even contact the plaintiff to ascertain the veracity of Zahos's
Further, the IRS asserts that Agent During learned on June 6,
1991, one day after the jeopardy assessment was made against
the plaintiff, that plaintiff transferred title to her house to
her daughter, Christine DeFino. Additionally, in looking at all
the circumstances of this case, it is apparent why legal title
to the house was transferred to her daughter, Christine DeFino.
In September of 1990, Zahos filed a lis pendens against the
marital home to prevent the plaintiff from selling the house.
Therefore, upon the advice of counsel plaintiff transferred
legal title to DeFino.
Moreover, the IRS explains that Agent Durning learned that on
June 17, 1991, the property was sold by the daughter to a third
party. If the IRS had investigated the sale, the investigation
would have revealed that the plaintiff was engaged to be
married at the time and was planning on moving into her
husband's home. Additionally, plaintiff was left with only the
house after her twenty-eight-year marriage to Zahos. Judge Herr
opinion, p. 12. She was "granted full power and authority to
list and sell the property in her name only and to transfer the
property in her name only." Id. It does not appear that she
pursued this course of action to avoid the payment of taxes.
The case of French v. United States, 44 A.F.T.R.2d 79-5653
(E.D.Ok. 1979) is instructive. In upholding a jeopardy
assessment, the French court concluded that the plaintiffs
had transferred all of their real property to their children
"in order to put it beyond the reach of the government." Id.
at 79-5654. The court reached this result because the
plaintiffs failed to offer evidence to explain their actions.
Id. In this case, plaintiff has offered evidence which
provides a rational justification for her conveyance to her
daughter. The IRS, if it had investigated the situation, would
have realized that plaintiff was not attempting to put the
proceeds from the sale out of the reach of the government.
In view of all of the circumstances of this case, the IRS's
belief that the tax money was in jeopardy is unreasonable. This
court can envision, and the IRS points to many cases where a
jeopardy assessment is reasonable. Billig, 43 A.F.T.R. at
82-479, 480 (plaintiff was in possession of $106,000.00 in cash
and one ounce of marijuana and had at least four different
addresses); Robinson, 46 A.F.T.R.2d at 805079 (convicted
felon and fugitive charged with operating business that secured
merchandise under false representations assigned all rights in
his property to his attorney); Noell, 43 A.F.T.R.2d at
79-1196 (drug smuggler, who possessed and recently used
passport assigned bank account to attorney); Nichols, 43
A.F.T.R.2d at 79-836 (jeopardy assessment made against money
obtained from drug trafficking where defendant attempted to
transfer all moneys seized during her arrest to her attorney);
Erath, 43 A.F.T.R.2d at 79-1193 (plaintiff was in the
business of selling drugs, had used illegal aliases, had
traveled abroad recently, and had transferred most of his
assets to his attorney); Canon v. United States, 40
A.F.T.R.2d 77-5529 (D.Nev. 1977) (plaintiff was operating an
illegal bookmaking operation). This case is dissimilar.
Moreover, the IRS Manual states that "[j]eopardy assessments
should be used sparingly, and care should be taken to avoid
excessive and unreasonable assessments." IRS Manual §
4584.2(2). The manual also depicts situations where jeopardy
conditions may arise. These situations include:
(a) narcotic cases
(b) cases involving taxpayers engaged in organized crime
(c) wagering cases
(d) Strike Force cases
(e) cases involving taxpayers who are reasonably believed
to be receiving income from illegal activity
(f) cases involving taxpayers known or suspected of having
plans for leaving the United States without making
provisions for payment of their taxes (i.e.,
aliens generally considered as border hoppers)
(g) cases where an individual in physical possession of
cash, or its equivalent, in excess of $10,000.00 and does
not claim such cash as his/hers, or as belonging to another
person whose identity the Secretary can readily ascertain
and who acknowledges ownership of such cash, then the
collection of tax on such cash is presumed to be in
jeopardy within the meaning of Code section 6867.
IRS Manual § 4584.2(3).