Marshall’s Replacement Is No Moderate

More Republican Police Blotter- Rep Tom Millett of Libby

by Ken Toole | Mar 21, 2025 | Legislature

Republican Representative Tom Millett of Libby did not file income tax returns with the
federal government for the 2004, 2005, 2006, 2007, 2008, 2009, 2011, and 2012 tax years. He explained that he is exempt from federal taxation. Only people who work in Washington, D.C. earn taxable “income” under the Internal Revenue Code. Hmmm. We ever heard of that.  Neither had the IRS, neither had the Federal District Court, which decided in the IRS’s favor. Millett  appealed court’s decision to the 9th Circuit Court of appeals.

The bills he’s introduced in this session tell the whole story (see below link).  Gotta love these right wingers for their hypocrisy.

https://projects.montanafreepress.org/capitol-tracker-2025/lawmakers/Tom-Millett/

Currently, Montana Wild is encouraging people to send letters or emails to oppose one of his bills selling off federal lands (HJ24).  The hearing is Monday, March 24.

We’re posting the entire Federal Court order in this case below for those interested.  But, here is the conclusion.

E. Conclusion
Based on the foregoing, summary judgment is
entered against Millett for his outstanding federal
tax liabilities, plus statutory interest and penalties,
for tax years *15 2004-08, 2010, and 2013-17. But
genuine issue of material fact remains as whether
the notices of deficiency for tax years 2009, 2011,
and 2012 were properly mailed to Millett.

The full decision is below.

United States District Court, District of Montana
United States v. Millett
Decided Jun 15, 2023

CV 21-47-M-DWM
06-15-2023
UNITED STATES OF AMERICA, Plaintiff, v.
THOMAS MILLETT, MICHELLE
MCLAUGHLIN, and FLATHEAD COUNTY,
Defendants.
DONALD W. MOLLOY, DISTRICT JUDGE
UNITED STATES DISTRICT COURT
OPINION AND ORDER
DONALD W. MOLLOY, DISTRICT JUDGE
UNITED STATES DISTRICT COURT

On April 20, 2021, Plaintiff United States of
America filed this action pursuant to 26 U.S.C. §§
7401 and 7403, seeking a federal tax lien against
real property owned by Defendants Thomas
Millett and Michelle McLaughlin (collectively
“Defendants”). (Doc. 1.) The government moves
for summary judgment under Federal Rule of
Civil Procedure 56, asking for a determination
that: (1) Millett owes outstanding federal tax
liabilities in the amount of $419,822.39 with
interest; (2) as a result of the associated
assessments, federal tax liens attach to all of his
property and rights to property; and (3) because
McLaughlin was not a bona fide purchaser of
Millett’s interest in the real property at issue, the
federal tax liens for the 2004 to 2009 tax years
encumber 50% of that real property. (See Docs.
65-69.) Defendants oppose and have filed their
own *2 motion to dismiss and motion for
summary judgment as it relates to Millett’s tax
liability. (See Docs. 70-71, 74-75.) Ultimately,

Defendants’ motion is denied and the
government’s motion is largely granted as outlined
below.

2

1

1 Defendants’ motion is untimely because
while the motions deadline was set for May
26,2023, (see Doc. 61), motions were
required to be “fully-briefed” by this
deadline, which “means that the brief in
support of the motion and the opposing
party’s response brief are filed” by that
date, (see Doc. 35 at ¶ 15). Defendants’
motion was therefore due on May 5, 2023.
Nevertheless, because Defendants’ motion
is based on the same arguments raised in
response to the government’s motion, (see
Doc. 70), and raises jurisdictional issues,
its merits are considered.
Background
The following facts are undisputed unless
otherwise noted, (see Docs. 66, 71), and viewed in
the light most favorable to the nonmoving party,
Tolan v. Cotton, 572 U.S. 650, 657 (2014) (per
curiam).
I. The Taxes
Millett did not file income tax returns with the
federal government for the 2004, 2005, 2006,
2007, 2008, 2009, 2011, and 2012 tax years. (Doc.
66 at ¶ 1). He filed tax returns for the 2010, 2013,
2014, 2015, 2016, and 2017 tax years. (Id. ¶ 2.)
He did not, however, pay any federal income taxes
for any of the years listed above, aside from any
amounts withheld from his income as a W2
employee. (Id. ¶ 3.) When asked why he did not
pay his taxes, Millett stated that he is exempt from

