Thanks, mom and dad

United States v. Adent, No. 15-3554 (7th Cir. May 10, 2016).

Leonard and Joyce Adent owed the IRS back taxes, so the IRS put liens on the Adents’ property and sought to foreclose on the liens. The Adents’ son, Derek, jointly owned one of these properties with Leonard. Derek was an innocent party. He didn’t owe the IRS any taxes. But the district court still ordered the sale of the property he jointly owned with his dad. 

The Seventh Circuit affirms, holding that the district court acted within its discretion. Derek didn’t actually live on the property, so he won’t be losing his home. He’ll also get his half-interest back when the property is sold. 

The IRS’s interest in collecting back taxes has to win out over the interests of innocent third parties, at least in most cases. If an innocent owner’s interest in a property could prevent IRS foreclosure, scofflaws could evade taxes simply by jointly owning a piece of property with someone else. Still, if you were Derek, wouldn’t you be pretty angry with your parents?