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Losing your ride, the IRS way.

March 27, 2009

You don't see a 1947 Indian Chief motorcycle every day. A Spirit Lake, Iowa man who owns one may not see his much longer.

Flickr Photo Indian 1947 by Angelique Eeek

Michael Alan Reed stopped filing conventional tax returns after 1998, according to an opinion issued this week by Federal Judge Mark Bennett:

In 1999, defendant Reed sent a letter and affidavit to the IRS contesting the applicability of federal income tax to him. Also in 1999, defendant Reed sent to the IRS a "Non-Negotiable Bill of Exchange" in the purported amount of $51,635,000. Along with the "Non-Negotiable Bill of Exchange", defendant Reed sent a copy of his birth certificate, indicating that he was born in the United States, driver's license, and social security card.

For some reason these important documents failed to satisfy the IRS. Things went downhill for Mr. Reed, as they usually do in these situations. He attempted to stay ahead of the tax collector by retitling his assets to "Pembina Nation Tribal Council" and to several trusts.

On October 26, 2006, Suntasso transferred title to the red and white 1974 GMC truck, the blue 2001 Ford pick-up, the silver 2004 Toyota Sequoia, the red 1947 Indian Chief motorcycle, the black/red 2002 Indian Chief motorcycle, and the red 1991 Harley-Davidson motorcycle, to Canyon Investments. Pembina Nation Tribal Council and Suntasso, through their purported former trustee, Loren Brown, disclaimed any interest in the subject real estate and personal property.

The IRS sued to disregard these transfers and seize these assets, saying Mr. Reed remained their true owner. Mr. Reed disagreed, and said that he had already paid the taxes:

Defendant Reed has attached to his motion for summary judgment copies of the purported "bonds" which he claims satisfied his outstanding federal tax liabilities. These two documents are denominated "Bond to discharge attachment for debt Via Pass-through Account Michael A. Reed 478-58-9266" and "Bond to discharge attachment for debt Via Pass-through Account Raymond M. Cox 138-34-3844". Both documents purport to be payable on demand "through the back office for settlement via the pass through account . . . at the treasury window, Department of the Treasury, 1500 Pennsylvania Ave., N.W., Washington DC 20220, for the settlement and adjustment of the account enumerated herein." The court concludes that both documents are works of legal fiction, neither of which constitutes a viable financial instrument or represents a recognized legal medium of exchange the tendering of which would satisfy defendant Reed's outstanding federal tax liabilities

Not surprisingly, the court held for the IRS. So if you collect old motorcycles, there might be a new one on the market soon.

Links:

USA v. Reed, No. 5:07-cv-04087

Affidavit filed by Mark Alan Reed, a representative example of a futile tax protester filing.

Tags: tax protesters.

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