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determined a deficiency in tax or additions to tax, or otherwise
assessed tax. Respondent issued the notice of deficiency to Mr.
Riffe's estate, including the addition to tax for fraud on
November 23, 1992. Petitioners contend that the fraud penalty
did not arise before the transfers occurred from March 19, 1991
to October 17, 1992, when the estate closed, because respondent
bears the burden of proving fraud and because respondent had not
yet determined, much less proven, that fraud applies. We
disagree.
Mr. Pert's and Mrs. Riffe's filing of incorrect returns in
which they did not report income is the act upon which respondent
based the underlying determination. The claim arose when they
filed their returns, or at the latest, when the returns for those
years were due. We have held that the Commissioner becomes a
creditor of a taxpayer for transferee liability purposes at the
close of the taxable period in which the tax arose. Hagaman v.
Commissioner, 100 T.C. at 185 (included additions to tax for
fraud); O'Sullivan v. Commissioner, T.C. Memo. 1994-17. Other
courts have held that the Commissioner becomes a creditor of a
taxpayer when the return on which the tax should be reported is
due to be filed. United States v. Ressler, 433 F. Supp. 459, 463
(S.D. Fla. 1977), affd. 576 F.2d 650 (5th Cir. 1978). The tax
years at issue are 1986, 1987, 1988, and 1989. The tax return
for 1989 was due on April 15, 1990. Mr. Riffe's estate
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