U.S. District Court Denies Motion to Dismiss in Federal Tax Lien Fraudulent Transfer Action

The U.S. District Court for the Eastern District of Kentucky, Central Division, denied taxpayers’ motion for partial judgment on the pleadings, holding that the Government plausibly alleged fraudulent transfer claims in connection with unpaid federal income tax liabilities exceeding $1.8 million. The husband owed substantial federal income taxes for multiple tax years, and the IRS recorded federal tax liens in November 2014. Approximately one week later, the married couple executed a quitclaim deed transferring all interest in their residence to the wife alone. The Government filed suit seeking to set aside the transfer as fraudulent and to foreclose its federal ...