1

federal taxation, (id. ¶ 4), as only people who
work in Washington, D.C. earn taxable “income”
3 under the Internal Revenue Code, (id. ¶ 5). *3
According to the government, the Internal
Revenue Service (“IRS”) determined the amount
Millett owed for 2004, 2005, 2006, 2007, 2008,
2009, 2011, and 2012 based on information
maintained by the IRS pursuant to 26 U.S.C. §
6020(b). (Id. ¶ 6.) The government further proffers
that the IRS timely assessed Millett’s 2010, 2013,
2014, 2015, 2016, and 2017 tax years based on the
amounts Millett self-reported as due for those
years, notice was provided to Millett of these
outstanding liabilities, and as of April 21, 2023,
Millett owes $419,822.39 in outstanding federal
tax liabilities. (Id. at ¶¶ 6-7.) Because Millett did
not pay his tax debt, the government argues that
federal tax liens arose in favor of the government
on the dates of assessment, encumbering all of
Millett’s property and his rights to property. See 26
U.S.C. §§ 6321, 6322; (Doc. 66 at ¶ 9). To provide
notice of these statutory liens, the IRS recorded
Notices of Federal Tax Lien with Flathead County
pursuant to 26 U.S.C. § 6323(f). (Doc. 66 at ¶ 10.)
While Defendants do not dispute that Millett did
not pay taxes for the years identified above, (see
Doc. 71 at ¶¶ 1-5), they object to the evidence the
government offers in support of its motion,
specifically arguing that Exhibit 35, (see Docs. 68-
1)-which contains a number of Forms 4340 that
reflect assessed taxes-“is inadmissible hearsay as
[the government] did not comply with the
requirements of Evidence Rule 902(11).” (See,
e.g., id. ¶ 6.) Defendants further insist that there is
no evidence showing that “any notice(s) of
deficiency were *4 mailed to defendant Millett’s
last known address at the time for any of the tax
years 2004, 2005, 2006, 2007, 2008, 2009, 2011,
and 2012. (Nothing in U.S. disclosures, discovery,
or documents presented with motion).” (Id. ¶ 15.)
4

IL The Property

A secondary dispute in this case is the relationship
between Millett’s tax liability and real property
allegedly owned, at least in part, by Millett. On
March 20, 2012, Defendants bought four aces of
land in Flathead County at 775 Pleasant Valley
Road, Marion, Montana 59925 (“the Property”).
(Id. ¶ 12.) They split the $43,500 purchase price
equally as joint tenants. (Id. ¶ 13.) Millett initially
paid for the Property in whole and McLaughlin
repaid her half in cash. (Id.) On September 18,
2012, Millett quitclaimed his half interest in the
Property to McLaughlin for the price of “[o]ne
dollar and love and affection.” (Id. ¶ 14.)
Legal Standard
Summary judgment is appropriate “if the movant
shows that there is no genuine dispute as to any
material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a).
A fact is material if it impacts the outcome of the
case in accordance with governing substantive
law. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). A dispute of material fact is
genuine “if the evidence is such that a reasonable
jury could return a verdict for the nonmoving
party.” Id. All reasonable inferences must be
viewed in the light most favorable to *5 the
nonmoving party. Tatum v. Moody, 768 F.3d 806,
814 (9th Cir. 2014). Nonetheless, the nonmoving
party must identify, with some reasonable
particularity, the evidence that it believes
precludes summary judgment. See Soto v.
Sweetman, 882 F.3d 865, 870 (9th Cir. 2018)
(explaining that while pro se parties are exempted
from “strict compliance with the summary
judgment rules,” they are “not exempt[ed] … from
all compliance,” such as the requirement to
identify or submit competent evidence in support
of their claims).
5

Defendants also characterize their motion as a
motion to dismiss, insisting that this Court lacks
jurisdiction over the government’s claims because
certain procedural requirements were not met. See
26 U.S.C. §§ 6213(a), 6303(a). While Rule 12(b)

