Still, "Ohio courts have recognized that direct proof of fraud may be impossible." U.S. v. Toler, 666 F. Supp. 2d 872, 891 (S.D. Ohio 2009) (citing United States v. Leggett, 292 F.2d 423, 426 (6th Cir. 1961); Stein v. Brown, 480 N.E.2d 1121 (Ohio 1985)). "As a result, Ohio courts have held that inferences can be drawn from the circumstances surrounding the transaction to prove actual fraud."

In United States v. Toler, the court ruled on motions for summary judgment on the issue of whether the government could foreclose on several parcels of real estate to enforce to federal tax liens. United States v. Toler, 666 F.Supp.2d 872, 882 (S.D.Ohio 2009) (Marbley, J.). The court pointed out that a federal tax lien does not arise to a right in property when the person has no property interest under the laws of the state.

Fisher, 296 Fed.Appx. at 506, 2008 WL 4569946, at *28–29. In Toler the District Court stated: Toler, 666 F.Supp.2d 872, 887. The Toler court also noted that:

A "[n]ominee theory allows a creditor to recover from a debtor where there seems to be a relationship between a debtor and an asset such that there is a concealed understanding between the debtor and the nominal owner that one is holding legal title for the other." United States v. Toler, 666 F.Supp.2d 872, 883 (S.D. Ohio 2009)(Marbley, D.J.). A constructive trust is defined as "a duty or relationship, imposed by courts of equity to prevent the unjust enrichment of the holder of title to, or of an interest in, property which such holder acquired through fraud, breach of duty or some other circumstance making it inequitable for him to retain it against the claim of the beneficiary of the constructive trust."

At the time of the evidentiary hearing, the Government relied heavily on a "nominee" theory, to wit, that Barbara Musgrave held the assets the Government seeks to reach as David Musgrave's nominee, much as drug dealers' mothers and girlfriends hold title to their cars to prevent seizure (Post-Hearing Brief, ECF No. 278, passim). The Report rejected that theory, relying on Judge Marbley's analysis in United States v. Toler, 666 F.Supp.2d 872, 883 (S.D. Ohio 2009). In its Objections, the Government makes no attempt to resurrect the nominee theory, but switches to a claim that David Musgrave is the equitable owner of the assets in his spouse's name.

Here, veil piercing is not at issue, and, any inference from Taylor Steel that veil piercing requires a finding of joint liability is irrelevant to Scherer and the Trust. See also United States v. Toler, 666 F. Supp. 2d 872, 886 (S.D. Ohio 2009) ("Ohio law does recognize alter ego doctrine as distinct from veil piercing."). Because Scherer lacks standing as the beneficiary of the Trust to oppose the motion for default judgment, the Court SUSTAINS the United States' Objection to Part of the Magistrate Judge's Order at Docket Item # 109.

In making this argument, Plaintiff reasons that although Ohio law does not explicitly recognize a nominee theory of ownership, it does recognize equitable ownership, which Plaintiff posits is akin to nominee ownership. The problem with this reasoning and the authority from which it is derived is discussed best in United States v. Toler, 666 F. Supp. 2d 872 (S.D. Ohio 2009). In Toler, another judicial officer within this District summarized the relevant state law and related jurisprudence and concluded that "nominee theory is not recognized under Ohio law."

Thus, the United States has made a prima facie case of tax liability. See United States v. Toler, 666 F. Supp. 2d 872, 881 (S.D. Ohio 2009). 2.

26 U.S.C. §§ 6321, 6322. “The Supreme Court has broadly interpreted section 6321 to include not only the property and rights to property owned by the delinquent taxpayer, but also property held by a third party if it is determined that the third party is holding the property as a nominee or alter ego of the delinquent taxpayer.” Spotts v. United States, 429 F.3d 248, 251 (6th Cir.2005); see also United States v. Toler, 666 F.Supp.2d 872, 889 (S.D.Ohio 2009) (“[T]he United States may recover property held by a third party if it is determined that the third party is holding the property as an alter ego of the delinquent taxpayer.”). The question of whether a taxpayer can maintain a refund suit to recover money she paid toward someone else's tax liability is one that has evolved over time through interplay between Congress and the judiciary.

The definition of a "judicial lien" in 11 U.S.C. §101(53); the judicial lien avoidance provision relied upon by Debtors, 11 U.S.C. §522(f); and the statutory provision stating that exemptions do not protect property from tax liens, 11 U.S.C. §522(c)(2)(B). In re Weaver, 248 B.R. 106 (N.D. Ohio Bankr. 2000); In re DeMarah, 63 F.3d 1248 (9th Cir. 1995); Reed v. Civiello, F.Supp.2d 1008 (N.D. Ohio, 2008); United States v. Toler, 666 F. Supp. 2d 872 (S.D. Ohio 2009); In re Jarrett, 293 B.R. 127 (Bankr. N.D. Ohio 2002); Deppisch v. United States (In re Deppisch), 227 B.R. 806 (Bankr. S.D. Ohio 1998); and Johnson v. Home State Bank, 501 U.S. 78 (1991). On August 9, 2016, Debtors filed three Replies [Docs. ## 61, 62, and 63] to ODT's Motions to reconsider.