This page includes posts from August
24-September 6, 2003 in the usual reverse
order. Each posting on the home page is perma-linked to these
Many, many years ago
the National Lampoon did a running
gag about my state.
Just about every
month it would advise its readers (somewhere in the small print) that four
out of five scientists know that the capital of Delaware is
That percentage is
probably a bit higher than the general U.S. population would score.
Besides being the
state capital, as well as the site of
Dover AFB, where Sgt. Stryker and
others served with distinction, there are many reasons why Dover is an
On the other hand,
the restaurants have never been much of a reason to visit Our Capital City.
I don’t mean to be
disrespectful--just honest. In fact, I’m sure that the Sarge will back me
up on this.
On the rare occasions
that most folks might talk about food in Dover, the usual discussion
centers on the amazingly large collection of fast food or other chain
operations that dot the small city’s landscape, including but by no means
limited to Red Lobster, Olive Garden, KFC, Burger King, Friendly’s, Hardees,
McDonalds, Pizza Hut, Dairy Queen, Lone Star, Ruby Tuesday, Subway, TGI
Friday’s, Wendy’s, Uno Pizzeria, Arby’s, Sbarro, Papa John’s, Domino’s,
Boston Market, Bob Evans, and Applebee’s.
So when I read that
there would be a
Taste of Dover event tomorrow night, I must admit my smirkmeter went way
over to the right side.
The event is for a
great cause, a fundraiser for the Dover Art League on the occasion of the
opening season event at the
Schwartz Center for
Thankfully, the list of those who are
contributing their dishes to the affair doesn’t include the usual suspects
caterers are 865, In Boca Au Lupo, JW's Restaurant and Sports Lounge, the
Maple Dale Country Club, Mary Edwards Caterers, Personal Chef, Rocco's,
Some Guy's Bagels, The Nuts Caterers, 33 West and the Wild Quail Country
Tickets for the event
are just about sold out.
I’m sure that those
who go will have a great time eating what these outfits present to the
“Taste of Dover” still makes me smile, though.
September 4, 2003
Whole lotta table-pounding goin’ on
There’s an old saying
about litigation tactics that lays out the three basic options:
- If you have the
law on your side, pound on the law.
- If you have the
facts on your side, pound on the facts.
- If you don’t have
either the facts or the law on your side, pound on the table.
That third option
should be exercised with great care and discretion.
As described in an
Circuit decision issued today, however, the plaintiffs and their counsel
not only pounded on the table; they also tried to set it on fire,
on several occasions.
The Empire Bank of
Springfield, Missouri loaned $130,000 to the Good Stewardship Christian
Center (GSCC) for the purchase of two properties. Unfortunately, the Center
proved to be unable to live up to the promise of its name, and defaulted on
the loan within a year.
The bank then began
foreclosure proceedings. GSCC gave up possession of one of the parcels, and
it was sold. The other parcel, however, was a house in which resided A.
Louis Vaughn and his family.
Neither the GSCC nor
the Vaughns accepted the foreclosure gracefully. About a year after the bank
began to seek the collateral on its loan, the GSCC/Vaughn plaintiffs filed a
Federal lawsuit. The second amended version of the complaint alleged race
discrimination, violations of the Fair Housing Act, and violations of the
Equal Credit Opportunity Act, set out among more than twenty separate claims
against the bank, the holding company that owned the bank, and three bank
The plaintiffs didn’t
stop there. Shortly after filing the second amended complaint, they tried
and failed to have one of the bank’s attorneys disqualified. A few months
later they began a series of direct communications with some of the
defendants, leading to a protective order directing that all such contacts
had to be kept between the attorneys.
GSCC then filed a few unsuccessful motions
for sanctions against the defendants’ counsel. After the third such denial,
the District Court warned that
curb their desire to motion the Court at whim, lest they find themselves
on the receiving end of the sanctions they so persistently and unfoundedly
The fun just didn’t
After receiving a fax
from “the Vaughn sons” threatening criminal charges against two of the
bankers and the bank, the defendants moved to dismiss the case for failure
to follow orders. In response, Vaughn sent a racially incendiary letter to
the bank’s law firm, and filed a complaint with the Disciplinary Counsel
seeking the bank attorney’s disbarment.
