- 11 -
830 (1967); Jahncke Serv., Inc. v. Commissioner 20 B.T.A. 837
(1930). In Krueger, we noted that "it would be a strange rule to
confer upon the transferee broader rights than the transferor by
allowing the transferee to relitigate an issue when a transferor
is denied that privilege." Krueger v. Commissioner, supra at
830.3
In First Natl. Bank v. Commissioner, supra, the Court of
Appeals for the Seventh Circuit said:
It is intended by the statute that the
commissioner shall pursue the liability against the
property of the taxpayer whether retained by the latter
or transferred gratuitously by him to others. There is
in this situation privity of title to the assets
transferred and now sought to be reached by virtue of
the statute. * * *
[the transferees] took the property * * * subject to
the statutory liability and, that being fixed, in the
absence of fraud, collusion or lack of jurisdiction,
they are bound by the determination. * * *
First Natl. Bank v. Commissioner, supra at 262.
Petitioner points out that in Phillips v. Commissioner, 178
F.2d 270, 271 (3d Cir. 1949), affg. 8 T.C. 1286 (1947)
supplemented by 11 T.C. 653 (1948), the Court of Appeals for the
Third Circuit held that a final closing agreement (Form 866)
under section 3720 of the Internal Revenue Code of 1939 (the
predecessor to section 7121) between a corporation and the
3 In light of our holding that a transferee or successor
transferee is bound by a transferor's closing agreement under
sec. 7121 as a matter of law, we need not further address
petitioner's contention that petitioner is not in privity with
Timothy Riffe.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011