Opinion ID: 205504
Heading Depth: 3
Heading Rank: 2

Heading: 1998 to 2002: Events Surrounding Mitchell's Tax Delinquency

Text: Mitchell and his first wife separated in 1998 and eventually divorced in November 1999. The divorce decree required Mitchell to pay his ex-wife monthly alimony and child support, a lump sum payment of $10,000, six percent of his adjusted gross income over $75,000, as well as her attorney's fees. In December 1999, Mitchell married his current wife, Kathleen Mitchell (Kathleen), and began supporting Kathleen, Kathleen's two children from previous marriages, and Kathleen and Mitchell's new baby. From 1999 to 2002, Mitchell and his family lived in a rental house and Mitchell paid rent of $1,200 per month. Then, in 2002, despite owing four years of past due taxes to the IRS, amounting to approximately $164,000, Mitchell and Kathleen bought a house on Pintail Drive (Pintail House) for $200,000 from Mitchell's friend, Tommy Sorrell. The Pintail House was purchased solely in Kathleen's name, and she obtained 100% financing for the purchase from Mr. Sorrell, who knew Kathleen was not working and that Mitchell would be making the mortgage payments. Mitchell paid the monthly mortgage of $1,537 as well as the insurance and utilities. At trial, counsel for the Government asked Mitchell why the Pintail House was purchased solely in Kathleen's name: Mitchell: I had tax problems. I hadn't paid my taxes and I knew I had these problems and I didn't want to jeopardize the house with Tommy Sorrell who was a personal friend. So I said, [w]ould you finance it for my wife? I'm not going to deny that. I mean, that's, kind of, a no-brainer here. I mean, obviously, that's why it was in her name. Counsel: And why would that jeopardize Mr. Sorrell? Mitchell: Because he owned the property free and clear and if I moved into that and bought that house and he financed it with me and if the IRS were to puts liens on it and levies and everything, it could affect the equity in his home. (R.3:680).