2

United States v. Millett CV 21-47-M-DWM (D. Mont. Jun. 15, 2023)

(1) of the Federal Rules of Civil Procedure
generally applies to jurisdictional challenge, see
Safe Air for Everyone v. Meyer, 373 F.3d 1035,
1039 (9th Cir. 2004), resolution of this
jurisdictional challenge depends on materials
outside the pleadings and is intertwined with the
merits of the case. It is therefore appropriate to
consider Defendants’ jurisdictional challenge in
the context of a motion for summary judgment.
See Augustine v. United States, 704 F.2d 1074,
1077 (9th Cir. 1983). Under this standard, “the
moving party should prevail only if the material
jurisdictional facts are not in dispute and the
moving party is entitled to prevail as a matter of
law. Unless that standard is met, the jurisdictional
facts must be determined at trial by the trier of
6 fact.” Id. *6
Analysis
The government seeks to reduce Millett’s
outstanding tax liabilities to judgment and for a
finding that tax liens attached to his interest in the
Property. In response, Defendants challenge only
the tax liability arguments. The government
prevails as to all of its claims except for Millett’s
tax liability for tax years 2009, 2011, and 2012.
Because a genuine issue of material fact remains
as to whether notices of deficiency were properly
mailed to Millett for those years, those narrow
claims shall proceed to trial.
I. Millett’s Tax Liabilities
If a taxpayer fails to pay his or her taxes, or the
IRS believes that additional income tax is due, the
IRS may enter a tax assessment. The IRS must
first, however, mail a notice of deficiency to the
taxpayer by certified or registered mail. 26 U.S.C.
§ 6212(a). Once this notice has been mailed, the
taxpayer has ninety days to challenge its
calculations in Tax Court. Id. § 6213. If a taxpayer
does not file a petition in the Tax Court within the
specified time, the IRS can make an assessment.
Id. § 6213(c). As soon as practical and within
sixty days of making the assessment, the IRS must

issue a “notice and demand letter” to the taxpayer,
specifying the amount due and demanding
payment. Id. § 6303.
Here, Millett challenges the government’s ability
to reduce his tax liability to judgment on two
grounds. First, Millett argues that the government
fails to *7 show that it mailed a notice of
deficiency in accordance with § 6212(a) for the
years he did not file or pay taxes. Second, he
argues that the government fails to show that
assessments were validly made and the proper
notice and demand issued. With limited exception,
these challenges lack merit.
7

A. Admissibility of Forms 4340
As a threshold issue, in tax cases such as this “the
Government often produces IRS Form 4340,
which is a computer generated form that reflects
the taxes assessed to and paid by the taxpayer in a
particular year.” United States v. Meyer, 914 F.3d
592, 594 (8th Cir. 2019) (internal quotation marks
omitted). In the absence of contrary evidence, this
form is generally recognized as establishing that
notices and assessment were properly made. See
Hansen v. United States, 7 F.3d 137, 138 (9th Cir.
1993) (per curiam) (concluding that Form 4340
established that IRS sent a notice of assessment
and demand for payment); Hughes v. United
States, 953 F.2d 531, 535, 540 (9th Cir. 1992)
(explaining that Form 4340 is presumptive
evidence of a valid assessment); see also Laszlof y
v. C.I.R., 297 Fed.Appx. 628, 629 (9th Cir. 2008)
(“The Tax Court properly granted summary
judgment to the Commissioner because Form
4340 established that the IRS made a valid tax
assessment and sent Laszloffy a proper notice of
8 assessment and demand for payment.”). *8
Here, Defendants challenge the admissibility of
the Forms 4340 for the tax years at issue, arguing
they lack the adequate foundation and that the
government failed to comply with the business
records exception under Federal Rule of Evidence
902(11). Neither argument is persuasive because
IRS Forms 4340 accompanied by an IRS Form

3

United States v. Millett CV 21-47-M-DWM (D. Mont. Jun. 15, 2023)

2866, “Certificate of Official Record,” “are
admissible as self-authenticating domestic public
documents under Fed.R.Evid. 902(1) because they
were certified under seal.” Hughes, 953 F.2d at
540. Such is the case here. (See Doc. 68-1 at 2, 10,
17, 24, 32, 40, 47, 51, 58, 64, 68, 71, 74, 77.)
Therefore, the government may rely on these
forms in arguing its motion and need not show the
requirements of Rule 902(11), a distinct public
records exception, apply.

