After Brown was taken into custody, Bastian went to the gun shop and claimed the weapons, but the shop owner refused to turn them over without a court order. A magistrate judge issued an order allowing transfer, the government did not object, and the weapons were transferred. Then, more than a year later, the government asked that the weapons be forfeited and the court denied that request, holding that Bastian was the legal owner and that the government's request was both too late and not allowed by law.

But that doesn't address the question of tax liens. If there were taxes assessed and unpaid before Brown signed and delivered the deed of gift (which is how I would describe the letter to Bastian), then there would be a federal tax lien on the guns. Furthermore, the lien would continue to apply to Bastian, notwithstanding the lack of any notice of federal tax lien, if the transfer were gratuitous (which it seems to be).

Whether the government will attempt to enforce the tax lien is another story.

There's also the issue of whether the transfer of the guns might be set aside as a fraudulent transfer under state law, but I'm not going to get into that now. (I've lately been working on articles and CLE programs about insolvent estates, so tax liens and fraudulent transfers have been on my mind a lot.)