§7341 Penalty for Sales to Evade Tax

Summary

If a seller who still owes a federal tax on property sells that property before paying the tax to try to avoid the tax or to defraud the tax laws, any debt from that sale and any security for it are void and cannot be enforced in court, unless they were honestly passed to a buyer who did not know about the tax problem. Any money already paid for the property is treated as forfeited, but a person who sues the seller to recover that payment can get the amount back; the recovered money is split, one-half to the person who sued and one-half to the United States.