Hello from Colorado. I'll try to be brief.
I bought a car from someone I had known and trusted. The vehicle is/was worth ~$5K, but the bill of sale had me buying it for $400. I come to find out that the person was getting me roped into their tax evasion scheme by selling me the vehicle so it wouldn't be taken by Uncle Sam, then asking me to sell the vehicle back to them. I refused to do so once I learned of their plan; as I had learned, the person who sold me the car was being investigated by the IRS.
A year later now, an interested buyer has now come along, and I am considering selling the vehicle to him/her and being done with the vehicle. I'm also considering repairing it and using the vehicle for myself, now that I have more income. Whatever I may choose, am I legally safe to sell the vehicle? Am I legally allowed to retain ownership of it (like I have for the past year)? Can someone from the IRS that's investigating the scammer come and take ownership of the vehicle from me depending on what I do? The title and registration have all legally been transferred into my name for over the past year.
Thank you for your help!