Instead of dismissing
the case at that point, the judge fined Vaughn $1,000 for violating the
prior order, and entered yet another order about ex parte contacts:
"A. Louis Vaughn, or
those on his behalf, threaten getting Sue Lasater sent to prison, staging
nonviolent rallies, and accuse Mr. Groves of libel and defamation. This
type of ex parte communication is not proper, and a violation of the
The antics continued,
however. GSCC filed woefully late and incomplete discovery responses,
leading to yet another court order and a $250 sanction against plaintiffs’
improve. The plaintiffs subjected the bank defendants to extensive
questioning totaling over 700 pages of testimony, but balked in less than
one hour during Vaughn’s own deposition:
"Vaughn refused to
answer simple and straightforward questions, [and] engaged in
non-responsive speeches." GSCC's attorney also acted inappropriately, by "fail[ing]
to advise his client of his responsibility to cooperate in discovery . . .
[and by lodging] constant meritless and inappropriate objections,
speeches, and interruptions."
followed, and yet the plaintiffs continued their table-pounding. Finally,
the District Judge dismissed the suit with prejudice, due to the plaintiffs’
continual violations of the court’s orders.
Faced with this
history, the unanimous appellate panel had no difficulty upholding the
In the short, but
tortured history of this case, GSCC and Vaughn have made inappropriate ex
parte communications, in direct violation of a district court order; made
numerous baseless motions for sanctions against Appellees' attorneys;
failed to properly answer requests for admissions; obstructed discovery
during depositions; and failed to pay the sanctions ordered by the
In light of this, we do
not think the district court abused its discretion….
We think, in fact, that
the district court showed a great deal of patience. The federal courts are
not the appropriate arena for puerile retaliation against a bank that has
the audacity to foreclose on a defaulted loan.
And that’s why one
should be very, very careful about what table to pound, how hard to pound
it, and especially when to stop all the pounding.
Somebody might pound
back, and with good reason.
September 3, 2003
Why isn’t it more a matter of bad
The past weekend in
Rehoboth Beach was surprisingly quiet, especially for a Labor Day holiday.
About the only
downtown store that was really busy Saturday evening was Kemp Mill Records,
which unfortunately will soon
close its doors permanently:
It's been almost two weeks since the store on the corner of First
Street and Rehoboth Avenue began posting signs that their location is
Merchandise is being advertised as 25 to 40 percent off and those
looking to stock their music and movie libraries are looking for deals.
Music Network, Inc.,
operating under Chapter 11, recently obtained
approval for the closure of 36 of its stores, including Kemp Mill and
several others that will be familiar to bloggers elsewhere in the East and
Southeast, such as Turtle’s Music, Willies Music, and Peppermint Music.
When we went there Saturday night, the
place was filled with customers. We bought 6 CDs, normally priced at $17.99
each, for a discounted total of just over $61 (no sales tax, of course--this
is Delaware, after all).
Seeing the crowds and the dozens of
CDs and DVDs being sold during the 25-30 minutes we were there made me
wonder how much of the music industry’s current troubles are a simple matter
of bad pricing decisions.
I certainly don’t think I’m alone in
deciding that $18 or so for a CD seems a bit steep, especially considering
the quality of much of what passes for popular music lately. Knock the unit
price down to $11 or so, however, and it’s much easier for me to decide to
buy two or three of ‘em.
The industry continues to blame online
and other forms of piracy, but seeing those Kemp Mill crowds readily parting
with their cash for the bargain CD prices caused me to think there might be
a better explanation.
Who have been the real pirates?
Takes one to know one
The Washington Times ran
today about Yassir Arafat and an interview
he gave off-camera to our friends at CNN,
discussing his prognosis of the current "road map" for peace in the Middle
East. The news outlet quoted Arafat as blaming the Israelis for the lack of
progress, which in itself is hardly a newsworthy comment.
Instead, the headline was the most intriguing thing
about the piece:
Arafat declares U.S. plan a failure
Call me crazy, but when it comes
to having experienced sufficient personal failures to be able to
convincingly identify it in others, I don't believe anyone could possibly
Why, the man's been a total
disaster for the Palestinians for decades.
Stuart Buck's recent reference, I learned about
Comforts, a relatively new blog with a focus on several topics similar
to many of the posts to be found here. As David Sucher describes it, the
Cities, architecture, the
'new urbanism,' real estate, historic preservation, urban design, land use
law, landscape, transport etc etc from a mildly libertarian stance.
I hesitate to describe my own stances on these issues
on the political scale. Nonetheless, Sucher's pieces are fun to read and
So go there already, and
see for yourself.
September 2, 2003
Take one bite each from two separate
Last week the Second
Circuit Court of Appeals issued an opinion relating to
condemnation claims against government land use planning decisions.