2

2 The government filed two versions of the
tax documents at issue. Docs. 68 and 69
contain identifying taxpayer information
and are therefore sealed. Doc. 72 is a
redacted version of the same exhibits.
Citations herein are to Docs. 68 and 69.
B. Notices of Deficiency
As to the merits of the government’s tax claims,
Millett first argues that the IRS did not mail him
the requisite notice of deficiency for the tax years
2004, 2005, 2006, 2007, 2008, 2009, 2011, and
2012 in accordance with § 6212(a). Where, as
here, a taxpayer claims that a notice of deficiency
was never sent, the government bears the burden
of proof “by competent and persuasive evidence.”
Welch v. United States, 678 F.3d 1371, 1378 (Fed.
Cir. 2012). Nevertheless, “[a] *9 notice of
deficiency is valid if it is mailed to the taxpayer’s
last known address even if it is not received by the
taxpayer.” Williams v. Comm ‘r, 935 F.2d 1066,
1067 (9th Cir. 1991); see 26 U.S.C. § 6212(b)(1).
And, the government “is entitled to a rebuttable
presumption of proper mailing if it (a) shows that
the notice of deficiency existed and (b) produces a
properly completed Postal Form 3877 certified
mail log (or equivalent).” Meyer, 914 F.3d at 594
(internal quotation marks omitted). This burden
may also be met by evidence that is “otherwise
sufficient,” such as an IRS Form 4340. Id. at 594-
95.
9

Here, the government did not produce any Postal
Form 3877s but argues that “the notices of
deficiency the United States filed with its Motion

show proof of mailing.” (Doc. 73 at 9.) Indeed, a
notice of deficiency for tax years 2004, 2005,
2006, 2007, and 2008 was sent to 8174 Las Vegas
Boulevard S., Suite 109, Las Vegas, NV 89123,
and that Notice specifically states that it was sent
by certified mail on November 5, 2010. (See Doc.
69-3 at 1-4.) Defendants do not challenge the
propriety of that address. Thus, the government
has provided competent, unrefuted evidence that
the requisite notice was provided under § 6212(a)
for those tax years.
On the other hand, while the government has also
provided the notices of deficiency for tax years
2009, (id. at 5); 2011, (Doc. 69-5 at 1); and 2012,
(Doc. 69-6 at 1), those notices do not state that
they were sent by certified mail or *10 indicate the
date that they were sent. The only indication they
were mailed is a twenty-digit code printed at the
top of each notice that bears a resemblance to the
types of codes used by the United States Postal
Service and a mailing sheet with Millett’s address
and a barcode. (See, e.g., Doc. 69-5 at 12.)
Without more information about what the bar
codes and twenty-digit number mean, this is
insufficient to evidence to prove initial mailing of
the notices.
10

Nor do the Form 4340 records for 2009, 2011, and
2012 fill in the gaps. For the 2009 tax year, the
Form 4340 specifically states “90 day letter
undeliverable” in 2010 and has no entries for
January 2012, which is the date on the Notice of
Deficiency. (See Doc. 68-1 at 41; Doc. 69-4 at 5.)
For the 2011 tax year, the Form 4340 states
“default of 90 day letter” on April 15, 2012, (Doc.
68-1 at 52), even though the Notice of Deficiency
is dated September 29, 2014, (Doc. 69-5 at 1).
Finally, for the 2012 tax year, the Form 4340
states “default of 90 day letter” on April 15, 2013,
(Doc. 68-1 at 59), even though the Notice of
Deficiency is dated July 24, 2017, (Doc. 69-6 at
1). Thus, while a Form 4340 can be an appropriate
source evidencing proper notice, see Meyer, 914
F.3d at 595, in the absence of further explanation,

4

United States v. Millett CV 21-47-M-DWM (D. Mont. Jun. 15, 2023)

the current record is insufficient to establish the
proper mailing of the notices of deficiency for tax
years 2009, 2011, and 2012.
Based on the foregoing, summary judgment is
granted in favor of the government as to the
provision of proper notice under § 6212(a) for tax
years 2004, 2005, 2006, 2007, and 2008; *11
however, a genuine issue of material fact remains
as to the mailing of the notices of deficiency for
tax years 2009, 2011, and 2012. See Augustine,
704 F.2d at 1077.
11

