Ever since that time John has controlled Church -- that is, assuming that it has any real existence at all -- and he has claimed throughout this litigation to act for it.
As for the post-conveyance conduct of defendants, U.S. 12(m) paras. 16-26 and n. 1 (attached to this opinion as its Ex. 3) tell the story as to the lack of significance to be attached to Church's purported "ownership" of the Property. Defendants respond with no facts -- they merely offer generalized denials that do not create any real issue of fact, let alone any material factual issue. All that they have offered that could be characterized as even partly responsive to the United States' filing is a statement in their memorandum that the designation of John and Alice as the parties insured on the hazard and liability insurance covering the Property -- a designation made with no mention whatever of Church either as a party insured or as having any interest in the Property -- is in error and will be corrected. That assertion would not make a difference even if it were to be credited, and this Court is not required to do that.
John's Tax Liability
John contested his tax liability for the years at issue before the Tax Court. He lost. On August 25, 1987 Tax Court Judge Edna Parker issued a decision (part of Ex. 2 to this opinion) pursuant to that Court's January 22, 1987 opinion, determining the deficiencies in tax and additions to the tax that were later set out in the Form 4340 Certificates of Assessment (the balance of Ex. 2 to this opinion).
Although John purports to challenge the existence of his tax liabilities here, it has been firmly established for nearly a half century that claim preclusion -- res judicata -- forecloses any such attack ( Commissioner v. Sunnen, 333 U.S. 591, 598, 92 L. Ed. 898, 68 S. Ct. 715 (1948); United States v. International Building Co., 345 U.S. 502, 97 L. Ed. 1182, 73 S. Ct. 807 (1953)). Nor has any real question been presented here as to the validity of the assessments (see United States v. Chila, 871 F.2d 1015, 1017-18 (11th Cir. 1989); cf. United States v. Warner, 855 F.2d 372, 374 (7th Cir. 1988)). As stated earlier, all that is required is to bring the amounts up to date to reflect the full prejudgment interest.
As for the relationship between John's established tax liabilities and the conveyance to Church -- the issue whether that conveyance may be disregarded because it was fraudulent as to the United States -- the relevant question is whether the United States was a "creditor" of John's at the time of the 1978 conveyance. On that score the opinion of this Court's former colleague Judge Susan Getzendanner, issued in a remarkably similar case (a purported conveyance of a taxpayer's residence to a "church" without the receipt of any current consideration),
could have been written expressly to fit this case ( Indiana National Bank v. Gamble, 612 F. Supp. 1272, 1276 (N.D. Ill. 1984) (citations omitted)):
Although those [prior year's income] taxes had not yet been assessed, the law is well settled, for fraudulent conveyance purposes, tax liabilities are due and owing on the date the returns are required to be filed and not the date of assessment.