In some respects, the
panel decision breaks no new ground. Nonetheless, the court did make it
easier for those claiming that a compensable taking had occurred to bring
their lawsuits in Federal court.
Evandro Santini is a
Connecticut developer. Through his company, Santini Homes, Inc., he sunk
several million dollars into a roughly 75-acre project for about 100 homes
Connecticut in the mid-1980’s
and very early 1990’s.
Santini, the Connecticut Hazardous Waste Management Service was looking at
doing something completely different with the same property.
In keeping with
Federal mandates and separate state legislation, the quasi-public state
agency was responsible for locating suitable properties for disposing of
low-level radioactive waste that was generated within Connecticut.
The initial site
planning was done in secret, but eventually the Service publicly announced a
list of potential locations that included Santini’s land as among the
Now, it just so
happens that if you look up the acronym LULU (Locally Unwanted Land Use) in
the dictionary, you’ll see a picture of a low-level radioactive waste
the people in and around Ellington did not take this news kindly. Instead,
they successfully lobbied the Connecticut legislature to pass and the Governor to sign new legislation telling
the Service to find another place for this LULU.
In the meantime,
however, the Service’s designation of Santini’s property as a potential
hazardous waste site had an unfortunate effect on his marketing efforts.
Testimony from the
Service’s own appraiser in a later state court proceeding showed that the
siting announcement probably caused about $215,000 hit on the value of
Santini’s land, at least while it remained under consideration for that use,
and for some time thereafter.
state court ruled against Santini’s claim for inverse condemnation damages.
The Connecticut Supreme Court affirmed, noting that the Service’s proposal
was simply a step in a planning process, and not the kind of fixed decision
to acquire land for which the state should be held to pay.
Santini then filed
his takings claim in Federal court, arguing that he had specifically
reserved the right to bring his Federal claims in a Federal proceeding,
instead of combining those claims with his state law arguments in the
Over the Service’s
objections, the Second Circuit agreed with Santini, at least with respect to
this important procedural issue. The panel decided that inverse
condemnation plaintiffs can preserve the option of having a Federal court
review any Federal property rights claims relating to state agency land use
decisions, regardless of whether those claims were already heard in the
state’s inverse condemnation proceedings.
On the other hand,
Santini still didn’t have a case:
The fact that Santini’s claim is based on nothing
more than the Service’s 1991 siting announcement—perhaps the prototypical
precondemnation governmental activity—dooms the claim on the merits, as
the Supreme Court has explicitly held that precondemnation activities do
not constitute takings.…
We are not unmindful of the economic impact that the
siting announcement obviously had on Santini’s efforts to develop and sell
his property. Unfortunately for Santini, however, this impact does not
necessarily mean that the governmental action of which he complains
constitutes a taking….
Our decision also makes for sound public policy…. We
do not believe the Takings Clause requires a state to choose among
planning in secret, not planning at all, and exposing itself to takings
claims from every property owner whose land might be affected by its
The Second Circuit’s
decision will be of cold comfort to the folks at Santini Homes, Inc., who
look to be out somewhere in the low six figures for all the trouble this
siting announcement caused them. On the other hand, future inverse
condemnation plaintiffs owe Evandro Santini a debt of gratitude for pushing
his case as far as he did.
agencies that must defend themselves against these claims may not feel so
The traditional end of summer here in some respects
simply marks the transition to a different focus on the recreation
opportunities that are a major economic element for the region.
Instead of sitting on the beach, soaking up the rays,
folks will now be seen sitting in their boats or on beach chairs facing the
water, holding fishing poles.
The fishing during September and October, both offshore
and in the Inland Bays, can be truly
local FM station runs a daily report from
Shop that goes into remarkable and lengthy
detail about what's running where, who's catching what with what kind of
bait, and so on.
The weekend also includes a related local tradition--a
huge boat sale at Shorts Marine. Somewhere between 300 to 400 new and used
boats are on display, along with piles of fishing gear and other nautical
My plan is to reach the sale just as it opens tomorrow
at 8 a.m., to see if there's a boat there with my name on it. Even if there
isn't, there might be a good deal on a surf pole or two or three.
Otherwise, the long weekend will be devoted to
finishing three books I started reading a couple weeks ago.
Blogging will resume here on Tuesday.
Have a great holiday!
UPDATE: It wasn't as if there weren't enough
boats. It's just that none of them were inspirational enough to loosen my
grip on my wallet.
The warning I saw on one of the used boats was pretty
"Both pontoons leak. Major repairs required!!!"
