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After an aircraft accident happened: Global Aerospace Inc Insurance company, asked us to sign over the FAA aircraft title to them and told us we "MUST leave the buyer and dollar amount blank. We questioned them if it was legal as they told us they would later sell the plane to a salvage company by filling the salvage companies information in as the Buyer and the salvage amount.

It appears to us Global Aerospace is trying to avoid tax laws both State and Federal by passing the title off as if we sold it to the salvage company. Is this tax fraud under IRS rules?

If this is against IRS rules, how do I protect myself from liability?

We told this insurance company that we preferred to fill out that they were the Buyer and the dollar amount was the amount we received from the insurance company. Their response was we "MUST leave the buyer information BLANK and the dollar amount blank and that this was non negotiable".

Freiheit
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1 Answers1

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I know nothing about selling planes, but I have had people ask me to do this with used cars. It happens when the buyer wants to buy the car from you and then resell it quickly.

From their point of view if they buy the car from you, the paperwork for the transfer has to go through the appropriate bureaucracy and the buyer doesn't get papers proving they are the owner for a while, and so can't sell it quickly. What they want to do is set it up as a single transfer from you to their buyers. Doing this is (in the case of a car) probably breaking the rules, but only in a very minor way.

So this isn't necessarily a scam in the sense that they are trying to cheat you. But they are trying to skirt the law, and there are some significant downsides for you, and there are bad things they can do to you in this scenario.

I've done this with a car worth $1000, but I wouldn't do it with a plane worth presumably much more.

It's also worth saying that if this company is handling your insurance claim this is absolutely NOT 'non-negotiable'. The company is obliged to deal with your claim, and not artificially impose a borderline illegal condition on you. What you might do is say you want to take your request to the authorities who handle transfers of plane ownership and 'check that it is OK with them'. I bet they will back off pretty quickly.

DJClayworth
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