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Plainfield, IRS at Odds Over Sale

  • The home of Ed and Elaine Brown in Plainfield sold at auction for more than $200,000 but the IRS says the town is only entitled to a fraction of that money.Valley News —Jennifer Hauck



Friday, February 19, 2016


Plainfield — Town officials are raising concerns that the federal government intends to compensate Plainfield for just a small fraction of the nearly $233,000 in back taxes, penalties and fees owed on the former home of tax protesters Ed and Elaine Brown, which the U.S. Marshals Service seized following an armed standoff in 2007.

The 100-acre compound on Center of Town Road sold for $205,000 in an auction in October, and the tax division of the U.S. Department of Justice is proposing that the federal government keep almost $175,000 for the expenses it accrued in securing, maintaining and selling the property, according to a draft order regarding the distribution obtained by the Valley News.

The proposal would give Plainfield about $1,400 for its advertising efforts in an earlier, unsuccessful sale of the property and a little under $29,300 for the unpaid taxes on the property. Those sums amount to only 13 percent of the back taxes, penalties and interest owed on the property.

By contrast, another draft motion obtained by the newspaper shows the city of Lebanon would receive more than 90 percent of the back taxes and penalties it is owed on Elaine Brown’s former dental office on Glen Road in West Lebanon that federal authorities also seized.

Plainfield Town Administrator Steve Halleran alerted his town’s Selectboard to the roughly $30,000 repayment proposal on Wednesday, and town officials are asking the federal government to itemize the expenses it is claiming in the $170,000 it proposes to keep in the U.S. Treasury.

“Clearly, Plainfield has been taken off-guard by the small amount of money being proposed to go against our taxes due, but until we review the details we don’t know how exactly we will proceed,” Halleran said via email Friday.

In a phone interview, he said the town’s position in collecting unpaid taxes is high on the creditor list, and that Plainfield knew some charges might be made for maintenance. But the amount Washington proposes to keep was unexpected.

“As I understand it, the federal government can take fees related to the property while they had it in their possession — I would think of things like plowing the driveway and cutting the grass. Extracting Ed Brown and sweeping for bombs doesn’t feel like a maintenance item to me,” Halleran said.

Brenda Mikelson, chief deputy of the New Hampshire district of the U.S. Marshals Service, said she saw the amounts proposed to be returned to the municipalities at the same time they did. The amount that Washington planned to keep itself was “a bit more” than she had anticipated, she said.

The U.S. Marshals Service did not ask for compensation for its role in the nine-month standoff and possession of the property, Mikelson said.

The Browns, who are both in their 70s and in separate federal prisons, were convicted in 2009 of conspiracy to prevent government agents from discharging their duties, obstruction of justice, and illegal possession of firearms, among other charges.

The Browns contended that they were not required under law to pay federal taxes.

Any costs associated with removing explosives from the property were incurred by the law enforcement agencies involved, Mikelson said. She did not think that those were included in the IRS’s costs.

During the time that the IRS managed the property, Mikelson said, there were a number of different people involved. Despite the turnover, Mikelson said Andrew De Mello, a tax attorney with the U.S. Department of Justice, should have all of the relevant information regarding the costs incurred.

De Mello referred inquiries to Nicole Navas, a spokeswoman for the Justice Department’s tax division, which is litigating this case.

Navas said by email, “The Justice Department declines to comment,” asserting that there were no publicly filed documents in the case.

Barry Schuster, Plainfield’s attorney, said the town has requested additional information and backup from the Justice Department regarding its calculations.

“The IRS has put a number out, and we have no idea on what it’s based. Until we do, we really don’t know what reaction we should have,” Schuster said.

The reimbursement proposal looks less problematic to city officials in Lebanon.

Lebanon Finance Director Len Jarvi said that under the proposed agreement, the city would lose out on some of the interest and late fees that have accumulated over time.

The city currently is owed almost $356,000 in back taxes on the Glen Road property, according to Tax Collector Susan McBain.

Federal officials are proposing to give Lebanon $333,000 of the $415,000 from the sale of the property to James Hollander. The property is assessed at $1 million, according to the city’s property records.

“We may take less in terms of total interest,” Jarvi said. “(That) doesn’t make me break out into a rash.”

Overall, Jarvi said, the city’s goal is to move the property back onto the tax rolls and to have it occupied and contributing to the economy.

“Nothing good happens to an empty building,” he said. “Everybody wants to get things ... cleared up.”

In an order signed on Dec. 23, U.S. District Court Judge George Singal certified that Hollander, of Plainfield, made the “highest and best” bids on both of the Browns’ properties: $415,000 for the 27 Glen Road property and $205,000 for the Center of Town Road property in Plainfield.

Singal ordered that the IRS convey the deeds to Hollander.

Halleran, the Plainfield town administrator, said the new owner has not done anything with the Browns’ former home, and that town officials have not yet seen a deed passed to him.

No one answered the door Friday afternoon a t the Glen Road building that once housed Elaine Brown’s dentist office and other businesses, and there were no signs of new occupancy.

Efforts to reach Hollander were unsuccessful.

Frustration from Plainfield officials was palpable.

The Browns’ home has comprised more than half the delinquent taxes in town, and full payment on the taxes due would be a significant revenue source for a town with a municipal budget of about $2.2 million.

Halleran said the town has built in the possibility that it wouldn’t get all the money it is due, but thinks it should get at least the $125,000 due in taxes before interest and penalties.

“Seven years the property sits and falls into complete disrepair. During that time the Feds charge off $170,000 in expenses associated with the maintenance of the property. It just seems wrong,” Halleran said in his email to the Selectboard on Wednesday.