I'll bet that explains why that particular 24-footer
was offered for sale at only $1200.
August 29, 2003
Trusting Mom to do the wrong thing for you
Jon Rey Hurtado loved his mom, and
she loved him.
So when Jon Rey and his wife
Denice found themselves in a tight jam financially, his mother Barbara was a
pillar of strength, on which the couple knew they could rely.
The IRS, the state of Michigan,
and several banks simply didn’t have the same relationship with Jon Rey and
Denice, and it showed.
The couple owed about $110,000 to
the Feds, an additional pile to one bank, and far smaller debts to several
other creditors, including the state. On the other hand, they had also
settled a lawsuit against Blue Cross and Blue Shield for over $130,000.
Jon Rey then did an interesting
thing. He and Denice handed the settlement money over to his mom.
Barbara put the cash in her credit
union savings account, with her husband the only other person with legal
access to the money. Whenever Jon Rey and Denice needed some of the cash,
however, Barbara was right there with the checkbook. Over the course of a
few years, Jon Rey and Denice relied on this account for their living
Barbara never took any of the
money for herself. She never even charged a fee for holding the money. What
Some might find this arrangement a
little unusual, especially since Jon Rey and Denice filed for bankruptcy not
long after the money ran out.
Others found this arrangement more
than a little illegal, especially since Jon Rey and Denice didn’t mention it
in any of their filings with the IRS or the Bankruptcy Court.
To his credit, as it were, Jon Rey
was pretty blunt about the reasons for this set-up in his deposition:
“Well, several reasons. Number one, I mean I’ve got
creditors and creditors. I will just be very candid with you, you know,
judgments and so forth, and I needed to survive.”
When the Chapter 7 bankruptcy
trustee learned about the bank account and how Barbara used the money, he
filed for two specific forms of relief under the bankruptcy code—first, to
formally avoid the transfer as fraudulent; and second, to obtain a judgment
to recover the money from the person who first held it--in this case,
The parties didn’t really disagree
that the initial transfer into mom’s bank account was fraudulent, intended
to frustrate the debt collection efforts of Jon Rey and Denice’s creditors.
On the other hand, Barbara argued that she shouldn’t have to pay back the
$130,000 to the trustee, because she was merely an agent of the couple.
The bankruptcy court agreed with
her, but the District Court sided with the trustee.
a Sixth Circuit
panel unanimously agreed that under these
circumstances, the “trust account” was entirely bogus, and that Barbara was
now responsible for the $130,000.
Barbara took the cash initially,
but it wasn’t because her son owed her any money. She also had the formal
legal authority to spend it in any fashion once it went into her bank
account, and her son could not have stopped her. Since the transfer to her
was admittedly part of a illegal scheme to play keep-away with the banks and
the IRS, however, and since she was the first person to hold the money under
this arrangement, she now owed the cash to the bankrupt estate for the sake
of those who were legally entitled to it.
Periodically one hears or reads
about parents who do just a little too much for their kids.
This case certainly seems to
qualify as yet another example.
I'm sure the folks at
Clarke Environmental Mosquito Control,
Inc. weren't trying to be funny.
It just came out that way.
I was doing some
research for an upcoming golf column on pest control on golf courses, and
read the company's webpage description of
kills adult mosquitoes among other nasty critters.
Two golf course
superintendents I interviewed praised the stuff for its mosquito-killing
qualities, as well as for its effectiveness against flies. Even so, neither
one told me about another interesting aspect of the product that the company
apparently thought deserved to be mentioned on its web site.
Bear in mind that the
writers of this ad copy weren't being figurative--they were being completely
Knocks Their Legs Off
Like other pyrethroids, field and laboratory tests have shown that Biomist®
at sub-lethal doses causes mosquitoes to lose their legs. This interferes
with successful flight and feeding.
I imagine it would.
Nothing like trying to
land on somebody's arm or ear for a quick bite, and just rolling right off
August 27, 2003
Close call on a Rails-to-Trails fight
cases usually involve efforts by disappointed regulatory participants to
overturn an agency decision.
These folks have an
uphill battle, and that’s by design.
regulatory process frequently sloughs off some of the really tough social
policy decisions onto the administrative agencies, after the legislature
sets out the broad parameters of a decision-making framework in a particular
area. Once an agency makes the call, judicial review on appeal is normally
(and sometimes remarkably) deferential.