C. Assessments
In an action to collect tax, the government bears
the initial burden of proof. Oliver v. United States,
921 F.2d 916, 919 (9th Cir. 1990). The
government may satisfy this initial burden by
introducing into evidence its assessment of taxes
due. United States v. Stonehill, 702 F.2d 1288,
1293 (9th Cir. 1983). An assessment is made “by
recording the liability of the taxpayer in the office
of the Secretary in accordance with the rules and
regulations prescribed by the Secretary.” 26
U.S.C. § 6203. “The IRS satisfies its obligations
under § 6203 when an assessment officer signs a
summary record of assessment, describing (1) the
taxpayer’s name and address; (2) the character of
the assessed liability; (3) the taxable period (if
any); and (4) the amount of the assessment.” Hefti
v. IRS, 8 F.3d 1169, 1172 (7th Cir. 1993). As
mentioned above, in the absence of contrary
evidence, a Form 4340 is generally recognized as
establishing that notices and assessment were
properly made. See Hansen, 7 F.3d at 138. Here,
Defendants argue that the government cannot rely
on Forms 4340 because the forms do not contain
the requisite “23C” assessment date and the
government did not comply with the notice
requirements of 26 U.S.C. § 6303(a). Because
these arguments are unpersuasive and Defendants
*12 present no other contrary evidence, summary
judgment is granted in favor of the government as
to Millett’s tax liability for tax years 2004-08,
2010, and 2013-17.
12

Defendants first insist that the contents of the
Forms 4340 are insufficient to support the tax
assessments as they do not contain a “23 C”
assessment date. Indeed, the Ninth Circuit has
held that while “IRS Form 4340 provides at least
presumptive evidence that a tax has validly been
assessed under [26 U.S.C.] § 6203,” that form
must contain a “‘23C date,’ indicating the date on
which the actual assessment was made.” Huf v.
United States, 10 F.3d 1440, 1446 (9th Cir. 1993).
However, as argued by the government, the Forms
4340 contain an assessment date in the far-right
column. (See, e.g., Doc. 68-1 at 72 (reflecting
taxes assessed on January 6, 2020 for tax year
2015).) Contrary to Defendants’ position, the
forms need not use the terminology “23 C” and
“the IRS need not submit the underlying
foundational documents absent evidence from the
taxpayer challenging the validity of the
assessments.” Ostheimer v. United States, 2006
WL 2457943, at *3 (D. Mont. May 24, 2006).
“[Defendants]’ suggestions and conjecture are not
sufficient to rebut [the government’s] summary
judgment motion.” Id.’, see also United States v.
Howe, 2022 WL 3227736, at *7 (D. Idaho Aug.
10, 2022) (“[T]he Forms 23C … which are the
bases for the creation of the Forms 4340[] are not
relevant to resolving the dispositive issues in this
case, and *13 their production would be
unnecessarily cumulative and duplicative of
documents already produced.”).
13

Defendants further argue that there is no evidence
that the assessments were sent to Millett, so the
government has not shown compliance with 26
U.S.C. § 6303(a), which provides:

5

United States v. Millett CV 21-47-M-DWM (D. Mont. Jun. 15, 2023)

the Secretary shall, as soon as practicable,
and within 60 days, after the making of an
assessment of a tax pursuant to section
6203, give notice to each person liable for
the unpaid tax, stating the amount and
demanding payment thereof. Such notice
shall be left at the dwelling or usual place
of business of such person, or shall be sent
by mail to such person’s last known
address.
However, as argued by the government, the Forms
4340 themselves show that the IRS sent notices
and demands to payment to Millett. See Hansen,
7 F.3d at 138 (“[Forms 4340 are generally]
sufficient to establish that notices and assessments
were properly made”); Hughes, 953 F.2d at 540.
Because Defendants present no evidence to the
contrary, they fail to raise a genuine dispute of
material fact under § 6303(a). See Hansen, 7 F.3d
at 138 (requiring the nonmoving party to “come
forth with specific facts to show that a genuine
issue of material fact exists”).
3

