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situation had forced him to cease making payments on his tax
liabilities some years earlier. Even the bank and brokerage
accounts he once possessed had been dissipated. At the time of
trial, Mr. Espinosa still owned neither a residence nor a car,
and nothing in the record would indicate any other potential
assets. Respondent was entitled to proceed directly against
petitioner as transferee in determining and assessing
deficiencies and additions to tax. Because the notice sent to
petitioner informs her of the nature and extent of the
deficiencies and additions being claimed against Mr. Espinosa, it
constitutes a proper assertion of transferee liability.
2. Existence of Fraudulent Transfer
Having thus determined that respondent’s efforts to impose
transferee liability are not defeated by absence of prior
procedural steps, we next consider whether respondent has
sustained the burden of establishing that Mr. Espinosa’s transfer
of stock to petitioner qualifies as fraudulent pursuant to
California law. We begin our examination of this question with
the issue of constructive fraud, as a finding thereof will make
unnecessary further probing of Mr. Espinosa’s subjective intent.
Turning to the first of the four elements required to
establish a constructively fraudulent transfer under section
3439.05 of the California Civil Code, we conclude that Mr.
Espinosa owed, and continues to owe, a debt to the IRS. At the
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