The courts typically
first defer to the agency’s designated expertise in the area. The judiciary
then compounds the appellants’ difficulties by normally requiring only that
the agency decision be based on “substantial” evidence—less than a
preponderance, but at least the equivalent of what would be required to
avoid a directed verdict in a routine civil case.
The main reason for
all the judicial deference is that at heart, the agency is carrying forward
the fundamental policymaking role the legislature assigned to it.
Overturning agency decisions based on a disagreement with an admittedly
reasonable legal interpretation, or a disagreement with a reasonable view of
the evidence, is tantamount to having the judges take over the legislative
policymaking function in the guise of a judicial appeal.
Most judges are
actually a tad reluctant to assume that role, with of course some notable
Circuit issued a 24-page opinion upholding a close call made by the
Surface Transportation Board (STB) over what to do with a 2.5-mile-long
stretch of rail line in Lancaster County, Pennsylvania, with competing
claimants for dominion over the property.
Local activists and
the local government sought to take advantage of the Rails-to-Trails Act and
convert the line to
an attractive addition to their community.
them, the law tends to favor those who seek to continue the use of the
railroad right-of-way for its original purposes.
A local salvage/scrap
operator whose property was adjacent to part of the line filed the paperwork
to make an Offer of Financial Assistance (OFA). The OFA gave him the chance
to buy the line for a price eventually set by the STB.
An STB-approved OFA
can trump any filings for conversion under the Rails-to-Trails Act, if the
evidence supports the offer.
In this case, the OFA
applicant was not a railroad; was a single shipper; had no definitive
prospects for others to use the line; and, at best, claimed that once he
opened it up again, he could better serve customers in the South. The
Greenway folks argued that the applicant would have to spend up to $300.000
to restore the line to full use, and that it was essentially uneconomical to
go through the effort.
The STB noted,
however, that the OFA applicant had legal restrictions on what he could do
with the property for at least two years. Given the time limits and other
conditions, the STB determined that the Congressional directive to try to
keep rail lines open overrode the separate Rails-to-Trails policy directive
to permit another appropriate transportation use for the corridor if rail
wasn’t a realistic option anymore.
Even the appellate
panel majority noted this was a close case:
We do not suggest that
the evidence supporting the STB’s decision is overwhelming. It is,
manifestly, modest. A reasonable factfinder could have found Sahd’s
demonstration in support of the OFA unpersuasive. Indeed, it is not
inconceivable that the members of this panel, had we been members of the
STB, would have arrived at a conclusion different from that arrived at by
the STB. But as members of a reviewing court we are limited to inquiring
whether the STB’s decision had some evidentiary support and was reasonably
consistent with the agency’s own precedent. And we hold that the STB has
not acted arbitrarily and capriciously in this case, since the decision
has some support in the record and the agency’s explanation of how its
decision comports with agency precedent is not unreasonable….
The STB applied the OFA
statutory provisions established by Congress to serve the public use. In
light of the precedent granting Congress a wide berth in determining what
constitutes public use, we are loath to second-guess the factual
determinations of the agency to which Congress has assigned
decision-making responsibility in OFA proceedings.
nine-page dissent was fairly sharp:
Sahd may have used the
line in the past, but not in the last thirteen years. Sahd may “desire to
resume using rail service” but mere desire is not proof of
feasibility, a need for the service, that there is sufficient traffic for
a viable line, and that Sahd has the capability to operate a railroad.
Sahd’s unsupported wish is a feeble basis on which to reject important and
bona fide local, county, and state plans for trails and open space….
The STB’s judgment in
this case has the effect of seriously obstructing the public interest. …
As it now stands, there is no evidence to suggest that the track will be
used for the public benefit, either for environmental and recreational
purposes or for continued rail service.
In my experience,
this was about as close as I’ve seen an agency like the STB ever come to
having its decision reversed on evidentiary grounds. Reversals based on
legal interpretations are far more common. On rare occasions, however, the
courts will rule there was just not enough evidence to uphold the agency
In this instance, it
looks to me like the OFA applicant won because of the deferential standard
of review on appeal.
If his plans fall
through, however, there will still be an opportunity for the state and local
government to take the legal steps necessary to create a greenway corridor
in the same spot.
Whenever I write
about life in and around Rehoboth Beach, I’m usually
wary of coming across as a bit too boosterish.
miniature size compared to most metropolitan areas, there’s always a
concern that anything I say about where I live will come off along the lines
“Everything’s up to date in
In fact, we really do
love living here, and it’s been a great place to raise our family.
Sometimes, however, even Rehoboth’s fondest admirers must admit that it’s
not a complete and utter paradise.
