- 29 -
Service.9 We find that Mr. Callison's letter and his testimony
to which respondent objects are "Evidence of conduct or state-
ments made in compromise negotiations", Fed. R. Evid. 408, and
are inadmissible under FRE 408.10 See McPike, Inc. v. United
States, 15 Cl. Ct. 94, 98-99 (1988).
We shall now address the transferee liability issues in this
case. Respondent bears the burden of showing that each peti-
tioner is liable as a transferee of property of MSSTA, but not
that MSSTA was liable for MSSTA's unpaid tax liability. See sec.
6902(a); Rule 142(d).
Section 6901 provides in pertinent part:
SEC. 6901(a). Method of Collection.--The amounts
of the following liabilities shall, except as herein-
after in this section provided, be assessed, paid, and
collected in the same manner and subject to the same
provisions and limitations as in the case of the taxes
with respect to which the liabilities were incurred:
9 For example, the record shows that the revenue agent auditing
MSSTA's 1989 return preliminarily proposed that MSSTA realized
$1.6 million from the sale of substantially all of its assets to
AST. By way of further illustration, petitioners stated in their
1991 return that the stock of AST that they acquired had "a cost
basis of $749,760" which was "the value assigned to * * * [those]
shares as determined by the Internal Revenue Service in their
examination of * * * [MSSTA]". Nonetheless, the Service and,
inter alia, MSSTA and the Scotts ultimately agreed in the closing
agreement that MSSTA realized $801,820 from the sale of sub-
stantially all of its assets to AST and that $199,652 of (1) the
value of the AST stock transferred to the Scotts and (2) the
consulting fee paid to Mr. Scott was an amount realized by MSSTA
for MSSTA's assets.
10 Even if we had held differently on the evidentiary matters at
issue, such a holding would not have affected our conclusions
with respect to the transferee liability issues presented.
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