This explains a few things and adds color to this situation:
https://www.stb.gov/filings/all.nsf/ba7 ... 245700.pdf
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NYGL is attempting to fight the sale/abandonment. I'm no lawyer so I can't comment on their chances here. My guess here is they finally found a customer and started moving cars despite (or in spite) of the tax situation. I'm assuming the new 'owners' cut the track to stop more rail activity.
Clearly some mistakes were made for the IRS to seize the property. A tax burden of $70,000 shouldn't have lead to this, especially not with some assets laying around worth easily that much in sale or scrap value. No one ever wants to see stuff scrapped, but in Passaic alone there's two passenger cars, two cabooses, the FA, two GPs, two boxcars... not counting the port jervis collection.
If the real estate developers win, what does that mean for the equipment on property? Does a locomotive have the equivalent of a 'title' that would be needed to dispose of it?