Last June, for
example, I wrote about how a defunct
Ames store was being
reopened as an
after-hours dance club. The entrepreneurs who began this new project
included Rob Dick and Eric Tewes, already well known to the Rehoboth
community for their extremely popular
Blue Moon restaurant.
Dick and Tewes managed to increase their local visibility even further--but
not in a good way:
Rehoboth Beach police and federal drug agents said
Monday they are continuing their investigation of drug sales in the beach
resort, following a sweep last week that netted 18 people, including the
co-owners of the Blue Moon restaurant….
Authorities identified the alleged drug traffickers as … Robert J. Dick,
37, … charged with trafficking methamphetamine.
Also arrested on assorted drug offenses [was]: … Eric C. Teves, 33, … of
Dick and Teves are co-owners of the popular Blue Moon restaurant at 35
Baltimore Ave., and business partners in the after-hours dance club A.M.
on Del. 1 north of Rehoboth Beach.
According to court records, police and federal agents raided Dick's home
early Friday and seized 5.4 grams of crystal methamphetamine, 30 Ecstasy
tablets, a plastic bag of cocaine and assorted drug paraphernalia.
FM morning talk show today was abuzz (as it were) about the arrests. The
discussion when I was listening centered on the drug bust's potential impact
on the Blue Moon’s liquor license and other ancillary effects.
The criminal cases will shake out over
the winter, and we’ll just have to wait and see what comes of this
enforcement action and any others that this sweep might trigger.
these arrests are sobering reminders that
not even tiny beach towns are immune to the drug trade—not that any of us
locals really needed the reminding.
Beverly Luxton faced
a nasty double-whammy.
Thanks to an ugly
combination of serious cancer and significant past-due tax liabilities, in
the mid-1990s it looked like she would soon be the embodiment of Benjamin
Franklin’s famous quote,
in this world nothing is certain but death and taxes.
Luxton owed nearly
$800,000 in taxes, penalties, and interest to the IRS. On the other hand,
she also owned three State Farm life insurance policies worth $327,000.
Despite her awful
personal circumstances, the IRS was in no position to cancel the money
Luxton owed the government. Instead, the tax collectors filed a lien for the
entire amount, but also accepted Luxton’s collateral assignment of the
policy proceeds, to be paid when she died.
The terms of the
insurance assignment language put the IRS in a favorable position compared
to any named beneficiaries. In addition, the Feds adopted a flexible
approach to managing their new assets.
For example, the IRS
permitted some of the money from the sale of Luxton’s residence to be
applied toward the insurance premiums. Later on, the tax collectors gave the
okay for Luxton to borrow policy dividends to pay for medical expenses, and
also used other policy dividends to keep up the premium payments.
The IRS didn’t have
to do any of these things. It could have simply surrendered the policies for
their cash value.
By doing so, of
course, the Feds would have also walked away from a few hundred thousand
Luxton died in
September 1999, and her children filed suit to collect on the policies. They
argued that state law barred the IRS from receiving the proceeds instead of
the named beneficiaries.
Last Friday the
[The IRS] Agent … did what many
prudent creditors would have done under the circumstances, accepting an
assignment of the right to insurance policy proceeds that exceeded
Luxton’s available assets, paying premiums to keep the policies in force,
and deferring more aggressive collection actions. Luxton benefited from
the arrangement, at least to the extent she was permitted to borrow
against the policies to pay medical expenses. The beneficiaries were not
harmed because the IRS could have effectively cancelled the policies by
foreclosing on their cash surrender values before Luxton’s death.
… It is counterintuitive to posit
that Congress would arm the IRS with a powerful tax lien and other
formidable collection tools, but would deny the agency the authority to
employ other devices commonly used by creditors to improve their position,
such as securing interests in collateral by means other than a lien. And
in fact, the Internal Revenue Code refutes the beneficiaries’ contention,
expressly authorizing the agency to employ “such other reasonable devices
or methods as may be necessary or helpful in securing a complete and
proper collection of the tax.”
Beverly Luxton’s last
years were not the sort to be wished on anyone. It’s also a shame that her
tax troubles eliminated a significant inheritance for her children.
Nonetheless, at least
in this one case the IRS seems to have handled its tax collecting
responsibilities with both sensitivity and sensibility.
No new blog posts
today--it's just too nice outside, and the golf course is beckoning.
In the meantime, here's
the link to my latest
golf book review of Golf's Greatest Eighteen, and a link to last
Friday's golf column.
Have a great day!