3 Defendants further argue that no notices
were sent to McLaughlin regarding the tax
liability. This fact is immaterial, as the
government is only pursuing Millett’s tax
liability and his interest in any real
property at issue.
Accordingly, the summary judgment is granted in
favor of the government for the taxes assessed in
14 tax years 2004-2008, 2010, and 2013- 2017. *14
D. Penalties
Finally, Defendants argue that the government has
failed to adequately prove the amount of penalties.
Indeed, under 26 U.S.C. § 7491(c), the
government bears the burden of production with
respect to the liability of an individual for any
penalty. “In order to carry that burden, [the
government] must produce sufficient evidence to
establish that it is appropriate to impose the
additions.” McLaine v. C.I.R., 138 T.C. 228, 245
(2012). “Once [the government] has done so, the

burden of proof is on [the taxpayer] to show the
additions are improper.” Id. Here, as argued by the
government, the Forms 4340 support a finding
that Millett made no payments-beyond his W-2
withholding-in the applicable tax years. Moreover,
Millett admits that he did not do so. (See Doc. 71
at ¶ 3.) And, the Forms 4340 specifically outline
the amounts owed as penalty for failing to file or
pay. Thus, the government has met its burden. See
United States v. Trevitt, 196 F.Supp.3d 1366, 1379
(M.D. Ga. 2016) (finding that IRS officer
declaration and Forms 4340 were sufficient to
meet burden under § 7491(c)). Because
Defendants present no evidence to the contrary,
summary judgment is granted in favor of the
government as to the penalties assessed.
E. Conclusion
Based on the foregoing, summary judgment is
entered against Millett for his outstanding federal
tax liabilities, plus statutory interest and penalties,
for tax years *15 2004-08, 2010, and 2013-17. But
genuine issue of material fact remains as whether
the notices of deficiency for tax years 2009, 2011,
and 2012 were properly mailed to Millett.
15

II. The Property
The government further seeks judgment that these
tax liabilities encumbered Millett’s interest in the
Property and remain attached to that Property
despite its subsequent transfer to McLaughlin.
Specifically, the government argues that
McLaughlin was not a bona fide purchaser of
Millett’s interest in the Property because she did
not pay valuable consideration for his interest.
Defendants’ only response to this argument
appears in their Statement of Disputed Facts,
wherein they state that “Love and affection were
also part of the agreement and is of value, and no
evidence exists it was not given.” (See Doc. 71 at
¶ 14.) The government has the better argument.
A. Attachment of the Lien

6

United States v. Millett CV 21-47-M-DWM (D. Mont. Jun. 15, 2023)

The government first argues that the tax liens
arising from the liabilities discussed above
attached to Millett’s interest in the Property at the
time of purchase. Pursuant to 26 U.S.C. § 6321,
after notice and demand for payment and a
taxpayer’s failure to pay, a lien arises in favor of
the United States in the amount of the assessment.
That lien attaches to “all property and rights to
property” of the taxpayer on the date of
assessment and continues until the liability is
extinguished. *16 26 U.S.C. §§ 6321, 6322. A tax
lien is perfected upon assessment without
additional action. United States v. Vermont, 377
U.S. 351, 352 (1964).
16

As discussed above, with the exception of tax
years 2009, 2011, and 2012, the government
properly assessed federal tax liability against
Millett for the years at issue. Thus, federal tax
liens arose on the following dates: April 4, 2011
(20042008); January 6, 2020 (2013, 2015-2016);
January 13, 2020 (2014); and February 10, 2020
(2017). (See Docs. 68-1, 68-3.) Nevertheless, the
government seeks to attach only the liens that
arose prior to 2012. Thus, the April 4, 2011 liens
for the 2004-08 tax years attached to all of
Millett’s property and interest in property,
including his 50% interest in the Property, which
was acquired on March 20, 2012. (Doc. 66 at ¶
12.) While the 2009 tax lien may also have
properly attached to the Property, that will depend
on whether it was properly noticed in the first
instance as discussed above.
B. Survival of the Lien
Generally, “[t]he transfer of property subject to the
attachment of the lien does not affect the lien.”
United States v. Bess, 357 U.S. 51, 56-57 (1958).

