How To Get In Trouble Flipping Car Titles

Common Inquiries in Sales Department
People ask us in the sales department here all the time if you ever get in trouble for doing shady stuff with car titles. If you’re trying to avoid taxes, if you’re trying to avoid inspection, or other types of requirements. Certainly, it’s kind of like a game of Russian Roulette; you don’t know if you’re going to get in trouble, but it does happen.

Example of Title Jumping and Tax Evasion Case
Here’s a perfect example. A title jumping tax evasion case has reached its end. Sentencing of a 37-year-old found guilty of violation of the Nebraska certificate of title act and willful evasion of sales tax, both felonies. This defendant argued that nobody was harmed, right? Nobody was a victim, but he still was sentenced to a felony. The prosecutor says he was avoiding paying required taxes and failing to fill out portions of the title. Basically, he did title jumping. He had a title, he didn’t put it into his name; he flipped it to somebody else. Apparently, he was not sentenced to prison but he does have to provide a DNA sample and has a felony conviction. It made its way to court after an investigation showed he attempted to sell a motorcycle after he purchased it and failed to pay sales tax. How much could it have been, right?

Common Practice to Avoid Sales Tax
He said it’s a common practice for those attempting to avoid paying the tax on a vehicle. The approximate amount of sales tax owed on the purchase would have been about $83. So, if we’re trying to save $83, he’s now a convicted felon. He had to go through this court case that probably cost him thousands in legal fees.

Avoiding Tax Evasion Consequences
So anytime you’re thinking, “Well, let me try to do something to avoid taxes. Maybe I want to title it out of state. Maybe I want to switch the VIN number. Maybe I want to do a flip title.” Use whatever actual title process is available to you: bonded title, court order title, prior owner contact, any one of the legitimate methods offered to you. Sure, it may be a little more paperwork, it may be a little harder, you might have to pay some taxes, but if you do that, you’re never going to have to worry about something coming out of the woodwork later and jamming you up on a criminal prosecution. Once you have that, you know you get another one for something else; now you’re going to be looking at jail time.

Importance of Following Legal Procedures
Be aware that you might not think a vehicle title is a big deal, but there are people out there looking at it. There’s a task force. We talk to them all the time. People call us up asking about what we know about the market. Are there ways that can be used? We’re a member of EART, so you want to make sure you’re doing it right. You don’t want to be doing anything shady—no fake mechanic’s liens, no flipping cars to LLCs. You don’t want to mess with any of that junk because all it’s going to do is make you not be able to sleep at night over saving like $83 or avoiding an inspection.

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