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Having determined that the November 1988 distributions to
its shareholders left ACT with insufficient funds to pay its 1988
corporate Federal income tax liability, respondent has sought to
collect the liability from ACT’s shareholders, including
petitioner.
Discussion
Petitioner’s Transferee Liability
Pursuant to section 6901, the Commissioner may proceed
against a transferee of property to assess and collect Federal
income taxes owed by the transferor. For this purpose, a
transferee includes a shareholder of a dissolved corporation.
See sec. 301.6901-1(b), Proced. & Admin. Regs. Section 6901 does
not impose liability on the transferee but merely gives the
Commissioner a procedure or remedy to enforce the transferor’s
existing liability. See Commissioner v. Stern, 357 U.S. 39, 42
(1958). Respondent bears the burden of proving petitioner’s
liability as a transferee but not of proving ACT’s liability for
the tax. See sec. 6902(a); Rule 142(d).
The existence and extent of transferee liability is
determined by the law of the State in which the transfer
occurred–-in this case, Florida. See Commissioner v. Stern,
supra at 45; Gumm v. Commissioner, 93 T.C. 475, 479-480 (1989),
affd. without published opinion 933 F.2d 1014 (9th Cir. 1991);
Fibel v. Commissioner, 44 T.C. 647, 657 (1965).
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