Nevertheless, if a taxpayer transfers the lien-
encumbered property to a “purchaser” • before the

government records the lien, then the lien no
longer attaches to the property and the “purchaser”
takes the property free of the lien. 26 U.S.C.

§ 6323(a), (f). A “purchaser” is a “person who, for
adequate and full consideration *17 in money or
money’s worth, acquires an interest… in property
which is valid under local law against subsequent
purchasers without actual notice.” 26 U.S.C. §
6323(h)(6). Thus, the question here is whether
McLaughlin paid sufficient consideration to
qualify as a “purchaser.” She did not.
17

Contrary to the government’s briefing, the issue of
adequate consideration is a matter of federal, not
state, law. See United States v. McCombs, 30 F.3d
310, 330 (2d Cir. 1994) (holding that while
whether a taxpayer conveyed a property to her
daughters for adequate consideration under New
York law was helpful, it was not dispositive of
whether the daughters were federally-protected
“purchasers” under § 6323(a)); see also United
States v. Sabby, 2014 WL 988459, at *3 (D. Minn.
Mar. 13, 2014) (“The consideration requirement is
determined by federal law.”). The Treasury
Regulations define “adequate and full
consideration” to require “consideration in money
or money’s worth having a reasonable relationship
to the true value of the interest in the property
acquired.” 26 C.F.R. § 301.6323(h)-1(f)(3).
“Money or money’s worth” is then defined as
including “tangible or intangible property, services
and other consideration reducible to a money
value,” but excluding such things as “love and
affection … or any other consideration not
reducible to a money value.” Id. §
301.6323(h)-1(a)(3). *18

4

18
4 Notably, this is consistent with Montana
law. See Baker Nat “I Bank v. Lester, 453
P.2d 774, 780 (Mont. 1969) (“‘[L]ove and
affection’ of the grantor for the grantees
does not constitute valuable consideration
for a conveyance.”).
Here, Millett conveyed his half-interest in the
Property to McLaughlin for “[o]ne dollar and love
and affection.” (Doc. 71 at ¶ 14.) Neither qualifies
as adequate and full consideration under § 6323(h)
(6). The latter is explicitly excluded from

7

United States v. Millett CV 21-47-M-DWM (D. Mont. Jun. 15, 2023)

consideration per the regulations discussed above.
As it relates to McLaughlin’s payment of $1.00,
Defendants purchased the Property for $43,500 in
March 2012. (Id. ¶¶ 12-13.) Thus, the value of
Millett’s interest at that time was at least $20,000.
There is no evidence, or reasonable argument, that
.005% of that amount would be considered the
“true value” of that same interest six months later.
See United States v. Carson, 741 F.Supp. 92, 95
(E.D. Pa. 1990) (rejecting $1.00 payment as
“adequate and full consideration” under § 6323(h)
(6)).
Because McLaughlin did not pay adequate and
full consideration for the Property and was
therefore not a “purchaser” under § 6323(a), the
April 4, 2011 liens remain attached to a one-half
interest in the Property despite the transfer. See
Bess, 357 U.S. at 57.
Conclusion
Based on the forgoing, IT IS ORDERED that the
government’s motion for summary judgment (Doc.
65) is GRANTED as follows:

(1) Millett’s tax liability for 2004-2008, 2010, and
2013-2017 shall be reduced to judgment. At the
close of the case, the government must submit a
*19 proposed judgment form containing the
specific amounts, including interest and penalties,
for these tax years.
19

(2) The April 4, 2011 liens for tax years 2004-
2008 attached to all of Millett’s property and
interest in property, including his 50% interest in
the Property.
(3) Those liens remain attached to a one-half
interest in the Property despite its transfer to
McLaughlin.
IT IS FURTHER ORDERED that the
government’s motion (Doc. 65) is DENIED as to
assessing Millett’s tax liability for tax years 2009,
2011, and 2012 and in finding a lien on the
Property for tax year 2009. These matters shall
proceed to trial.
IT IS FURTHER ORDERED that Defendants’
motion to dismiss and motion for summary
judgment (Doc. 74) is DENIED in its entirety.